Parting is such sweet sorrow–but not always.
Those Shakespearian words likely ring empty for Ackman as he parts ways with Bill Doyle, the man who introduced him to Michael Pearson and what would become one of his most disastrous investments ever, reported the Financial Times.
Doyle, who was one of Ackman’s classmates at Harvard Business School, has been a member of the investment team at Ackman’s Pershing Square Capital management since October 2014. He knew now former Valeant CEO Pearson from their days working together at McKinsey, the consulting company. Pearson and Doyle pushed for Ackman to help Valeant Pharmaceuticals (VRX) fund a huge bid for Dublin-based Allergan (AGN).
During the time of the announced takeover bid, Ackman said that “Bill vouched for Mike” and that “there was a lot of trust there,” reported the FT.
However, the deal ended up costing Pershing Square billions. Valeant’s stock has plummeted more than 90% since its Aug. 5 peak, falling from a high of $263 a share to $24.36 a share as of Thursday at 11:56 p.m. That steep drop has hit Pershing Square hard. The publicly listed part of the company reported year-to-date losses of 25.2% as of March 22, most of which stem from its Valeant holdings. Since that report, Valeant’s shares have dropped even further, deepening Pershing Square’s losses.
Ackman, though, still remains optimistic. In the note announcing Doyle’s departure, he anticipated that Valeant would win back investors’ trust under the leadership of new CEO Joseph Papa.
“Over time under Joe’s leadership, we expect the market to rerate Valeant to a substantially higher valuation reflective of its underlying business,” wrote Ackman.
Doyle will move on to focus on Novocure, a brain cancer company hwere he is an executive chairman. Doyle also will working part-time at Table Management, which oversees private investments for Ackman’s family.