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

Fundraising for Mid-Sized PE Funds: Should You Use a Registered B/D?

Dec 6 2016 | 7:18pm ET

When does a fund sponsor need to use a registered broker/dealer when raising capital...

Lifestyle

Trump Attends 'Villains and Heroes' Costume Party Dressed As...Himself

Dec 5 2016 | 11:16pm ET

U.S. President-elect Donald Trump attended a "Villains and Heroes" costume party...

Guest Contributor

Nowhere to Hide: Why the Future of Asset Management Depends on Innovation

Nov 15 2016 | 6:55pm ET

Information technology has reshaped the asset management industry’s periphery,...

 

From the current issue of

Since the inception of Modern Trader, a core editorial theme has centered on the wisdom and power of crowds. Editorial emphasis has focused on companies and projects engaged in the collection and analysis of information. 

AVAILABLE NOW at BARNES & NOBLE

NEWSTAND LOCATOR