CNBC
- Billionaire investor Bill Ackman netted $200 million by betting against 30-year Treasurys, sources told the Financial Times.
- The profit helped Pershing Square's flagship fund gain 11.6% through the year to mid-October.
- Ackman announced on Monday that he closed his short positions, citing growing risks.
Billionaire investor Bill Ackman's bet against 30-year Treasury bonds netted him a $200 million profit, sources told the Financial Times.
The founder of Pershing Square Capital Management initially made the short bets using options, which garnered $300 million. But to maintain his position, Ackman paid out close to $100 million in premiums.
A well-timed market play helped drive the gains. Bond yields were climbing by the time Ackman announced the short bet in August, citing expectations of higher interest rates due to stubborn inflation and the likelihood of more Treasury supply. Then, a massive outflow of buyers sent Treasurys into turmoil soon after.
Profits from the position helped Pershing Square's $13 billion flagship gain 11.6% this year through mid-October, data cited by FT shows.
Pershing Square did not immediately respond to Insider's request for comment.
On Monday, Ackman announced an end to his short positions on Treasurys, saying on social media that "There is too much risk in the world to remain short bonds at current long-term rates. The economy is slowing faster than recent data suggests."
Soon after his post, Treasury yields retreated after the rate on 30-year bonds broke through the 5% barrier, hitting the highest level since 2007.
According to FT, Ackman has made even larger sums from bond market shorts before, netting $2.3 billion last year in a bet against two-year notes the began in December 2021.