Washington's 'unprecedented overreach' causing losses -asset manager Visium

NEW YORK, April 27 (Reuters) - Visium Asset Management, the
approximately $7 billion investment firm led by Jacob Gottlieb,
is blaming the U.S. government for some of its losses this year.
The Visium Balanced hedge fund, which focuses on healthcare
stocks, lost money in March on Allergan Inc (NYSE:AGN_pa) AGN.N when a
planned merger with Pfizer Inc (NYSE:PFE) PFE.N collapsed because of
concern the U.S. Department of the Treasury would block the
deal, along with other so-called tax inversions.
"We did not expect the unprecedented overreach of the
Treasury's authority and we incorrectly interpreted the Treasury
as recognizing the limitations of its own powers," Visium wrote
this month in a private letter to clients that was reviewed by
Reuters. The letter said Visium had sold its Allergan shares
following the news.
The fund also cited government concerns for losses on
pharmaceutical company Endo International PLC ENDP.O . In its
letter, Visium blamed the decline on concern that companies such
as Valeant Pharmaceuticals International Inc (NYSE:VRX) VRX.TO , which
acquire drugs and then raise their prices, could face increased
regulation.
"Investors have been wary of buying into companies that are
exposed to this pricing reform," the Visium letter said. "We
believe ENDP is purely collateral damage from the VRX decline."
It said Endo's lower stock price "presents an opportunity,
as it is well positioned to recover from its recent price
weakness."
The Balanced fund is down nearly 8 percent this year through
April 15, according to a report by HSBC's Alternative Investment
Group.
Visium also suffered losses in its largest hedge fund,
Visium Global, which bets on a variety of industries. The fund
is down about 5.6 percent for the year as of April 15, according
to the HSBC report.
Among the fund's losing bets was one against energy stocks
as oil prices rallied, according to a separate letter to
investors. The losses erased gains from its holdings of Swiss
telecommunications company Sunrise Communications Group AG
SRCG.S and hotel groups Starwood Hotels & Resorts Worldwide (NYSE:HOT)
Inc HOT.N and Marriott International Inc MAR.O .
A smaller fund called Visium Institutional Partners is also
down nearly 13 percent for the year through April 15. An
industry benchmark called the Hedge Fund Intelligence Americas
Global Equity Index fell about 3.5 percent through March.
New York-based Visium disclosed to clients in March that it
is being investigated by the U.S. Justice Department and the
Securities and Exchange Commission over trading and valuation
issues.
A spokesman for Visium did not immediately respond to a
request for comment.