UPDATE 1-Hedge fund mogul Ackman hit hard by huge Valeant bet

Wed Oct 21, 2015 2:55pm EDT
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(Adds details throughout on the bet)

By Svea Herbst-Bayliss

BOSTON Oct 21 (Reuters) - Hedge fund mogul William Ackman has become one of the biggest casualties of a meltdown in pharmaceutical firm Valeant , with losses on the position amounting to roughly $1.8 billion so far this year, including more than $800 million at one point on Wednesday.

Valeant shares plunged as much as 40 percent after an influential short-seller accused the company of fraud, saying it used its relationship with specialty pharmacies to inflate revenue.

With the stock's dramatic swings, Ackman's portfolio lost as much as $820 million during the day but the loss lessened to roughly $650 million as the price inched up again in mid-afternoon. Cable television station CNBC reported that Ackman bought an additional 2 million shares of Valeant on Wednesday.

The hit is likely to cement Ackman's Pershing Square Capital Management's place as squarely in the red this year, a twist of fate for a fund that in 2014 yielded 40 percent returns and bested a field of high-profile rivals.

"It takes a lot to turn (Ackman's) stomach, but today might be the day," said an investor in the fund, who asked not to be named.

Pershing Square was down nearly 13 percent for the year by the end of September, according to investors, after market turmoil caused by concerns over China's economy, slumping commodities prices and a potential Fed interest rate hike struck several of its holdings.

A spokesman for Ackman declined to comment.   Continued...