Pershing Square Doubles Down On Mall Bet

Apr 20 2009 | 9:37am ET

William Ackman’s retail bets haven’t paid off of late, but the Pershing Square Capital Management chief isn’t giving up.

Fresh off of a year in which his hedge fund that invests exclusively in securities of retailer Target Corp. plummeted—it has lost some 90% of its value since its launch two years ago—Ackman is now playing a high-profile role in the bankruptcy of one of the country’s largest mall operator.

Ackman, who pushed General Growth Properties to file for Chapter 11, which it did on Thursday, is expected to join the Chicago-based company’s board of directors, according to GGP’s filing. Pershing Square has committed to providing $375 million in debtor-in-possession financing to the company to allow it to keep running during its bankruptcy proceedings.

In exchange for the financing, Pershing Square will get warrants for some 4.9% of a reorganized GGP’s shares. Pershing Square already owns about 25% of the company, which owns more than 200 malls.

Ackman favored bankruptcy for GGP because he believes its portfolio is worth more than its crushing $27 billion in debt. The company has already defaulted on a number of mortgage loans and corporate bonds.

“Bankruptcy is not just designed for companies that are insolvent,” he said at a recent real-estate investment trust symposium. “Bankruptcy is also designed for companies that are solvent, but have liquidity problems that are due to events outside their control.”

Pershing Square began building its stake in GGP—it is the third-largest shareholder in the company—after its market capitalization fell by more than 90% in the wake of Lehman Brothers’ collapse.


In Depth

Hedge Fund Veteran Peter Borish Talks Trading

Dec 17 2014 | 9:32am ET

Peter Borish says 2014 was “tricky” from a trading perspective. “The best...

Lifestyle

Cohen Donates $1.5M To GOP Governors Association

Dec 10 2014 | 7:13am ET

The Republican Governors Association raised close to $25 million from October 1...

Guest Contributor

Q&A With Daniel Gallancy: Institutional Interest In Bitcoin Is Growing Steadily

Dec 12 2014 | 7:54am ET

Daniel Gallancy is founder and CEO of SolidX, a provider of total return swaps for...

 

Sponsored Content

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

December 2014 Cover

Futures 2014 person of the year

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.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.