Pershing Square Capital Management's William Ackman wants more information about nutritional supplements company Herbalife, which he accuses of being a pyramid scheme. But two of his investors want more information about one of Pershing Square's other major investments.
Two state pension funds plan to meet with Ackman to learn more about Pershing Square's investment in JC Penney, which has cost the hedge fund $500 million on paper, Reuters reports. Penney's stock is down 21% this year; Ackman sits on the retailer's board.
The two pensions did not want to be identified because they had yet to set up their meetings with Ackman.
Despite the loss on Penney, Pershing Square, which manages $12 billion, is up 3.6%, thanks in part to its $1 billion bet against Herbalife. And as with Herbalife, where Ackman is doing battle with longtime nemesis Carl Icahn, other hedge funds appear to be lining up against Pershing Square, with York Capital Management now shorting Penney's debt.
Penney has been struggling since the appointment of Ackman's preferred candidate as CEO, former Apple Inc. executive Ron Johnson. But Johnson's turnaround plan has failed to bear fruit, and he was forced to backtrack on his biggest initiative, an end to sales.