Ackman: Investment in Valeant a 'Huge Mistake'
In his annual letter to investors of his hedge fund, Bill Ackman “deeply and profoundly” apologized for his investment in Valeant, a move that ultimately cost Pershing Square Capital Management $4 billion.
"My approach to mistakes is that I personally assume 100 percent of the responsibility on behalf of the firm while sharing the credit for our success," Mr. Ackman said.
"While I and the rest of the Pershing Square team have suffered significant losses from this failed investment as we are collectively the largest investors in the funds, it is much more painful to lose our shareholders' money, and for this I deeply and profoundly apologize," he added.
Due largely to his investment in Valeant, Mr. Ackman's Pershing Square Holdings saw returns for its $11.1 billion main fund tumble 13.5 percent net of fees in 2016, according to a report the company released late Tuesday. This comes after his publicly-traded hedge fund experienced a 20.5 percent loss in 2015.
Mr. Ackman in part blamed Valeant’s overpaying for Salix Pharmaceuticals in 2015 for the drugmaker’s downfall. But he also took blame for misjudging the company’s management and its aggressive strategy.
In the letter, Mr. Ackman said he had learned lessons, including that “a management team with a superb long-term investment record is still capable of making significant mistakes.”
Mr. Ackman did acknowledge that the new management of Valeant, the parent company of Bausch + Lomb, led by CEO Joseph Papa, has stabilized the company and offered hope for investors of the company moving forward.
“We have grown to admire Joe Papa and the new, extremely hard-working, Valeant management team,” Ackman said in his letter. “We believe that Valeant has been stabilized and now has sufficient resources to enable it to recover to its full potential.”
Valeant’s stock has lost more than 95 percent of its value since an August 2015 peak.
Mr. Ackman's full letter can be accessed here.
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