‘We are long-term bullish on America’ but betting against high-yield companies

Billionaire investor Bill Ackman said he’s bullish on the U.S. and markets over the long term, but companies with a high level of debt will have a hard time surviving. 

“We are long-term bullish on America; We are long-term bullish on the markets,” Ackman said on CNBC’s “Squawk Box” on Wednesday. “But I would say I’m cautious on markets over the next period of time. We have today a short position in a high-yield index. We are bearish on highly-levered companies.” 

“The highly-levered businesses will struggle because it will take time for the economy to reopen,” Ackman said. “I don’t think the Fed is going to bail out companies with too much debt.” A highly-leveraged company carries a high level of debt and therefore has a higher likelihood of default or bankruptcy during a crisis.

The founder and CEO of Pershing Square Capital Management revealed he continued to own the same positions in Hilton, Restaurant Brands, Lowe’s and Starbucks. He added his hedge fund is approximately “98{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} long.”

His hedge fund managed $10.7 billion of assets as of June 9. Ackman turned heads on Wall Street this year by pocketing more than $2 billion in bets against markets in March.

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