(Adds details from letter, fund performance)
By Svea Herbst-Bayliss
BOSTON, March 29 Billionaire hedge fund manager
William Ackman has apologized to clients for betting on Valeant
Pharmaceuticals International Inc, telling them he was
"deeply and profoundly sorry" for losing so much of their money
on the investment.
Ackman decided to sell his entire Valeant position earlier
this month, suffering a roughly $4 billion loss since having
bought the stake in early 2015.. He called the
investment a "huge mistake."
"My approach to mistakes is that I personally assume 100
percent of the responsibility on behalf of the firm," he wrote
in the firm's annual letter released to clients on Tuesday
evening and seen by Reuters on Wednesday.
The 50-year-old manager acknowledged the toll the bad bet
has taken on his image and said he misjudged the management team
in place when he bought the stock.
"We deeply regret this mistake, which has cost all of us a
tremendous amount," he wrote.
Thanks largely to Valeant's tumble, Ackman's hedge fund
Pershing Square Capital Management suffered back-to-back losses
in 2015 and 2016 as his reputation as one of the hedge fund
industry's most talented investors dimmed.
Since launching the firm in 2004, Ackman has delivered a
compound annual net return of 14.8 percent. He tends to take
concentrated bets and often pushes management to perform better
by urging spin-offs or other measures.
Nonetheless the board of Pershing Square Holdings, Ackman's
publicly traded investment vehicle, decided after a review of
his performance that he should continue to manage the
investments, Anne Farlow, the chair, wrote in a separate letter.
She welcomed Ackman's openness in analyzing what led to the
In his letter, Ackman laid some blame at the feet of
Valeant's former management team, which he had thought was
building the next Berkshire Hathaway, once of the most
profitable companies in the country.
Ackman met former Valeant Chief Executive Michael Pearson in
2014, when Pearson enlisted Ackman's help to try and buy
Allergan and Pershing Square bought up Allergan shares to try
and push that company's management into selling to Valeant.
Allergan ended up selling to a Actavis, netting Ackman his
best-ever returns with his Pershing Square LP fund gaining 36.9
percent in 2014.
Ackman fired Pearson in 2016, however, after he got a seat
on Valeant's board.
"Prior management substantially overpaid for the company's
largest acquisition - its acquisition of Salix - which occurred
contemporaneously with the substantial majority of our
investment in the company," Ackman wrote.
Pershing Square Holdings has swung to losses of 2.5 percent
after starting the year with gains, but Ackman promised a quick
recovery in the letter to clients.
(Reporting by Svea Herbst-Bayliss; Editing by Lisa Shumaker and