Ackman tells investors that this year could be his firm's worst ever

Wed Dec 16, 2015 6:14pm EST
 
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By Svea Herbst-Bayliss

BOSTON (Reuters) - Billionaire hedge fund investor William Ackman, whose funds have suffered double-digit losses this year, on Tuesday told investors that 2015 could be his firm's worst ever, but said clients are generally sticking with him.

"If the year finishes with our portfolio holdings at or around current values, 2015 will be the worst performance year in Pershing Square's history, even worse than 2008 during the financial crisis," Ackman wrote in a 17-page letter that was seen by Reuters.

Investors in funds operated by Pershing Square Capital Management have asked for only a minimal amount of money back recently, Ackman wrote in the letter, saying that the firm, founded in 2004, was not forced to sell out of positions in order to meet redemption requests.

Ackman's comments come less than a week after investors were rattled by turmoil in the credit markets and as many hedge fund managers are nursing heavy losses amid soured bets in the energy markets. Indeed a number, including LionEye Capital and Watershed Asset Management, have decided to sell off their holdings and shut down.

The average hedge fund has lost nearly 4 percent this year, according to Hedge Fund Research data.

Ackman emphasized his firm's low redemption levels.

"Our net redemptions were nominal at $39 million or 0.2 percent of capital for the third quarter, and $13 million or 0.1 percent in the fourth quarter," he said in the letter.

The firm's Pershing Square Holdings fund dropped 21 percent in the year to Dec. 15, marking a sharp contrast with last year's 40 percent gain when Ackman ranked as one of the $3 trillion hedge fund industry's biggest stars.   Continued...

 
William Ackman, founder and CEO of hedge fund Pershing Square Capital Management, speaks during the Sohn Investment Conference in New York May 4, 2015. REUTERS/Brendan McDermid