Analyst Who Worked on Herbalife Leaves Pershing Square

An investment analyst who played a leading role in Pershing Square Capital Management’s bet against Herbalife has decided to leave the hedge fund, according to a letter sent to its investors Tuesday evening.

The analyst, Shane Dinneen, is leaving for “areas of his own interest outside of activist investing,” William A. Ackman, the head of Pershing Square, said in the letter. Mr. Dinneen, who joined the hedge fund’s investment team in late 2007, has been publicly singled out for praise by his boss.

Mr. Dinneen performed much of the research underpinning Mr. Ackman’s contention that Herbalife, a nutritional supplements company, is an abusive pyramid scheme. When Mr. Ackman announced a $1 billion short-selling bet against Herbalife in late 2012, Mr. Dinneen appeared on a stage at a hedge fund conference in Manhattan to give a detailed presentation on the company.

“As Shane is one of the most talented investment analysts I have ever worked with and someone I hold in high regard, I have done my best to convince him to stay with the firm,” Mr. Ackman said in the letter, which was reviewed by DealBook.

But Mr. Ackman noted that Mr. Dinneen no longer had a major role with the firm’s bet against Herbalife. Over the past year, Mr. Ackman, along with Roy Katzovicz, the chief legal offer, and David Klafter, the senior counsel, have led an effort to persuade regulators of their point of view.

“As our Herbalife investment has moved from financial analysis to a regulatory and legal execution, Shane has not been leading this investment for some time,” Mr. Ackman said.

Herbalife has denied Mr. Ackman’s assertions. Its stock rose sharply last year, putting pressure on Mr. Ackman’s position.

But one prominent lawmaker, Senator Edward J. Markey of Massachusetts, sent letters to federal regulators last week urging them to investigate Herbalife. “I have seen reports from Massachusetts residents that suggest Herbalife is a pyramid scheme,” Mr. Markey wrote.

In the letter on Tuesday, Mr. Ackman said he was “encouraged by the recent regulatory developments concerning the company.”

In addition to Herbalife, Mr. Dinneen “did superb work” on Pershing Square’s investments in General Growth Properties and Burger King, Mr. Ackman said.

His departure was reported earlier by The New York Post.

“We wish Shane success in his future endeavors and have let him know that we will keep a seat open for him on the investment team if and when he decides to return,” Mr. Ackman said. “Shane intends to remain a meaningful investor in Pershing Square.”