Tuesday, 23 September 2014
Last updated 14 hours ago
Jul 15 2008 | 11:03am ET
Activist hedge fund manager William Ackman is taking on one of the biggest turnaround jobs imaginable. The Pershing Square Capital Management chief said he has presented a plan to restructure mortgage giants Fannie Mae and Freddie Mac to Beltway bigwigs, including at the U.S. Treasury Dept., Federal Reserve and Senate Finance Committee.
Ackman told Bloomberg News that, under his plan, “no taxpayer money is used, the hierarchy of claims is respected and no one is being cheated.”
Fannie Mae shareholders might disagree. Ackman has proposed that Fannie raise about $86 billion by giving its holders of some $750 billion in senior unsecured notes debt from a new company at 90 cents on the dollar, with the rest in equity. Owners of the firm’s $11 billion in junior debt would get warrants, but both common and preferred shareholders would get nothing.
“The good news is that Fannie Mae has all the capital that it needs,” Ackman, who made clear he opposes plans for the federal government to provide capital to either firm, told Bloomberg. “It just has the capital in the wrong form, with too much debt and not enough equity.”
But don’t expect Pershing Square to be buying any equity in the firms any time soon. Ackman said his fund has been shorting both stocks since last week, and that he expects them to continue to fall.
Aug 25 2014 | 11:21am ET
As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…
Credit default swaps brought down the London Whale and cost JPMorgan $6.2 billion. Here is how it happened.