Blackstone Group is still confident with Bill Ackman despite his big losses in Valeant Pharmaceuticals, according to Tom Hill, president and chief executive officer of Blackstone Alternative Asset Management.
Blackstone has investments in Pershing Square Capital Management, the hedge fund headed by Ackman.
“We haven’t lost confidence in Bill. You’ve got to know who you’re investing with. We know all his positions,” said Mr. Hill during the Reuters Global Investment Outlook Summit in New York on Monday.
Value Partners Asia ex-Japan Equity Fund has delivered a 60.7% return since its inception three years ago. In comparison, the MSCI All Counties Asia (ex-Japan) index has returned just 34% over the same period. The fund, which targets what it calls the best-in-class companies in "growth-like" areas of the market, such as information technology and Read More
Ackman is in high beta, high volatility bucket
Pershing Square recorded a loss of 21% this year through November 10. The hedge fund is one of the largest shareholders of Valeant Pharmaceuticals, which is currently confronting allegations of accounting fraud.
Valeant Pharmaceuticals lost nearly 60% of stock value over the past month. The decline was primarily due to allegations against it. On October 21 alone, Pershing Square lost around $1.1 billion from its investment in the pharmaceutical company.
The stock dropped from its highest level of $263.81 per share to as low as $70.30 per share. Valeant Pharmaceuticals is trading at $71.81 per share, down by 2% at the time of this writing around 1:20 in the afternoon in New York.
Mr. Hill, who also serves as vice chairman of Blackstone, said Mr. Ackman is in a “high beta, high volatility bucket.” He added that they made sure that they sized Mr. Ackman right from their standpoint on him.
According to Mr. Hill, Mr. Ackman “could be 50% up on the year. He could be down 30%.”
Demand for Valeant’s female libido pill Addyi is weak
Separately, Bloomberg noted that the demand for Addyi, the female libido-boosting pill made by Sprout Pharmaceuticals, a subsidiary of Valeant Pharmaceuticals is weak.
Valeant Pharmaceuticals acquired Sprout in August for $1 billion. The pharmaceutical company launched Addyi in the United States on October 17. The number of prescriptions for Addyi was only 227 since its launching compared with more than half a million prescription for Viagra during its first month on the market in 1998.
Stephanie Faubion, director of the Women’s Health Clinic at the Mayo Clinic commented, “Though there was going to be onslaught. There have been a few casual inquiries, but no prescriptions yet.”
On the other hand, Alna Salganicoff, vice president and director of women’s health programs at the Kaiser Family Foundation, said many women and their clinicians are skeptical about Addyi. The drug comes with a risk of serious side effects including severely low blood pressure and fainting. Women are advised to refrain from drinking alcohol while taking Addyi.
The drug is not indicated for use in postmenopausal women or men or to enhance sexual function. It is intended for premenopausal women with hypoactive sexual desire disorder.
Jonathan Schaffir, an ob/gyn at the Ohio State University Wexner Medical Center said, the number of women with hypoactive, sexual-desire disorder is relatively small. He added that none of his patients inquired about Addyi.