BOSTON, Sept 22 (Reuters) – Hedge fund manager William Ackman’s 10% bet on Universal Music Group helped nearly double returns at his own portfolio to 15.3% this week after shares in the world’s biggest music label surged in their first hours as a publicly traded company.

Ackman, who runs hedge fund firm Pershing Square Capital Management, told investors that his Pershing Square Holdings portfolio returned 15.3% after fees since January. The fund was up 7.7% a week ago.

The gains were largely fueled by his investment in Universal Music Group (UMG), the label that is home to Taylor Swift, Bob Dylan and the Beatles. Ackman pivoted a few weeks ago, buying the sizable stake in the record label through his portfolios after his initial plan to invest through a blank-check company deal crumbled in July amid scrutiny from U.S. regulators.

The billionaire investor told his investors that humans need food, water and music, and that music, which he called the cheapest form of entertainment in the world, is a very savvy investment because it pays royalties.

He raised $1.1 billion in fresh capital for the UMG stake through a co-investment vehicle, a structure he has previously used for investments in Automatic Data Processing (ADP.O) and Air Products & Chemicals (APD.N). In total, Ackman’s funds invested $4 billion in UMG.

Ackman posted a 70.2% return in 2020 following a 58.1% return in 2019. This year the HFRX Global Hedge Fund Index, which measures returns for the industry, is up 3.58%.

In the first eight months of the year Ackman’s best performing stocks included Chipotle Mexican Grill (CMG.N), Agilent Technologies (A.N), and Domino’s Pizza (DPZ.N). He sold Agilent to help fund his commitment to UMG.

In its first day of trading in Amsterdam on Tuesday, UMG’s shares leapt by more than a third, pushing its market value to $55 billion in Europe’s largest listing of the year.

Reporting by Svea Herbst-Bayliss, Editing by Franklin Paul and Sonya Hepinstall

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