UPDATE 2-Ackman's Pershing Square lost 2.2 pct in July -sources

Mon Aug 5, 2013 2:02pm EDT
 
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By Svea Herbst-Bayliss and Katya Wachtel

NEW YORK Aug 5 (Reuters) - It was a tough July for hedge fund manager William Ackman, whose $11.16 billion Pershing Square Capital Management lost 2.2 percent during the month, according to three investors.

The fund got hit hard by its short position in nutritional supplements company Herbalife Ltd, which saw its share price rise more than 40 percent last month. Ackman's fund has invested $1 billion on a bearish bet that Herbalife will be unmasked by regulators as a pyramid scheme.

A long position in retailer J.C. Penney Co Inc also hurt the fund as the stock slid about 17 percent in July.

Pershing Square remains up 3.8 percent year to date, according to the investors. The sources did not want to be named because they were not authorized to speak publicly about the private fund's returns.

A representative of the hedge fund declined to comment.

Hedge fund returns rose about 1 percent last month according to early estimates by Bank of America Merrill Lynch, while the S&P 500 stock index climbed 4.95 percent. For the year, funds have risen roughly 3.6 percent on average, according to that Bank of America data, while the S&P 500 was up 18.2 percent through July.

Pershing Square had gained 2.2 percent in the first two weeks of July, sending yearly gains to about 8 percent through July 15, Reuters previously reported. Despite the disappointing bets on Herbalife and J.C Penney, some of Ackman's other big holdings, such Procter & Gamble and Canadian Pacific, have performed well this year.   Continued...