Ackman leaves Nike stake with $204m profit

INVESTOR William Ackman has stepped out of his Nike (NKE.N) sneakers, at least in a financial sense.

The billionaire investor’s hedge fund Pershing Square Capital Management earned roughly $US100 million ($F204m) in profit when it cashed out of its 0.71 per cent stake in the sportswear company recently, a person familiar with the move said on Thursday.

Two months ago, the activist investor told clients that Pershing Square had taken a rare passive stake in Nike at the end of 2017, when the stock was trading at around $53 a share and that the bet had already earned them a roughly 30 per cent gain.

Mr Ackman, a passionate tennis player, is often photographed on courts wearing Nike apparel ranging from shoes to shirts to wristbands.

The Wall Street Journal first reported the hedge fund’s departure from the Dow component.

The quick gains on Nike will be welcome news for Mr Ackman’s investors who have watched him post losses for three consecutive years when long-held investments on Valeant and against Herbalife weighed on returns.

He left Valeant last year and got out of Herbalife earlier this year.

In January, Mr Ackman told his investors that he was making changes to return the prominent firm to its glory days by shrinking his team, becoming more involved in the investment process again and leaving the marketing to someone else.

The firm generated compound returns of 21 per cent a year net of fees over 11 years from its launch to the end of 2014.