Why Bill Ackman Is No Longer A Berkshire Shareholder

Billionaire hedge fund manager Bill Ackman told investors on Wednesday his Pershing Square fund no longer holds any shares of Warren Buffett's Berkshire Hathaway Inc. (NYSE: BRK-A) (NYSE: BRK-B).

Ackman's Rationale 

Ackman made the decision to sell Pershing's roughly $1-billion stake in Berkshire after holding the stock for around one year, according to Forbes.

Ackman noted on a conference call the decision to do so is based on a belief that his fund can generate superior returns elsewhere.

The investment firm continues to believe Berkshire represents a "strong investment over the longer term" Pershing partner Ryan Israel also said in the conference call. But the desire to target "high-returning investments" in the current environment is a top priority, he said. 

Ackamn also highlighted Berkshire's $130 billion in cash, which he said is a "very large number relative to the liquidity available" in buying one stock at a time.

Pershing's Cash Allocation Strategy

Buffett deserves credit for building a "high-quality" portfolio that also expanded operating margins, especially at Burlington Northern, Berkshire's largest industrial asset, Israel also said on the conference call.

The insurance business float also grew 5% last year to $130 billion which is "really incredible at the scale that Berkshire is dealing with," he said. 

At the end of the day, Pershing feels it is better than Buffett and Charlie Munger at allocating cash toward investments that are consistent with its own objectives.

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