Ackman to face investor grilling after record quarterly loss

By Svea Herbst-Bayliss
BOSTON, April 6 (Reuters) - Billionaire investor William
Ackman is set to face close questioning on Wednesday when he
details his hedge fund's biggest-ever quarterly loss and
explains how he plans to handle the investment that led to the
fall - Valeant Pharmaceuticals (NYSE:VRX) International VRX.TO .
Ackman's Pershing Square (NYSE:SQ) Capital Management has blocked off
one hour on Wednesday morning for him and his analysts to walk
investors through exactly how one of its funds lost 25 percent
in the first three months of 2016, including bets on Platform
Specialty Products PAH.N , Herbalife (NYSE:HLF) HLF.N and Valeant.
The losses are a severe blow for one of the hedge fund
industry's most closely followed investors and come on top of a
record 20.5 percent drop in 2015.
He has already told investors that he plans to take a far
more active role in Valeant and last month joined the company's
board, cementing his commitment to the company for some time.
The board is looking for a new chief executive and is committed
to filing a long-delayed annual report by the end of April.
Ackman is sure to be pressed for details on all those issues
in the call, which is a regular quarterly update with investors.
A spokesman for Ackman declined to comment.
Five months ago Ackman held a call that lasted nearly four
hours as he tried convince investors that Valeant was still a
good buy. That message seemed to fall on deaf ears as the stock
price has tumbled nearly 70 percent since then.
Ackman lost roughly $1 billion on his Valeant investment in
one day last month when its stock fell 50 percent on fears it
could default. That prompted even long-time Valeant supporters
such as Brave Warrior Advisors' Glenn Greenberg to liquidate
half of his stake.
Overall, Ackman's investors appear to be sticking with him.
Redemption requests for the first quarter totaled roughly 2
percent of the firm's roughly $12 billion in assets.
"This is going to be a badly scraped knee that may even
require stitches but it is not life threatening," one Ackman
investor said about the losses and Valeant situation.
The structure of Pershing Square shields it from a sudden
sharp loss of capital - investors can only withdraw their money
gradually and some of them can only exit by selling shares to
another investor.
In a rare piece of good news, Valeant said on Tuesday that
it has finished an internal review and found no additional
problems that would require further restatements of its
financial statements. Its shares climbed 10 percent.