By Shane Dinneen has decided to resign from Ackman's $12 billion Pershing Square Capital Management firm, the fund manager wrote in a letter to clients on Tuesday. Although Ackman said he tried his best to convince Dinneen to stay, the 31-year old recently decided "it was time for him to move on to areas of his own interest outside of activist investing."
Ackman also said "we are encouraged by the recent regulatory developments concerning the Company," hours after a report that Canadian regulators have launched an inquiry on Herbalife and nearly one week after a U.S. Senator asked two U.S. regulators to look into the company.
A copy of the letter dated January 28 was seen by Reuters.
Dinneen resigned just over a year after he joined his boss center stage to make public Pershing Square's $1 billion short bet against Herbalife.
Ackman called the nutrition and weight loss company a pyramid scheme, something Herbalife has vehemently denied. He also said its stock price would fall to zero, once regulators shut the company down. It closed at $62.54 on Tuesday.
Pershing Square analysts are known to work long hours on the firm's investment presentation but are rarely seen or named in public. Traditionally, Ackman acts alone as his firm's public face, taking the credit, or blame, for his bets.
As paper losses mounted on the Herbalife bet thanks to the stock price's 138 percent gain last year, plenty of criticism was heaped on Ackman and his team. Dinneen unwittingly found himself at the center of rumors late last year that he had been dismissed, something Ackman categorically denied.
On Tuesday, Ackman said Dinneen, who graduated from Harvard in 2005, could return to the investment team whenever he wants and that Dinneen will keep a bulk of his own money invested with Pershing Square.
For Ackman and his investors 2014 has gotten off to a pleasing start after the fund ended 2013 with a 9.3 percent gain in spite of Herbalife and a $500 million loss on J.C. Penney.
His investment in Beam (>> BEAM Inc) paid off as Japanese whiskey producer Suntory (>> Suntory Beverage & Food Ltd) said it would pay $13.6 billion cash for the company. Herbalife's share price has fallen 20.5 percent since the start of the year, so far encouraging news for Ackman.
U.S. Senator Edward Markey last week urged the Securities and Exchange Commission and the Federal Trade Commission to probe Herbalife and on Tuesday a report by the New York Post that Canada's top consumer regulator had launched a probe into complaints about Herbalife further pushed the share price down.
In the letter to clients, Ackman also said that as the Herbalife investment has moved from financial analysis to regulatory and legal execution, his firm's team of lawyers have become more instrumental in his campaign against Herbalife.
"Shane has not been leading this investment for some time," he said.
(Reporting by Svea Herbst-Bayliss; Editing by Eric Walsh, Bernard Orr)
By Svea Herbst-Bayliss
