market folly

Bill Ackman's hedge fund firm Pershing Square Capital Management recently filed an amended 13F for the fourth quarter of 2009. We found this a bit peculiar given that the new 13F's that will detail first quarter 2010 portfolio adjustments are due out next month. Nonetheless, upon examining their amended filing, we see that Ackman has disclosed a 13.8 million share stake in Yum Brands (YUM) as of 12/31/09.

It's a bit baffling to us as to how Pershing could omit such a material position from their 13F. After all, when you add this amendment to their original 13F, you see that YUM was their second largest position! When we originally t0ok a look at Pershing Square's portfolio, they did not show a position in Yum Brands. Obviously now looking back, that was not the case.

So, to sum up: Pershing Square owned a $483 million stake in Yum Brands as of the fourth quarter 2009 which means it was a new position for them at that time as they did not own shares in the prior quarter. However, Pershing had owned shares of YUM in the past, but not since the first quarter of 2009. Bill Ackman's hedge fund was up 3.7% for the month of March and up 5.62% for the year as noted in our first quarter hedge fund performance update. Our prior coverage of Ackman's firm includes examining Pershing's economic exposure to General Growth Properties (GGP) and their presentation on Kraft (KFT).

Taken from Google Finance, Yum Brands is "is a quick service restaurant (QSR) with over approximately 37,000 units in more than 110 countries and territories. Through the five concepts of KFC, Pizza Hut, Taco Bell, LJS and A&W (the Concepts), the Company develops, operates, franchises and licenses a worldwide system of restaurants, which prepare, package and sell a menu of food items. In addition, the Company owns non-controlling interests in entities in China who operate similar to franchisees of KFC and a non-controlling interest in Little Sheep, a Hot Pot concept."

For more background on Bill Ackman's hedge fund, check out our profile of Pershing Square.