Bill Ackman, founder and CEO of New York City-based Pershing Square Capital Management, called his investment in Valeant Pharmaceuticals International a "huge mistake" in an annual letter to investors," reports Bloomberg.
Mr. Ackman on March 13 sold off his hedge fund's stake in Valeant, which lost more than 95 percent of its stock value since an August 2015 — taking a $4 billion loss.
"Clearly, our investment in Valeant was a huge mistake," he wrote in the letter. "We deeply regret this mistake, which has cost all of us a tremendous amount, and which has damaged the record of success of our firm."
He said he should not have relied on Valeant's past management team to lead the company to success and acknowledged the powerful influence of external factors, like political scrutiny over high drug costs, that can hurt a company.
"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," Mr. Ackman wrote in the letter. "In retrospect, we misjudged the prior management team and this contributed to our loss."
A Valeant spokesman declined Bloomberg's request for comment.
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