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Ackman's Pershing Square's Assets Fell 20 Percent in 2017

Ackman's Pershing Square's Total Assets Fell 20 Percent in 2017

(Bloomberg) -- Bill Ackman’s Pershing Square Capital Management reported a net loss of 4 percent on its investments in 2017, with assets under management falling by almost $10 billion over the past two years.

Pershing Square said in a presentation Monday that total assets under management fell to $8.77 billion at the end of 2017, down from about $11 billion at the same point in 2016 and $18.3 billion in 2015. The fund’s net loss trailed the broader hedge fund industry, which returned 6.5 percent on average on an asset-weighted basis in the best annual performance since 2013, according to a Hedge Fund Research report this month. 

Pershing Square has suffered from an exodus of money out of hedge funds -- particularly the poorer performers -- as investors move to cheaper passive products.

The firm confirmed a new stake in Nike Inc., which has increased 29 percent from the average price Pershing Square paid for its holding. The firm also said it had bought and sold a position in credit rating and financial data services company S&P Global Inc. That stake was sold because Pershing wasn’t able to build a full-size position at an attractive price.

Pershing Square’s largest return was made on Restaurant Brands International Inc., which improved gross returns by 5.2 percent. Its biggest loss was on its investment in Herbalife Ltd., which reduced gross returns by 4 percent. The firm said its investments in Automatic Data Processing Inc., where Ackman waged a losing proxy battle last year, and embattled Chipotle Mexican Grill Inc. “are in early stages of value creation.”

The firm also announced a series of organizational changes that will free up Ackman to focus more fully on money management by having partner Ben Hakim interface with investors. Nick Botta, Pershing Square’s president, will also take on increasing responsibilities for non-investment team related operations, the firm said.

To contact the reporter on this story: Scott Deveau in New York at sdeveau2@bloomberg.net.

To contact the editors responsible for this story: Elizabeth Fournier at efournier5@bloomberg.net, Devin Banerjee

©2018 Bloomberg L.P.