Pro-Herbalife Hedge Fund Manager Bemoans Fortune

Apr 16 2014 | 2:29pm ET

Hedge fund manager John Hempton wishes he’d never taken that trip to Queens, N.Y.

Hempton, who runs Bronte Capital, was initially skeptical of Herbalife in the wake of Pershing Square Capital Management’s allegation that the nutritional supplements company is a pyramid scheme. Indeed, he called Herbalife “scuzzy.”

But then Herbalife invited him to visit a Queens nutrition club, after which Hempton became a major Herbalife cheerleader and shareholder, and a bitter critic of Pershing Square’s William Ackman.

“The shorts have now been categorically shown to be wrong,” he said in January, after his Herbalife bet helped fuel a 37% gain in his fund. Indeed, he called it his “best stock of the year.”

This year, things have changed. Hempton admitted that Herbalife shares have reacted “very badly” to word of regulatory and criminal investigations, costing Bronte a “few percent.” The fund is down 2.4% this year.

“Things that should work are not working,” Hempton said of his $46 million portfolio.


In Depth

An Interview With Harvest Volatility Management's Rick Selvala

Mar 23 2017 | 5:39pm ET

Several years of extremely low interest rates have pushed some investors into equities...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

SEI: Private Debt Coming Into Its Own

Mar 8 2017 | 9:24pm ET

The explosive growth of private debt over the past few years has caused the lines...

 

From the current issue of