Boston Massachusetts USA - Billionaire investor William Ackman has built a new stake in railroad operator Canadian Pacific (CP), returning to one of his most profitable investments as rail firms eye a boost from the drive to cut carbon emissions and as manufacturing is brought back to the United States and Mexico from abroad.
 
Ackman's hedge fund Pershing Square Capital Management reported owning 2.8 million CP shares at the end of 31 Dec 2021, according to a regulatory filing on Monday.
 
That would value the stake at roughly $280 million at the stock's closing price on Friday, a fraction of CP's market value of about $92 billion.
 
Pershing Square had asked the Securities and Exchange Commission for permission to delay disclosing its holding on a recent regulatory filing so that it could continue accumulating more stock.
 
Ackman had told investors earlier this year that he had an undisclosed new position in the portfolio.
 
By Monday, Pershing Square owned an additional 12 million shares through forward contracts that it intends to exercise, Ackman said.
 
The investment will make Pershing Square one of CP's top 20 shareholders.
 
With this new stake in CP, Ackman is going back to a company that had been one of Pershing Square's biggest winners, earning the firm some US$2.6 billion on its investment.
 
Pershing Square first began buying into the railroad in September 2011, but was forced to sell in 2016 to pay back investors who were pulling out cash as the fund faced losses.
 
Ackman called those sales one of the firm's "greatest investment regrets."
 
Six years on CP is being run by Keith Creel, who took the top job in 2017 after his mentor Hunter Harrison left CP to run rival railway CSX Corporation.
 
"Keith and the team have done a superb job since," Ackman said, adding, "We are delighted to again be an owner of this remarkable and growing franchise at a time when transcontinental rail infrastructure could not be more important for our economy and our continent."
 
Creel engineered a major win last year when CP acquired Kansas City Southern after a protracted battle.
 
The U.S. Surface Transportation Board still needs to give the deal full regulatory clearance.
 
The merger would set CP up as the first rail company to have a network that extends from Canada to Mexico.
 
Author unknown.