Pershing Square Holdings (LSE:PSH) Ltd swung into a pretax loss in the first half and the investment holding company flagged more challenges ahead.
Pretax loss for the six months ended June 30 was US$3.04bn against a profit of US$718.7mln in the year-earlier period in what the group called a challenging time due to rising inflation, monetary policy uncertainty and geopolitical events.
Chief executive Bill Ackman also announced Ryan Israel, who joined the group from Goldman Sachs (NYSE:GS) in March 2009, will become chief investment officer, although Ackman will remain portfolio manager and continue to have control over the ultimate decision making.
Net asset value (NAV) per share, including dividends, dropped 26% in the six months and the group said the decline in its equity portfolio was partially offset by a decision to hedge against inflation and rising interest rates.
Pershing Square said it made a “substantial loss” on Netflix after taking a large position in January before it decided to exit the position in April. Since the period end it has also fully sold its position in Domino's Pizza Inc.
In the year-to-date through August 16, the company’s NAV per share, including dividends, decreased 10.8.%.
“It is clear that these are very uncertain times, and there will be more challenging times ahead,” said chairman Anne Farlow. “However, the board remains confident in our long-term strategy and track record.”