Pershing Square investment in Valeant in 2015

Pershing Square invested in Valeant Pharmaceuticals in 2015 and made public a presentation for it. If you are interested to learn about how hedge funds write presentations, here is one for you to learn from.

About the Pershing Square deck(s)

All information is public information (I won’t share anything confidential on this site).

Deck one

This is the initial deck Pershing Square shared on Valeant.

Deck two

This is the second deck from Pershing Square on Valeant.

About the deal

In 2015, Pershing Square Capital Management, led by Bill Ackman, made a substantial investment in Valeant Pharmaceuticals, a decision that became one of the most notable episodes in the hedge fund’s history. Ackman was attracted to Valeant’s aggressive growth strategy, which involved acquiring other companies to bolster its portfolio of drugs and cut costs. However, Valeant’s business practices, including significant price hikes on acquired drugs and questionable accounting methods, soon came under intense scrutiny.

The controversy intensified as investigations into Valeant’s pricing and distribution practices unfolded, leading to a significant decline in the company’s stock price. Pershing Square’s investment suffered massive losses as a result. Ackman’s bullish stance on Valeant and his active defense of its business model were heavily criticized, especially as Valeant’s stock continued to plummet.

Ackman eventually sold Pershing Square’s stake in Valeant in 2017, resulting in a reported loss of about $4 billion. This episode is often cited as a cautionary tale about the risks of activist investing and the importance of thorough due diligence, especially regarding a company’s operational practices and regulatory environment.

About Pershing Square

Pershing Square Capital Management, founded by Bill Ackman in 2004, is a New York-based hedge fund known for its activist investment strategy. The fund specializes in taking significant positions in large-cap companies, with the intent of influencing management and the board to implement changes that enhance shareholder value. Pershing Square’s approach often involves advocating for strategic shifts, operational improvements, and financial restructuring. The fund’s portfolio is concentrated, typically comprising a select group of investments that Ackman and his team rigorously research and believe to be undervalued or underperforming relative to their potential.

Over the years, Pershing Square has engaged in several high-profile activist campaigns, some of which have been markedly successful, while others have attracted controversy and debate within the investment community. The fund’s notable investments include stakes in companies across various industries, from retail and fast food to pharmaceuticals and financial services. Despite the mixed outcomes of some campaigns, Pershing Square has maintained a significant influence in the hedge fund industry, underscored by Ackman’s reputation as a strategic thinker and a tenacious advocate for value creation. The fund’s performance has seen fluctuations, reflecting the inherent risks of activist investing and the volatility of the markets, but it continues to attract attention for its bold strategies and its impact on the companies it targets.

About Valeant Pharmaceuticals

Valeant Pharmaceuticals International, Inc., now known as Bausch Health Companies Inc., is a multinational specialty pharmaceutical company headquartered in Laval, Quebec, Canada. Valeant focuses on developing, manufacturing, and marketing a diverse portfolio of branded and generic pharmaceuticals, over-the-counter (OTC) drugs, and medical devices across various therapeutic areas. The company operates globally, serving patients and healthcare professionals in over 100 countries. Valeant’s product portfolio includes medications for dermatology, gastrointestinal disorders, ophthalmology, neurology, and other medical conditions. In addition to its pharmaceutical products, Valeant is involved in aesthetic medicine, with a range of dermatological and cosmetic treatments. Over the years, Valeant has faced challenges and controversies, including concerns about drug pricing practices, debt levels, and corporate governance issues. In response, the company has undergone significant restructuring and rebranding efforts, including changing its name to Bausch Health Companies Inc. Despite these challenges, Valeant remains a significant player in the pharmaceutical industry, providing innovative treatments and solutions to patients worldwide.

Want to see more?

Head here to see the rest of the collection:

Hedge Fund Presentations