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The Morning Brief: Ackman’s Pershing Square Dumps Canadian Pacific Stake

William Ackman’s New York-based Pershing Square Capital Management sold off its entire stake in Canadian Pacific, a railway operator and one of the firm’s largest long positions, on Wednesday, the New York Times reported. The firm sold 9.8 million shares, valued at about $1.5 billion.

The move comes during a tough year for the firm, whose Pershing Square Holdings — a publicly traded vehicle that tracks Pershing Square’s main fund — is down 19 percent through the end of July. Last year Ackman’s flagship fund lost more than 20 percent. The firm has been hurt by a big investment in troubled drug giant Valeant Pharmaceuticals International and its high-profile short bet against Herbalife, a multilevel marketer of nutrition supplements and shakes.

Canadian Pacific had been a big win for Ackman; he established a sizable stake back in 2011, when the shares were trading near $50, according to the report. Pershing Square eventually won a proxy contest, installing a new board and CEO. The shares closed on Wednesday at $147.28.

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CDK Global, a software maker for the auto industry and a target of Paul Singer’s activist-oriented Elliott Management, agreed to add two directors chosen by Elliott to its board. As part of the deal, Elliott agreed not to launch a proxy fight for the next 11 months, In May Elliott, which first revealed its stake in CDK in May 2015, sent a 13-page letter to the company’s board calling for the company to cut costs, restructure various organizations and take other measures to pump up the value of its stock. Last month Elliott wrote a letter to CDK praising the company for making several positive moves but urging it to make additional changes soon. CDK was spun off from Automatic Data Processing in 2004. Elliott owns a 9.3 percent stake in the company.

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Asset manager Franklin Templeton launched a liquid alternative global macro fund sub-advised by hedge fund managers selected by K2 Advisors, its fund-of-funds division. The Franklin K2 Global Macro Opportunities Fund will allocate to managers including London-based systematic manager Aspect Capital, London-based emerging markets investor Emso Asset Management, and Rowayton, Connecticut-based systematic manager Graham Capital Management.

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