UPDATE 2-Ackman's fund off 17.3 pct for year, erases banner gains from 2014

Wed Feb 24, 2016 9:24pm EST
 
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(Updates firm's assests under management )

By Svea Herbst-Bayliss

BOSTON Feb 24 (Reuters) - Billionaire investor William Ackman has managed to erase his entire 40 percent return of 2014, a performance that put him at the pinnacle of the hedge fund world.

Ackman's Pershing Square Holdings portfolio has lost 17.3 percent so far in 2016, the fund told investors on Wednesday. Added to last year, when it lost 20.5 percent in a relatively flat year for markets, the fund's declines are now greater than its 2014 gain.

Valeant Pharmaceuticals, which was Ackman's main loser in 2015, was also to blame for this year's drop. Valeant's stock declined 16 percent from Feb. 17 through Tuesday amid questions over its earnings, providing the final bit of fuel for Ackman's fund to burn through its gains.

Valeant, which has been part of Ackman's portfolio for only a year, on Tuesday said it would restate earnings after having prematurely accounted for some revenue, news which drove the stock to pare recent losses.

Pershing Square Capital Management, which now oversees $12 billion, did not detail exactly what caused its most recent losses and a spokesman declined to comment.

For investors who got in before the 2014 gains, Ackman's record remains strong with his flagship Pershing Square International fund still earning an average 12 percent a year over the last decade.

"Long term, Bill Ackman has still made a lot of people a lot of money and they will likely stick with him, having known that a ride with him can be pretty up and down," said one long-term investor.   Continued...