UPDATE 1-Ackman off Canadian Pacific board, ends four-year tenure

Tue Sep 6, 2016 5:40pm EDT
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(Adds details on move, Ackman's profit)

By Svea Herbst-Bayliss

Sept 6 (Reuters) - Activist investor William Ackman left the board of Canadian Pacific on Tuesday, marking the end of a four-year tenure that helped overhaul the ailing railroad company and earn his hedge fund roughly $2.6 billion.

Canadian Pacific announced Ackman's resignation almost exactly one month after his Pershing Square Capital Management sold its remaining 9.8 million CP shares, freeing up roughly $1.5 billion in cash to make other investments.

Ackman initially planned to stay on the CP board until next year, but stepped off now as the company was making other changes to the board by adding Jill Denham and William Fatt.

"I am confident that with CP's superb management and strong governance, it will extend its remarkable track record into the future," Ackman said in a statement announcing his departure.

Late last year, Ackman played a key role Canadian Pacific's efforts to buy rival railroad Norfolk Southern, an effort that eventually collapsed.

The resignation marks the end of one of Ackman's most profitable and successful investments. But it also comes at a time the prominent activist investor is facing double-digit losses in his highly concentrated investment portfolio.

By leaving the CP board, Ackman will gain time to devote to work as a board member at Valeant Pharmaceuticals and Howard Hughes, a developer and operator of master planned communities.

Pershing Square mounted one of the hedge fund industry's most bitter and closely watched proxy battles at Canadian Pacific and won seven seats on the company's 16-member board in 2012. Earlier this year, former Pershing Square partner Paul Hilal, who had been a key architect of the investment, resigned from CP's board when he left Ackman's hedge fund. (Reporting by Svea Herbst-Bayliss and Vishaka George in Bengaluru; Editing by Don Sebastian and Dan Grebler)