Bill Ackman, the hedge-fund manager who is pressing for changes at Procter & Gamble Co., is losing the first analyst he hired for his Pershing Square Capital Management LP, according to a letter to investors.
Scott Ferguson, now a partner at Pershing Square, will leave by the end of the month to start a hedge fund that will use an activist strategy similar to Ackman’s, the letter said. The fund, which will conduct value-oriented research and push for changes at companies, plans to open next year, said a person with direct knowledge of the matter, who asked not to be identified because the information isn’t public.
Ferguson, 38, is the second investment team partner to leave New York-based Pershing Square to start his own hedge fund, Ackman said in the July 16 letter, a copy of which was obtained by Bloomberg News. Mick McGuire began Marcato Capital Management LLC in 2010 with financing from Blackstone Group LP. (BX:US)
Ferguson couldn’t be reached to comment on the start of the fund.
Pershing Square and San Francisco-based Marcato partnered last year to form an investment group that took an almost 10 percent stake in Alexander & Baldwin Inc. (ALEX:US) and lobbied the Honolulu-based company to split its real estate and transportation businesses. That breakup took effect on June 29. Pershing Square and Ferguson’s fund will probably team up on similar ventures, Ackman said in the letter.
Marcato, which has $550 million in assets, stopped accepting money from new investors on July 1, according to a person with knowledge of the firm, who asked not to be identified because the information is private.
Ferguson was the first analyst Ackman hired in September 2003 before he started Pershing Square in January 2004, according to the client letter. Ackman, 46, said he helped Ferguson decide on the timing of his departure from Pershing Square.
“In recent years, Scott and I have discussed the potential for him to leave Pershing Square and form his own firm,” Ackman said. “Recently, Scott and I concluded that now, at 38 years of age (I launched Pershing Square just shy of 38), would be a good time for him to take the next step in his career.”
Ferguson is responsible for conducting research across industries at Pershing Square, one of the people said. The hedge fund declined 6.4 percent in the second quarter, paring gains this year to 2.3 percent, according to the investor letter. Since inception, the fund has returned 379 percent net of fees.
Hedge-fund startups increased in the first quarter to 304, the most since 2007, as industrywide capital rose to a record $2.13 trillion, according to Chicago-based Hedge Fund Research Inc. Assets have since pulled back to $2.1 trillion after managers incurred losses in the second quarter, HFR said.
Ackman invests in companies he deems undervalued and then urges changes to boost shareholder returns. Pershing Square disclosed a $1.8 billion stake in Procter & Gamble earlier this month. Ackman said he intends to press for management changes at the maker of Tide laundry detergent and Pampers diapers.
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