January 12, 2015 / 8:21 PM / 5 years ago

Exclusive: Hedge fund Mason Capital ends 2014 down 12 percent - source

BOSTON (Reuters) - Hedge fund Mason Capital lost 12 percent in 2014, making for one of the industry’s biggest declines, after the New York-based firm was hit by a failed merger of pharmaceuticals companies Shire and AbbVie, a person familiar with the firm said in Monday.

The $9 billion hedge fund, which manages money for state pension funds and other wealthy investors, sold depressed Shire shares after the two companies called off their planned deal in October, the source said. The shares later rebounded.

Mason ended October down 7 percent. In November, when many hedge funds recovered, it was nearly flat, gaining just 0.03 percent as a number of energy stocks in its portfolio were hit by falling oil prices.

The average hedge fund gained 3.57 percent last year, data from research firm Hedge Fund Research show.

One of Mason’s clients is the state of Rhode Island’s pension fund. According to the state’s data, Mason Capital was its worst-performing global equity hedge fund in the last five years, even though it boasted a 22.8 percent return in 2013.

Shire has since agreed to buy U.S. group NPS Pharmaceuticals Inc for $5.2 billion, the Dublin-based drugmaker’ s biggest acquisition yet, as it seeks to strengthen its position in the lucrative field of medicines for rare diseases.

Shire shares were down 3.7 percent in late New York trading at $209.25.

Reporting by Svea Herbst-Bayliss; Editing by Meredith Mazzilli

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