Tuesday, 21 October 2014
Last updated 3 hours ago
Aug 23 2013 | 5:59am ET
Pershing Square Capital Management’s William Ackman is willing to admit he’s made mistakes—but his $1 billion short against Herbalife isn’t one of them.
Ackman wrote to clients on Tuesday, following a tumultuous few weeks that saw his name in the headlines about both his investment in the nutritional supplements company and in retailer J.C. Penney Co. The latter, Ackman said, was among his “mistakes,” and has proven a “failure.”
Ackman resigned from Penney’s board last week amidst a dispute between himself and his fellow directors over his public call for the ousters of the company’s chairman and interim CEO. The hedge fund manager indicated he might seek to sell his nearly 18% stake in the company, which is nursing a 40% loss.
“Clearly, retail has not been our strong suit, and this is duly noted,” Ackman wrote.
There was no such admission on Herbalife, which Ackman has called a pyramid scheme. Shares of the company have soared in recent months, saddling Pershing Square with a roughly $300 million paper loss.
But the jury is still out on the investment, Ackman insisted.
“Over the past eight months, we have made material progress in attracting federal, state and international regulatory interest in Herbalife,” he wrote. “We are not at liberty to disclose the nature of these developments, but we believe that the probability of timely aggressive regulatory intervention has increased materially.” Ackman added that he has been in touch with a former Herbalife employee he deemed a “whistle-blower.”
And he made no apologies for the raft of sometimes-unfavorable coverage he’s received, calling it “a natural outcome of our high-profile strategy.”
“Activist investing requires a thick and calloused skin, and recent press coverage reinforces this point.”
Sep 22 2014 | 4:15pm ET
"I tell people that everybody likes good news and so if you have good performance that’s wonderful,” explains Mike McKitish of Peddie School's endowment, “but it’s the people that want to talk about the bad news or where they drifted and how they came back and how they stayed to their discipline…” that he wants to hear from. Read more…
Sep 30 2014 | 9:29am ET
The crisp Autumnal days of October are upon us, and so are a few of the hedge fund industry’s favorite charitable events. If you have never been to Rocktoberfest, well, you are missing out. And for a quieter evening of sipping and socializing, stop by HFC’s Wine Soiree. Read more…
Most traders agree that proper risk management is the key to successful trading. However, many traders depend on the deeply flawed measure of standard deviation as a benchmark of risk. Here we put it ...