to face investor grilling after record quarterly loss
Send a link to a friend
[April 06, 2016]
By Svea Herbst-Bayliss
BOSTON (Reuters) - Billionaire investor
William Ackman is set to face close questioning on Wednesday when he
details his hedge fund's biggest-ever quarterly loss and explains how he
plans to handle the investment that led to the fall - Valeant
Ackman's Pershing Square Capital Management has blocked off one hour
on Wednesday morning for him and his analysts to walk investors
through exactly how one of its funds lost 25 percent in the first
three months of 2016, including bets on Platform Specialty Products,
Herbalife and Valeant.
The losses are a severe blow for one of the hedge fund industry's
most closely followed investors and come on top of a record 20.5
percent drop in 2015.
He has already told investors that he plans to take a far more
active role in Valeant and last month joined the company's board,
cementing his commitment to the company for some time. The board is
looking for a new chief executive and is committed to filing a
long-delayed annual report by the end of April.
Ackman is sure to be pressed for details on all those issues in the
call, which is a regular quarterly update with investors.
A spokesman for Ackman declined to comment.
Five months ago Ackman held a call that lasted nearly four hours as
he tried convince investors that Valeant was still a good buy. That
message seemed to fall on deaf ears as the stock price has tumbled
nearly 70 percent since then.
Ackman lost roughly $1 billion on his Valeant investment in one day
last month when its stock fell 50 percent on fears it could default.
That prompted even long-time Valeant supporters such as Brave
Warrior Advisors' Glenn Greenberg to liquidate half of his stake.
[to top of second column]
Overall, Ackman's investors appear to be sticking with him.
Redemption requests for the first quarter totaled roughly 2 percent
of the firm's roughly $12 billion in assets.
"This is going to be a badly scraped knee that may even require
stitches but it is not life threatening," one Ackman investor said
about the losses and Valeant situation.
The structure of Pershing Square shields it from a sudden sharp loss
of capital - investors can only withdraw their money gradually and
some of them can only exit by selling shares to another investor.
In a rare piece of good news, Valeant said on Tuesday that it has
finished an internal review and found no additional problems that
would require further restatements of its financial statements. Its
shares climbed 10 percent.
(Reporting by Svea Herbst-Bayliss; Editing by Carmel Crimmins)
[© 2016 Thomson Reuters. All rights
Copyright 2016 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.