Goodbye Bill: After Years Of Losses “Most Investors” In Pershing Square Are Running For The Exits

Thursday, April 5, 2018
By Paul Martin

by Tyler Durden
Thu, 04/05/2018

Having raked up embarrassing and nearly total losses in Valeant, JC Penney, Herbalife (actually the loss on this short squeeze is more than total to Carl Icahn’s delight)… the list goes on, we’ve previously pointed out that it’s amazing hedge fund manager Bill Ackman, once a darling of the financial media, still had outside money to manage.

That might not be the case for much longer: according to the Wall Street Journal, “most investors” in Pershing Square are flooding the company with redemption requests, and asking for their money back at a “rapid pace” forcing Ackman to plan on a future that might not include managing a private fund.

It’s hardly a surprise considering Ackman has notched several years of subpar returns, recently forcing him to lay off 18% of his staff (including his driver) to help him “focus” on investing (what was he doing before?)

Of course – as anybody who has watched the show “Billions” could tell you – in the privileged world of hedge fund management, there’s no worse fate than becoming a family office. Though Ackman would still have the $3.9 billion under the publicly traded Pershing Square Holdings Ltd. Including his own money, Ackman would still have some $5 billion to manage – roughly a quarter of the $20 billion he managed back in July 2015.

WSJ says about two-thirds of the cash available to be withdrawn by the end of the year is being redeemed. Meanwhile, longtime Ackman backer Blackstone Group has been pulling out cash, and JP Morgan Chase & Co’s asset-management group told clients it can’t recommend the fund.

Ackman’s fund declined again during the first quarter, trimming its total assets 12% to $8.2 billion.

Most investors can only pull one eighth of their assets each quarter. Pershing Square is invested in large and highly liquid stocks, like Mondelez International Inc. and Restaurant Brands International Inc. ; when it reduced positions in the past year, the share prices barely budged. A special vehicle whose investors can’t pull their money houses much of Pershing Square’s big investment in Automatic Data Processing Inc.

The Rest…HERE

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