UPDATE 2-Ackman says Pershing Square down for the year after markets drop

(Adds details on investments)
By Svea Herbst-Bayliss
BOSTON, Aug 26 (Reuters) - Billionaire investor William
Ackman, one of last year's best performing hedge fund managers,
is now losing money after the recent market plunge wiped out a
double-digit gain.
The shift of fortunes shows how much tumbling markets,
sparked by sharp declines in Chinese stock prices, have
hurt the world's most prominent investors.
"At the date of this report, the year to date investment
performance has been erased, and the Company is at a loss
position for the year," Ackman's Pershing Square Capital
Management said in its interim financial statement released to
investors on Wednesday afternoon.
Only three weeks ago the New York-based manager had told
clients, including state pension funds in Massachusetts and New
Jersey, that the fund was up 10.1 percent for the year through
the end of July.
Ackman is one of the first major money managers to tell his
investors how the market turmoil has hit his firm, but he did
not say how much money the fund has lost this year.
He and other hedge fund managers are expected to release
monthly performance numbers next week.
Despite the sharp market moves, Pershing Square, which holds
only a small number of investments at a time, has "made no
meaningful recent changes to (our) current portfolio holdings,"
Ackman said in the financial statement.
Lower commodity prices or economic weakness in China are
unlikely to have a "material impact on the intrinsic value of
the portfolio," Ackman added.
Instead, he expects demand for cookies, industrial gases,
specialty pharmaceutical products, and animal health products
made by companies in his portfolio such as Mondelez
International Inc MDLZ.O , Air Products and Chemicals Inc (NYSE:APD)
APD.N , Valeant Pharmaceuticals International Inc (NYSE:VRX) VRX.TO and
Zoetis Inc (NYSE:ZTS) ZTS.N to remain "robust over the long-term."
In the first six months of the year, Allergan (NYSE:AGN_pa), Valeant,
Nomad Foods and Mondelez were the fund's biggest winners.
Meanwhile Herbalife (NYSE:HLF) Ltd HLF.N , which he has made a $1 billion
short bet against, cost the fund 3.7 percent in returns.
Due to recent strong returns, the fund's size had swelled to
roughly $20 billion, but that is set to shrink in light of the
latest drop. Ackman did not put a number on that decline.
Last year Pershing Square gained 40.4 percent in value while
the Standard & Poor's 500 index rose 13.7 percent.