CORRECTED-UPDATE 1-Ackman's Pershing Square posts losses again in May

(Corrects paragraph 10 to 2.2 pct of all assets, instead of
assets that can be redeemed)
By Svea Herbst-Bayliss
BOSTON, June 1 (Reuters) - Billionaire investor William
Ackman's Pershing Square (NYSE:SQ) Holdings hedge fund posted losses in
May, widening its year-to-date losses to 18.6 percent, an
investor in the fund said, in results that reinforce how some of
the industry's biggest stars are facing a rough patch.
Pershing Square Holdings had a May loss of 0.7 percent,
following a gain of 10.2 percent in April that had helped shrink
the loss for the first four months to 18 percent, an investor in
the fund said. In the first quarter, Pershing Square Holdings
lost 25.6 percent, one of the industry's worst returns.
Other private Pershing Square portfolios, which use less
leverage than Pershing Square Holdings, are down roughly 15
percent for the year to date, a person familiar with the funds
said.
Ongoing losses have prompted the firm, whose assets under
management are down by about 40 percent from a year ago to $12.3
billion, to tell investors that it expects redemptions for the
second quarter to be higher than in recent quarters, two people
familiar with the matter said.
This year's losses follow a 20.5 percent drop in 2015, which
followed a winning 2014 when Pershing Square ranked as one of
the hedge fund industry's best performers with a roughly 40
percent gain.
Ackman's chief troubles this year are the same as last: bets
that shares of drug company Valeant VRX.TO will climb and
shares of nutrition company Herbalife's HLF.N will fall.
Ackman joined Valeant's board this year and helped pick a new
chief executive.
Other funds have also struggled this year. Barry Rosenstein,
often among the first to report monthly numbers, on Tuesday told
investors that his Jana Partners fund is off 4.7 percent this
year after gaining 2.4 percent last month. David Einhorn's
Greenlight Capital fell 1.9 percent in May but is up 1.1 percent
this year, according to data provided to Reuters by sources.
The depth and prolonged period of Ackman's declines,
however, stand out in the industry and have made some investors
uneasy, several said. Ackman has been spending time visiting
clients in the last months to explain his vision for the fund in
greater and more personal detail.
With investors generally souring on hedge funds - $14
billion in assets were pulled in the first quarter alone,
according to data from Preqin - Pershing Square is one fund that
may see more substantial redemptions in the months ahead,
investors said.
Pershing Square allows most clients to pull only one-eighth
of their money per quarter, which means it would take two full
years to exit Pershing Square completely.
Historically, quarterly redemptions have averaged 2.2
percent of assets. At the start of this year, that number was
lower, with investors asking for only about 2 percent back, two
people said.
But that number is expected to be higher in the second
quarter.
To get money out by the end of June, investors had to notify
Pershing Square by April 29, though they may still change their
minds and withdraw redemption notices, making it unclear how
much money will be pulled in the second quarter.
A year ago Pershing Square managed $19.7 billion. The firm's
structure includes permanent capital at one of its portfolios
plus employee capital and a public bond issue which assure that
assets cannot drop to zero.