Bill Ackman's Pershing Square Q2 Letter: No Gold Hedge for Us

Courtesy of Dealbreaker, here's the latest from Bill Ackman's hedge fund, Pershing Square Capital Management. His second quarter correspondence is a bit tardy and he acknowledges that in the letter. Referring to their positions, Ackman discusses Pershing Square's stakes in Target (TGT), EMC (EMC), General Growth Properties (GGWPQ.PK), Automatic Data Processing (ADP), and his return to shares of McDonald's (MCD). He also touches on their short exposure through credit default swaps (CDS) as well as mistakes and missed opportunities regarding their due diligence.

In his correspondence, we learn that Pershing's largest short position is a valuation hedge for their investment in General Growth Properties (GGWPQ.PK) because their valuation is a large component of the equation that determines recoveries for the equity holders. Additionally, he mentions they are also short a REIT that trades at a high valuation, has weak underlying assets, and poor business prospects. Since he does not name names, you can obviously speculate as to what this short position is in.