Bill Ackman's fund is down 19% this year after Valeant cratered
The fund fell 7.3% in October.
Ackman had gone into August up just over 10%. The fund erased all of its gains for the year during that period of volatility.
Most of the losses lately though have come from Ackman's big bet on Valeant Pharmaceuticals, his fund's largest holding. Valeant makes up a percentage of Pershing's portfolio in the "high teens."
On Friday, the last trading day of October, Ackman spent nearly four hours hosting a call defending his Valeant investment.
Ackman has lost more than $1.9 billion on paper after Citron Research, a short-selling firm led by Andrew Left, issued a report two weeks ago asking if the company was running an Enron-like fraud. The stock had already been under pressure after the company was scrutinized for raising the prices for two acquired drugs.
The Citron report, though, focused on Valeant's relationship with Philidor, a specialty pharmacy. Citron has accused Valeant of using Philidor to book "phantom sales."
Valeant has denied those allegations and said it would sever all ties with Philidor.
Ackman said that he expects that Valeant will have to deal with negative press reports and scrutiny from regulators and politicians in the next several months. He also expects that investigations will conclude in four years.
"Life will go on for Valeant. While this has been a very damaging moment for the company ... we think the Valeant business is quite robust." he said.
Ackman thinks the stock is "tremendously undervalued" and that it has an "89% upside." He added that investors are forgetting the "rest of Valeant's business."
(Citron's response to this is that, Valeant's cash flows are declining and it is losing its ability to raise prices on drugs.)
Ackman expects Valeant's share price to be worth $448 in three years. The stock price ended the month down at $93.77, its lowest in more than two years.
The stock was last trading in the premarket on Tuesday at $102 per share.
Other portfolio holdings that Pershing held that fell in October include Platform Specialty Products and Canadian Pacific.
Herbalife, whose stock Ackman has been short for nearly 3 years, rose in October. Herbalife's stock is up 50% year-to-date.
Meanwhile, Mondelez, Restaurant Brands International, Howard Hughes, and Zoetis all climbed in October.
Pershing Square was the best-performing hedge fund in 2014, gaining just over 40%.