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The Morning Brief: Pershing Square’s Losing Streak Continues

William Ackman’s Pershing Square Holdings, the publicly traded vehicle from his New York firm Pershing Square Asset Management, has picked up where it left off last year. The activist fund is down 11.4 percent so far this year through January 12. For those keeping score, that covers just seven trading days. Yikes!

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Carlson Capital boosted its activist stake in Vitamin Shoppe to 7.79 percent. In addition, the Dallas hedge fund firm said it reached a compromise deal with the retailing chain. Under the deal, Vitamin Shoppe will immediately expand the size of its board by one director, to 11, and appoint an independent director proposed by the hedge fund firm. This person will also will be appointed to the board’s nomination and governance committee. Then, by March 31, the company will boost the size of its board again to 12 members. At the company’s upcoming annual meeting, these two directors will be put on the slate for shareholders to vote on, replacing two current directors who will not seek re-election, thus reducing the size of the board back to 10 members. The company also agreed that by the end of February it will hire an experienced operational consultant to identify areas of increased operational efficiency and potential cost-cutting measures.

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Tiger Global Management participated in the Series E round of funding for ShopClues, an India-based mass-market online retailer. As a result of the latest funding, the company is now valued at more than $1.1 billion, according to a press release. This makes the company the latest so-called unicorn — private companies with valuations exceeding $1 billion. New York-based Tiger Global had previously made an investment in the company. Radhika Aggarwal, co-founder and chief business officer of ShopClues, said in the press release that the company expects to go public in 2017.

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Hedge funds posted an aggregate loss of 0.77 percent in December and a 2.01 percent loss for the year, according to data tracker eVestment. This was the fifth monthly loss of the second half of the year and the eighth for the year. Interestingly, roughly half the funds made money and lost money. The average profitable fund was up 8.12 percent, while the average losing fund was down 9.87 percent. “The implication being that within many universes, good relative performance was available, providing investors could determine what processes could work in difficult times,” the report states. Managed futures lost 2.55 percent, the strategy’s fourth annual loss in the past five years.

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New York-based Sandell Asset Management cut its stake in Ethan Allen Interiors by more than 200,000 shares, to 4.6 percent of the total, citing “ordinary portfolio re-balancing activities.” In November, the activist hedge fund firm lost its proxy fight with the furniture maker.

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