CORRECTED-UPDATE 1-Ackman's Pershing Square posts losses again in May

Thu Jun 2, 2016 2:16pm EDT
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(Corrects paragraph 10 to 2.2 pct of all assets, instead of assets that can be redeemed)

By Svea Herbst-Bayliss

BOSTON, June 1 (Reuters) - Billionaire investor William Ackman's Pershing Square Holdings hedge fund posted losses in May, widening its year-to-date losses to 18.6 percent, an investor in the fund said, in results that reinforce how some of the industry's biggest stars are facing a rough patch.

Pershing Square Holdings had a May loss of 0.7 percent, following a gain of 10.2 percent in April that had helped shrink the loss for the first four months to 18 percent, an investor in the fund said. In the first quarter, Pershing Square Holdings lost 25.6 percent, one of the industry's worst returns.

Other private Pershing Square portfolios, which use less leverage than Pershing Square Holdings, are down roughly 15 percent for the year to date, a person familiar with the funds said.

Ongoing losses have prompted the firm, whose assets under management are down by about 40 percent from a year ago to $12.3 billion, to tell investors that it expects redemptions for the second quarter to be higher than in recent quarters, two people familiar with the matter said.

This year's losses follow a 20.5 percent drop in 2015, which followed a winning 2014 when Pershing Square ranked as one of the hedge fund industry's best performers with a roughly 40 percent gain.

Ackman's chief troubles this year are the same as last: bets that shares of drug company Valeant will climb and shares of nutrition company Herbalife's will fall. Ackman joined Valeant's board this year and helped pick a new chief executive.

Other funds have also struggled this year. Barry Rosenstein, often among the first to report monthly numbers, on Tuesday told investors that his Jana Partners fund is off 4.7 percent this year after gaining 2.4 percent last month. David Einhorn's Greenlight Capital fell 1.9 percent in May but is up 1.1 percent this year, according to data provided to Reuters by sources.   Continued...