Bill Ackman's Pershing Square Capital Management is betting big on just a handful of stocks, with Brookfield, Amazon, and Uber making up over half of its $13.7 billion portfolio as of March 2024
Bill Ackman's Pershing Square Capital Management stands out among large hedge funds for its unusually concentrated approach. As of March 31, the fund reported only 11 U.S. stock positions, collectively valued at $13.7 billion, according to its latest 13-F filing. The top five holdings alone accounted for roughly 78% of the portfolio's value, a level of focus that is rare among funds of this size. This strategy means that each major position reflects a strong conviction about where Ackman sees long-term value, and the fund's largest bets offer a window into his outlook for the years ahead.
For investors and market watchers, Pershing Square's portfolio provides a case study in high-conviction investing, but also highlights the risks that come with putting so much capital into so few names. The fund's three largest holdings-Brookfield, Amazon, and Uber-together represent just over half of its total assets, underscoring Ackman's willingness to make sizable, targeted bets rather than spreading risk across dozens of companies.
Brookfield: Infrastructure and Asset Management
Brookfield (BN) is Pershing Square's largest holding, with the fund owning about 59.7 million shares valued at approximately $2.4 billion, or 17.6% of the portfolio at the end of the first quarter. Brookfield is a Canadian-based global investment firm with operations spanning infrastructure, renewable energy, real estate, insurance, and a significant asset management business. The company's distributable earnings before realizations-a measure of recurring cash flow-rose 7% per share year-over-year in the first quarter, reaching $5.5 billion over the trailing 12 months. Brookfield has also been active in returning capital to shareholders, repurchasing $470 million of its own shares in early 2024. For Pershing Square, Brookfield's diversified business model and steady cash generation appear to be key attractions.
Amazon: Growth in Cloud and Retail
Amazon (AMZN) is the fund's second-largest position, with 11.5 million shares worth about $2.4 billion, or 17.4% of the portfolio. Amazon's first-quarter results showed net sales up 17% year-over-year to $181.5 billion, while operating income climbed 30% to $23.9 billion. The company's cloud division, Amazon Web Services (AWS), posted 28% revenue growth-the fastest in nearly four years-driven by rising demand for artificial intelligence computing. For Pershing Square, Amazon's combination of dominant e-commerce operations and accelerating cloud growth offers both scale and profitability, even as the company faces ongoing competition and regulatory scrutiny.
Uber: Betting on Mobility and Technology
Uber Technologies (UBER) rounds out Pershing Square's top three, with a stake of about 30 million shares valued at $2.2 billion, or 15.7% of the portfolio. In the first quarter, Uber reported gross bookings up 25% year-over-year to $53.7 billion, revenue up 14% to $13.2 billion, and $2.3 billion in free cash flow. The company is also investing in autonomous vehicle partnerships, including a planned luxury robotaxi service with Lucid and Nuro. Despite these developments, Uber's stock was down about 11% year-to-date as of late spring 2024, trading at roughly 18 times earnings-a valuation some investors may see as modest given the company's growth rate. The market's muted response highlights the risks of concentrated bets, even in companies with strong operating momentum.
According to company filings, Pershing Square's concentrated approach means that a single misstep in one of its largest holdings could have an outsized impact on overall returns. While each of these companies is a leader in its sector and generates significant cash flow, the portfolio's structure amplifies both potential gains and losses. For most individual investors, such concentration may not be appropriate, especially without the resources and risk tolerance of a professional fund manager. It's also important to note that 13-F filings are backward-looking; Ackman's positions may have changed since March 31.
Concentration Risk and Investor Takeaways
Pershing Square's strategy of holding a small number of large positions is not typical among major hedge funds, which often diversify across dozens or even hundreds of stocks to manage risk. Concentrated portfolios can outperform when the underlying companies deliver, but they also expose investors to greater downside if one or more bets go wrong. For most retail investors, diversification remains a key tool for managing volatility and reducing the impact of individual stock declines.
As of March 2024, the S&P 500 had gained about 10% year-to-date, while Amazon shares rose more than 15% over the same period. In contrast, Uber's stock lagged, falling 11% despite strong operating results. Brookfield's shares were relatively stable, reflecting the company's diversified business model and steady cash flow. These performance differences illustrate how even well-known, cash-generating companies can experience divergent stock returns over short periods.
Concentrated investing relies on deep research, conviction, and the ability to withstand volatility. While professional managers like Ackman may have the resources and temperament to manage these risks, most individual investors are better served by using concentrated portfolios as a source of ideas rather than as a blueprint. Understanding the trade-offs between concentration and diversification is essential for building a portfolio that matches one's goals, risk tolerance, and investment horizon. Investors should also be aware that regulatory filings such as 13-Fs provide only a snapshot in time and may not reflect current holdings or future moves.
