The Morning Brief: Pershing Square A Top Performer Last Month

William Ackman’s Pershing Square is one of the top performing hedge funds in what is otherwise a very volatile year, with a wide range of performance figures among hedge funds. The New York activist fund was up 7.30 percent in April alone, bringing its gains for the first four months of the year to 19.21 percent, according to the latest data from HSBC.

Larry Robbins’ Glenview Capital Partners, which surged nearly 43 percent last year, is only up 1.30 percent through April. On the other hand, at least two offerings from Sloane-Robinson’s Global fund are each down more than 18 percent through May 5 — the Japan portfolio and International portfolio. Robert Citrone’s Discovery Global Macro Fund is down 13.57 percent through May 2 while his Discovery Global Opportunity Fund was off 12 percent through April 30. Marcato International, the activist hedge fund headed by Richard McGuire, a former partner at Pershing Square was down 6.29 percent for the year, through April.

ValueAct Capital president Mason Morfit has officially resigned from the board of directors of Valeant Pharmaceuticals. In a letter to the board, Morfit, who has been a director since 2007 — one year after the San Francisco activist fund became a shareholder — explained he wants more time to devote to his directorship on the board of Microsoft. He also said he wants to give ValueAct more flexibility to sell shares in the pharmaceutical giant, which has agreed to team up with activist William Ackman of Pershing Square Capital Management to make an unsolicited bid for Allergan. “Due to the company’s strategy, there have been very long periods during which we have not been able to buy and sell shares,” he explains in the letter made public in a regulatory filing. He says ValueAct has been restricted from selling any shares in Valeant since June 2013, during which time the stock has risen from $85 to $135. “Beginning in February 2014, I expressed to you and the board my desire to manage down this position in our fund,” he states, noting that Valeant accounts for about $2.5 billion of ValueAct’s $14 billion in assets under management. “By resigning today, with the Allergan transaction in the public domain and with Valeant’s earnings report later this week, this will create an opportunity for ValueAct Capital to sell if we choose later this year.” Morfit emphasizes that this is not a statement about Valeant’s fundamental business, future performance or the merits of the Allergan deal. The resignation is not surprising. At the Active-Passive Investor Summit held on April 22 in New York — one day after Pershing Square’s Allergan bid was made public — ValueAct CEO and co-founder Jeffrey Ubben said Morfit planned to resign from Valeant’s board. Two days later, Valeant announced that Morfit was one of three directors who would not be included in its slate of director nominees at its 2014 annual meeting.

Investors pumped more than $2 billion in net new capital to Asian hedge funds in the first quarter, bringing total Asian hedge fund industry capital to $114 billion, according to HFR. This is the second consecutive quarterly record.


Temasek Holdings, Singapore’s $173.3 billion sovereign wealth fund, has confirmed that it is starting a venture with the Singapore-based hedge fund Dymon Asia Capital to back new hedge funds. Bloomberg reports that Temasek has committed $500 million in initial capital to become a minority stakeholder in the firm. The first investment reportedly will be in long-short fund that will focus mostly on Asian -Pacific equities, managed by Carl Vine, who formerly worked for SAC Capital Advisors. Paul Tudor Jones II’s Tudor Investment Corp. was an initial backer of Dymon, which launched in Asia in 2008 and now has $4 billion in assets. Temasek is the world’s ninth largest SWF, according to Institutional Investor’s SWF Institute, just behind Singapore’s Government of Singapore Investment Corporation, which has $320 billion in assets.

Meanwhile Steven Cohen, the former CEO of SAC who is now managing his money through his family office, Point 72 Asset Management, is having trouble selling his Manhattan co-op, according to the New York Post. The 9,000-square-foot penthouse, currently listed at $98 million, has been on the market since April 2013.