By Svea Herbst-Bayliss
BOSTON Oct 2 William Ackman's Pershing Square
Capital Management staunched two months of bleeding in
September, as his flagship fund eked out a gain, leaving its
returns for the year roughly flat, according to a performance
The activist investor told clients that the Pershing Square
LP fund gained 0.2 percent last month, an improvement from
August's 3.6 percent loss and July's 2.2 percent decline,
according to an update that was seen by Reuters.
While Ackman did not say what helped the fund, it is clear
that he benefited from exiting J.C. Penney shares at the
end of August, before the retailer's stock price tumbled 30
percent in September.
Ackman, once the retailer's biggest shareholder, a board
member and its most public cheerleader, sold his 18 percent
stake in J.C. Penney at $12.90 a share. Other prominent
investors who had also been big shareholders, including George
Soros, Richard Perry and Kyle Bass, likely suffered heavy losses
as the stock price dropped sharply. It closed at $8.72 on
Still the Penney debacle, where Ackman lost roughly $500
million, has left its black mark on Ackman's fund, which started
the year with a 6.2 percent gain in the first quarter. Ackman is
still considered a very talented investor, however, and he has
delivered an average annual return of 20 percent since launching
the fund in 2004.
The fund is up 0.5 percent for the year through the end of
September, trailing the 4 percent gained by hedge funds, on
average, and lagging far behind the roughly 19 percent gained
this year by the Standard & Poor's 500 stock index.
The fund, which started the year with $12 billion, now
manages $10.8 billion, the performance update said.
Gains in stocks, including Beam, Canadian Pacific
Railway and Air Products & Chemicals, where
Ackman announced an activist position in late July, helped the
fund. But its $1 billion short bet against Herbalife
hurt as the food supplement's company's stock price climbed in
With Air Products and Chemicals, Ackman is taking a more low
key approach, having not spoken publicly about the stock once
even though the hedge fund scored a major victory last week when
the company said it would look for a new chief executive and add
three independent directors.