On October 19, 2022, Bill Ekman at the Legion of Honor Award ceremony and Dinner for Olivia Tourne Flato at Park Avenue Armary in New York City. Sylvain Gaboury/Patrick through McMulan Getty Image
Hedge Fund billionaire Bill Ekman had a fruitful 2023 without doing much for his investment portfolio. The founder of Persing Square Capital Management was ranked at number 7 in Bloomberg’s annual list of founders of the highest -grossing hedge funds published on yesterday (20 February), with a $ 610 million gains, or with a return rate of 26.7 percent, his highest position. According to percentage measurements, Ekman performed better than the top two hedge fund manager in the list of Israeli England of Millennium Management and Kane Griffin of Citadel, Bloomberg.
Ekman’s investment portfolio includes only eight stocks. Last year, with the exception of cutting his stake back at Lowe, Ekman barely touched his other equity holdings. In a podcast interview with Lakes Fridman, a broadcast yesterday, the investor revealed his process of researching companies and how he chooses shares to invest.
At the end of 2023, Ekman’s top holding was Chipotl (CMG), in which he began to invest in 2016, when he tumbled after a major food security scam sometime after stock of the restaurant series.
“It is a great company, the great concept … but eventually the company lacks some systems and was a food safety issue,” Ekman said on Fridman Podcast. “But the reality of the quick service industry is a food safety issue over time in almost every fast food company. And the vast majority survived. ,
In 2016, Chipotl fits the criteria of Acman completely for a publicly trading company. The problem is that those companies have a lot of stock prices, ”he said. “So we get involved in cases where a great business has made a big mistake or lost its way, but it can be fine.”
“We buy from shareholders who are disappointed, who have lost confidence, sell it at a lower price relative to selling at a lower price, it is worth it.” “And then we try to be helpful in fixing the company.”
After becoming a shareholder, Ekman replaced Chipotal to its headquarters from Colorado to California and named a new CEO, Brian Nicole, who replaces its founder Steve Els.
Steve Els, Great Entrepreneur. But the business got on a scale, he could not actually run it, ”said Ekman. “And sometimes a way to re -re -recover the culture of a company is to transfer it geographically, and then you can reboot the business.”
How Ekman Researchs on a new company
While researching about a possible investment, Ekman said that it usually begins with publicly available documents, such as the company’s SEC filing and earnings call tape.
“It is very helpful in going back five years and learning the story,” he said. “Here is described how the management describes their business, here they say that they are going to do. And you can see what they do. It is like a historical record how competent and true they are. ,
Then, he will look at the company’s contestants and talk to experts to learn about the industry in which he operates.
And, of course, a prudent investor cannot leave the step of analyzing people behind a business. “Understanding people and driving them, and what the real financial and other encouragement of a business is, are very important part of analysis for investment in a company,” Ekman said. “A part of it is that they are running business for the benefit of business? Are they running business for their own benefit? And this is the analysis you do. ,
He said, “The top person matters a lot, and then it is what they recruit,” he said. “You recruit an A-Plus leader and they are going to recruit other A-Types. You recruit a B-Leader, you are not going to recruit any great talent under them. ,