Soros liquidates position in nutrition firm Herbalife

Investor William Ackman has accused nutrition firm Herbalife of running a pyramid scheme.
Investor William Ackman has accused nutrition firm Herbalife of running a pyramid scheme.PHOTO: BLOOMBERG

NEW YORK • Soros Fund Management, one of the hedge fund industry's most closely watched investors, exited its bet on Herbalife, the nutrition company that rival investor William Ackman has called a fraud. Soros, which has been betting on Herbalife for roughly two years, said in a regulatory filing that it has liquidated its position by selling nearly two million shares during the third quarter.

Soros oversees the private fortune of investor and philanthropist George Soros and his family. While Mr Soros himself is no longer making investment calls, the firm's involvement in Herbalife nonetheless drew battle lines between the hedge fund industry's elder statesmen and one of its new stars.

Soros and Mr Carl Icahn supported the nutrition and weight loss company while Mr Ackman has accused Herbalife of running a pyramid scheme.

Herbalife denies the allegations.

Nearly a year ago, Soros added to its Herbalife position, owning 3.4 million shares at the end of December. Fund managers are required to tell the government what they own 45 days after the end of the quarter. For Soros and other holders, the bet on Herbalife has likely been a profitable one, with the shares having climbed 43 per cent in the last 52 weeks alone.

Balyasny Asset Management, Angelo Gordon & Company and Partner Fund Management have also exited their positions.

AHL Partners and Grantham, Mayo, Van Otterloo & Company also exited their positions, regulatory filings show.

Although the filings are backward-looking and do not show what funds own at this point, they are still widely watched as the battle over the future of Herbalife heats up.

Mr Ackman, who announced a US$1 billion (S$1.4 billion) short position against the company nearly three years ago, has lost money on this bet again this year as the stock has climbed 46.5 per cent since January.

REUTERS

A version of this article appeared in the print edition of The Straits Times on November 18, 2015, with the headline 'Soros liquidates position in nutrition firm Herbalife'. Print Edition | Subscribe