Friday, 19 December 2014
Last updated 2 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.
Dec 1 2014 | 10:21am ET
As 2014 winds down, Northern Trust Hedge Fund Services executives took some time to share their outlook on trends facing the industry in 2015. Read more…
Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.