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

FINtech Focus: Fundbase Aims To Revolutionize Access To Hedge Funds

Jan 23 2015 | 11:03am ET

Global investment in financial technology—also known as fintech—is booming....

Lifestyle

Ex-Hedge Fund Billionaire Won’t Run For Senate

Jan 23 2015 | 5:48am ET

Ex-hedge fund manager Tom Steyer will not run for Senate after Sen. Barbara Boxer...

Guest Contributor

From Switzerland With Love: Some Hard Truths About Central Banks And Risk

Jan 23 2015 | 7:54am ET

In the wake of the Swiss National Bank uncoupling the country’s currency from...

 

Editor's Note