Monday, February 9, 2009

Ackman Apologizes For Abysmal Performance, Allows Redemptions... Shortly

Bloomberg reports that Bill Ackman has done the unthinkable and actually apologized for his performance (granted, it was some performance). The man who single-handedly destroyed Ambac and MBIA wrote the following in a February 8th letter to investors: "I apologize profusely for the fund’s results to date."

Ackman also gives some vague assurances that investors may or may not be able to withdraw 10 cents on the dollar in about a month.

Frankly, a fund manager should not have to apologize for bad performance, nor take props for outperforming: the fact that he is in business in the first place should be indicative enough. If he sucked, he wouldn't have a fund to run.

If any apologies are due, it is from investors who were retarded enough to give Ackman 2 and 20 to invest $2 billion in one stock. I will repeat that because it bears repeating - ONE STOCK!!! No secrecy here, no crazy active-managed profit-taking, no insane CDS, MBS, RBS, LSD trading action that only hedge funds can partake in... The fund was called the Target Fund for god's sake. Ackman had given full disclosure what PSIV was investing in; investors knew what they were getting into. But what makes our brains bleed, is WHY THE HELL DID PEOPLE NOT JUST BUY TGT STOCK? You want to give a guy 2% a year plus pocket only 80% of the upside by doing something you can do FOR FREE in the market by calling your E-trade broker...


Guess Boaz won't be getting a callback for that PSIV PM job after all. Sphere: Related Content
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Peatey said...

At least some of the investors seem to have hedged all of their exposure... So 2/20 of 2/20 and you are delta neutral, That seems like a guaranteed 2% loss with no upside (ignoring the funding cost of the short side for the moment).

Advant Guard said...
This comment has been removed by the author.
Advant Guard said...

I disagree. No individual investor could have gotten returns of -89% just by investing in Target stock. The 52-week change in Target stock price is only -39.6% They would need the assistance of a professional investor who knew how to add leverage to the position in order to achieve the same returns as the hedge fund.

Anonymous said...

At some point, you would think investors in these funds would get their head out of the sand.