BOSTON (Reuters) - Billionaire investor William Ackman, one of last year’s best performing hedge fund managers, saw his Pershing Square Holdings portfolio drop 9.2 percent in August as some of its major holdings joined a broad market slump, a source familiar with the fund said on Wednesday.
The drop in August leaves the fund down 0.1 percent for the year, erasing the 10 percent gain it had boasted at the end of July, according to the source. Ackman had warned investors in a letter last week that tumbling markets had wiped out the year’s gains.
The shift of fortunes shows how much market volatility, sparked by sharp declines in Chinese stock prices, has
hurt the world’s most prominent investors.
In the first six months of the year the fund’s biggest winners included pharmaceuticals companies Allergan (AGN.N) and Valeant (VRX.TO), as well as food companies Nomad Foods NHL.L and Mondelez(MDLZ.O). All took a hit in August.
Meanwhile Herbalife Ltd (HLF.N), against which he has made a $1 billion short bet, cost the fund 3.7 percent in returns during the first six months of the year, but likely helped in August as its stock also weakened.
Last year Pershing Square gained 40.4 percent in value while the Standard & Poor’s 500 index rose 13.7 percent. Due to recent strong returns, the fund’s size had swelled to roughly $20 billion, but that is set to shrink in light of the latest drop.
Reporting by Richard Valdmanis; Editing by Chris Reese and Andrew Hay