Bill Ackman’s Pershing Square Capital is down nearly 21 percent through November. Ackman notes that 2015 is shaping up to be his fund’s worst year ever, even worse than 2008 and the financial crisis. The fund only declined 12 percent then.
Ackman notes he’s in this, and many of his holdings, for the long-term, saying, “We much prefer growth in intrinsic value than short-term increases in market value without corresponding progress in intrinsic value. Market value declines during periods of intrinsic value growth create opportunities for long-term profits, as our funds and our portfolio companies are able to purchase shares at attractive valuations.”
The biggest issues for the fund during 3Q, Valeant (VRX) and Platform Specialty (PSH). Of note, Ackman comments on Valeant, “Had Valeant been a private company, we believe that the controversy surrounding its specialty pharmacy and drug pricing issues would not have been as newsworthy nor perceived as material to the company’s intrinsic value. As a public company, Valeant’s stock price precipitous decline gave credence to the short sellers’ attacks on the company, and the corresponding media coverage caused some reputational damage.”
Then, there’s Platform, where Ackman noted, “Platform Specialty Products which represents a small portion of the portfolio (currently 3.5%, at peak valuation, 6.3%), generated results that were below our expectations due to execution issues, foreign currency effects, as well as other factors specific to certain of its business units. While disappointing, we view these factors as generally short-term in nature and addressable over the short to intermediate term.”
