BOSTON - William Ackman’s Pershing Square Capital Management has sold its positions in Automatic Data Processing Inc (ADP.O) and United Technologies Corp (UTX.N) and built a new position in a company whose name has not been disclosed, a source familiar with the matter said on Monday.
Ackman announced the exit from ADP in a letter sent to clients and seen by Reuters on Monday and had earlier told analysts about the decision to sell out of United Technologies, the source said. A spokesman for Pershing Square declined to comment on either sale or disclose the name of the company in which the firm is building a position.
The announcements about ADP and United Tech are the most significant moves Ackman has unveiled this year and come at a time his firm is making waves with double-digit returns as Ackman himself stays largely out of the limelight.
At ADP Ackman said that investors earned a 51% return while his firm pocketed a $1.2 billion gain on an investment that started with a noisy fight two years ago when he tried to win board seats for himself and two associates.
Although he lost the fight, Ackman said his battle helped educate other investors and prompted management to make critical changes. He is leaving now, he wrote, because he expects future returns to be more modest now that the market is “more accurately pricing in ADP’s prospects for success.”
“If ADP meets its 2021 earnings targets, we estimate the stock will generate a low double-digit return from our exit price” of roughly $167 a share, Ackman wrote.