August sell-off leaves William Ackman's hedge fund with flat gain in 2014 so far
The global stock markets turmoil in August and China's economy slowdown have impacted hedge fund mogul William Ackman, who was one of the best performers in 2014. Ackman's Pershing Square Capital Management's Pershing Square LP fund dropped 7.7 percent in August making the total gain during the year at 0.06 percent flat growth.
William Ackman is the founder of CEO of Pershing Square Capital Management. With concentrated bets on small number of stocks, Pershing Square Capital Management made 10 percent gain for its Pershing Square Holdings portfolio as on July end.
The portfolio fell 9.2 percent in August taking the total net gain for the year-to-date (YTD) to mere 0.1 percent only. Pershing Square Holdings fund recorded a significant growth of 40 percent in 2014 far ahead of Standard & Poor's gain of 13.7 percent.
The Pershing Square fund's largest holdings in snacks company Mondelez and drugs company Valeant.
Further to his disappointment, Ackman had a short on Herbalife stock, which was resistant to the market sell-off.
Among several funds, Ackman also joined the list of sufferers from market sell-off in August. Other major loser among the funds is Daniel Loeb's Third Point, which was at gain of 5.8 percent by the end of June and dropped 5.6 percent in August.
However, some hedge funds were able to minimize their losses despite the market sell-off. Standard & Poor's 500 fell six percent in August. The average loss of hedge funds stood at 2.2 percent, according to the latest data from Hedge Fund Research Show.
Viking Global Investors fell 2.1 percent. After this fall also, Viking Global is still indicating with gain of 7.4 percent for the year so far. Leon Cooperman's Omega Advisors ended with six per cent loss for August. With major exposure in technology stocks, Dan Benton's Andor Capital lost 4.5 percent.
Activist investors Ackman and Rosenstein are known for their investment strategies in the global stock markets. Generally they invest in undervalued stocks and continue to hold them until companies concerned unlock their value.
With this type of strategies, Ackman and Rosenstein are known for their ability to withstand adverse market conditions.
Hedge funds that beat market downtrend include Visium Asset Management's Balance Fund, which recorded a flat gain of 0.57 percent in August and 11.2 percent for the year.
The other gainer in the market is HG Vora Special Opportunities fund, which gained eight percent for the year and a flat 0.20 percent in August. New fund Clearfield Capital was flat for not only in August, but also for the whole year so far.