Bill Ackman’s hedge fund has taken a beating—down about 16% year to date—but not just because Valeant, its biggest bet and a top holding, has been plummeting after damaging allegations about its accounting practices and scrutiny over its drug prices.
Valeant (VRX), a pharmaceutical company whose stock had soared after its recent flurry of acquisitions, has fallen 54% over the last three months and 27% in October alone. For Ackman’s Pershing Square Capital Management, the bloodshed doesn’t end there: Platform Specialty Products (PAH), a chemical maker which counts the hedge fund as its biggest shareholder—with a more than 20% stake—has also lost more than half of its value since the end of July.
Platform’s shares hit a six-month low of $10.75 on Tuesday after the company announced its CEO’s retirement last week, following a reduction in its earnings outlook. The stock rebounded somewhat Wednesday but is still down nearly 7% this week.
Even before the two stocks’ recent selloff, Platform was a much smaller holding for Ackman at about $1.1 billion, compared with almost $4.3 billion for Valeant at the end of the second quarter. After the market declines, the hedge fund’s stakes are currently worth about $484 million and $2.3 billion, respectively.
Some of Pershing’s other stock picks have fared significantly better. Air Products & Chemicals (APD), now the fund’s biggest holding at $2.9 billion, has returned 6.6% in the last three months, while the returns of the S&P 500 have been slightly negative. Mondelez International (MDLZ), the maker of Oreo cookies and other snacks, which is also one of Ackman’s major positions, has returned more than 8% over the same period.
It’s unclear, however, whether the outperformance of those stocks will be enough for the hedge fund to make up for the steep drops in Valeant and Platform. A spokesperson for Pershing Square declined to comment.