William Ackman’s high-profile negative bet on Herbalife is proving to be a performance booster this month after being a major detractor all year. Shares of the multi-level marketer of nutrition products fell 1.25 percent on Monday to $48.36 and are now down more than 12 percent in July. So it is no coincidence that Pershing Square Holdings, the publicly traded vehicle managed by Ackman’s New York-based Pershing Square Capital Management, is up 1.9 percent this month through July 21. Keep in mind, however, that the stock is still up more than 28 percent for the year, which cuts into Pershing Square’s annual gains. Herbalife was the second biggest source of losses for Pershing Square in the first quarter. Pershing Square is up 5.1 percent for the year.
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Hedge funds are poised to post a strong month…as long as China’s woes don’t wreak havoc on the markets the rest of the week. Through last week, the average fund was up 1.4 percent, according to the latest weekly report from Lyxor’s Managed Account Platform Research team. Commodity trading advisors and their human-driven macro counterparts figure to be outperforming, Lyxor adds. This is because CTAs were prepared for the big decline in commodity prices this month. Lyxor says that since the end of May, CTAs have boosted their short positions in precious metals and energy. They also have no emerging markets currency exposure, the report adds. “The slump in several EM currencies since mid-July is not having any meaningful implication for hedge funds,” it adds, although it does note that some global macro managers are long the Mexican peso versus the U.S. dollar, “but this is compensated” by their short position in the euro versus the U.S. dollar.
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Bank activist specialist Lawrence Seidman has identified his newest target. The Parsippany, New Jersey-based Seidman & Associates founder disclosed that he owns 9.01 percent of MSB Financial Corp., the holding company for Millington Savings Bank in Millington, New Jersey. The company, whose stock has a $57 million market capitalization, recently completed its conversion from a mutually-owned institution to a stock-owned company. In typical 13D language, Seidman says he thinks the stock is undervalued and that prior to the recently completed second step of its conversion he had a conversation with the president, chairman and one director. Seidman adds that on July 22 he called the president “to discuss ways to maximize shareholder value,” including representation on the company’s board.
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Stephen Mandel Jr.’s Lone Pine Capital said in a regulatory filing that it owns more than 8.35 million shares of Horizon Pharma Public, or 5.4 percent of the total outstanding, according to a regulatory filing dated July 17. The Greenwich, Connecticut firm did not own any shares of the biopharmaceutical company at the end of the first quarter. It has not yet filed its holdings for the June three-month period.
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Daniel Och’s OZ Management disclosed that it owns more than 8.6 million shares of Starwood Hotels & Resorts Worldwide, or 5.05 percent of the total outstanding. This is more than triple what the fund, managed by New York multistrategy firm Och-Ziff Capital Management, owned at the end of the first quarter.
