, Columnist
Bill Ackman Is Right to Hedge on Corporate Credit
As the recovery becomes increasingly priced in, why not take insurance out on potential bumps in the road?
A decent wager.
Photographer: Patrick T. Fallon/BloombergThis article is for subscribers only.
Billionaire investor Bill Ackman, founder of hedge fund Pershing Square Holdings Ltd., is reloading on his bearish bet on corporate credit, according to the Financial Times. That makes sense.
Credit spreads — the premium charged for riskier company bonds above government debt — have largely returned to pre-Covid levels, even before a working vaccine has passed approval. In some cases they’re at record lows amid the euphoria on the Pfizer vaccine. As the recovery becomes increasingly priced in, why not hedge for potential bumps in the road?