Billionaire hedge-fund manager Bill Ackman bet big on Valeant, a pharmaceutical company with a reputation for sketchy practices. But Ackman’s efforts to rehabilitate the firm proved very expensive for his investors. Earlier this month, his fund, Pershing Square Capital, finally unloaded all of its depleted Valeant stake, taking a $4 billion hit on the position.
And now, in an annual letter sent to investors, Ackman admits he made a “big mistake” taking on Valeant. “The highly acquisitive nature of Valeant’s business required flawless capital allocation and operational execution, and therefore, a larger than normal degree of reliance on management,” Ackman wrote. “In retrospect, we misjudged the prior management team and this contributed to our loss.”
“We deeply regret this mistake,” Ackman apologized, “which has cost all of us a tremendous amount, and which has damaged the record of success of our firm.”