Tuesday, 1 December 2015
Last updated 13 hours ago
Jun 10 2010 | 11:36am ET
Last month, William Ackman told us that his hedge fund had bought a $600 million stake in Citigroup. Now, he’s explaining why.
In a letter to investors last week, Ackman said that Citi shares are trading “at a meaningful discount to their fair value.” Continuing his paean to the troubled bank, the Pershing Square Capital Management chief cited “two important elements of Citi that the market does not fully appreciate.”
The first is a $21 billion operating deferred tax asset, which could be used to cut the bank’s future tax liabilities on profits. The second is as much as $30 billion in excess capital, which will be returned to shareholders when Citi finishes selling off or shutting down business it no longer wants.
Still, Ackman acknowledged “a much greater degree of uncertainty” with Citi than with some of Pershing Square’s other holdings.
“That said, we believe the current stock price, capital structure and hidden assets provide a margin of safety, in light of the large potential reward from this investment,” he added.
Oct 21 2015 | 10:41am ET
One of the most unique charity benefits in the hedge fund industry, A Leg To Stand On's (ALTSO's) Hedge Fund Rocktoberfest - NYC, raised nearly $500,000 last Thursday thanks to the generous support of major sponsors and nearly 1,400 attendees from the Tri-State finance, business and hedge fund communities. Read more…