William Ackman
Encyclopedia
William A. Ackman or commonly known as Bill Ackman (born 11 May 1966, New York) is the major investor, founder and CEO of hedge fund
Pershing Square Capital Management
LP. At one point in December 2007 his funds owned a 10% stake in Target Corporation
, valued at $4.2 billion through the purchase of stock
and derivatives
. His funds now own a 7.8% stake. In December 2010, his funds held a 38% stake in Borders Group
and on December 6, 2010, Ackman indicated that he would finance a buyout of Barnes & Noble
for .
in 1988, and an MBA from Harvard Business School
in 1992.
Gotham Partners mainly invested in non-publicly traded companies and real estate concerns.
, General Growth Properties
, Borders Group
, Fortune Brands
, Ceridian Corp and Alexander & Baldwin
., pressuring the management of those companies to improve profits by selling either real estate assets or corporate divisions. The investment company in turn benefits when the asset liquidation returns capital in the form of dividends and a higher share price, whereby Pershing divests itself of its holdings at a higher share price. In the case of Wendy's International, Wendy's management bought back shares following the forced sale of the their subsidiary Tim Hortons
through an IPO, while Pershing unloaded most of their shares.
side, despite statements from the insurance companies that this would not be a viable option.
He argued that the billions of dollars of CDS
protection MBIA had sold against various mortgage backed CDO
s was going to be a problem. He also argued that it was not proper for MBIA, which was legally restricted from trading in CDS, to instead do it through a second corporation, LaCrosse Financial Products, which MBIA described as an "orphaned transformer." Ackman bought credit default swaps against MBIA corporate debt as a way to bet that it would crash. When MBIA did, in fact, crash as the financial crisis of 2008 came to a head, he sold the swaps for a large profit. Through the years, Ackman attempted to warn regulators, rating agencies and investors about the bond insurers' high risk business models. The story of Ackman's battle with MBIA was turned into a book called Confidence Game (Wiley, 2010) by Bloomberg News reporter Christine Richard.
. The fund fell nearly 90% in 2008 and Ackman apologized for the losses. The fund subsequently rebounded to some extent. Ackman said in a February 2009 letter to investors, “Bottom line, PSIV has been one of the greatest disappointments of my career to date."
Ackman runs Pershing Square as an activist hedge fund, meaning he invests in very few companies and plans to "actively" change them from the inside, by getting a seat(s) on the company's board of directors.
So far investors are confident about Ackman's plans for JCPenney.
Read more: http://www.businessinsider.com/bill-ackman-files-for-activist-stake-in-jcpenney-stock-shoots-up-2010-10#ixzz11mDvBnmX
. Canadian Pacific Railway, also known as CP Rail, is one of two major Canadian railroads.
to preserve Jewish genealogy. In the press release, the Ackman family stated, "We want our children to know, not only their living relatives, but those representing past generations for a greater connection to their family and ancestral origin and heritage."
He married Karen Ann Herskovitz, a landscape architect
, on July 10, 1994. His father is Lawrence Ackman, the chairman of a New York real estate financing firm, Ackman-Ziff Real Estate Group.
Hedge fund
A hedge fund is a private pool of capital actively managed by an investment adviser. Hedge funds are only open for investment to a limited number of accredited or qualified investors who meet criteria set by regulators. These investors can be institutions, such as pension funds, university...
Pershing Square Capital Management
Pershing Square Capital Management
Pershing Square Capital Management is an activist hedge fund founded and run by Bill Ackman located in New York.-Investment History:Pershing has in its history launched activist campaigns against McDonald's and Wendy's....
LP. At one point in December 2007 his funds owned a 10% stake in Target Corporation
Target Corporation
Target Corporation, doing business as Target, is an American retailing company headquartered in Minneapolis, Minnesota. It is the second-largest discount retailer in the United States, behind Walmart. The company is ranked at number 33 on the Fortune 500 and is a component of the Standard & Poor's...
, valued at $4.2 billion through the purchase of stock
Stock
The capital stock of a business entity represents the original capital paid into or invested in the business by its founders. It serves as a security for the creditors of a business since it cannot be withdrawn to the detriment of the creditors...
and derivatives
Derivative (finance)
A derivative instrument is a contract between two parties that specifies conditions—in particular, dates and the resulting values of the underlying variables—under which payments, or payoffs, are to be made between the parties.Under U.S...
. His funds now own a 7.8% stake. In December 2010, his funds held a 38% stake in Borders Group
Borders Group
Borders Group, Inc. was an international book and music retailer based in Ann Arbor, Michigan. The company employed approximately 19,500 throughout the U.S., primarily in its Borders and Waldenbooks stores....
and on December 6, 2010, Ackman indicated that he would finance a buyout of Barnes & Noble
Barnes & Noble
Barnes & Noble, Inc. is the largest book retailer in the United States, operating mainly through its Barnes & Noble Booksellers chain of bookstores headquartered at 122 Fifth Avenue in the Flatiron District in Manhattan in New York City. Barnes & Noble also operated the chain of small B. Dalton...
for .
Early life
Ackman was raised in Chappaqua, NY. He received a Bachelor of Arts degree magna cum laude from Harvard CollegeHarvard College
Harvard College, in Cambridge, Massachusetts, is one of two schools within Harvard University granting undergraduate degrees...
in 1988, and an MBA from Harvard Business School
Harvard Business School
Harvard Business School is the graduate business school of Harvard University in Boston, Massachusetts, United States and is widely recognized as one of the top business schools in the world. The school offers the world's largest full-time MBA program, doctoral programs, and many executive...
in 1992.
Gotham Partners
In 1992, Ackman co-founded Gotham Partners with another Harvard graduate. By 1998, the firm had more than $500M in assets. In 2003, the New York Attorney General investigated whether the firm had engaged in illegal practices for publishing its own research reports on stocks in which it has taken either a long or short position. The litigation concluded that the firm had committed no wrongdoing.Gotham Partners mainly invested in non-publicly traded companies and real estate concerns.
Pershing Square
Ackman's Pershing Square Capital Management has in the recent past acquired positions in Wendy's International Inc., McDonald's Corporation, J.C. PenneyJ.C. Penney
J. C. Penney Company, Inc. is a chain of American mid-range department stores based in Plano, Texas, a suburb north of Dallas. The company operates 1,107 department stores in all 50 U.S. states and Puerto Rico. JCPenney also operates catalog sales merchant offices nationwide in many...
, General Growth Properties
General Growth Properties
General Growth Properties, Inc. is a publicly traded real estate investment trust in the United States. It is based in Chicago, Illinois at 110 North Wacker Drive, a historic building designed by architectural firm Graham, Anderson, Probst & White...
, Borders Group
Borders Group
Borders Group, Inc. was an international book and music retailer based in Ann Arbor, Michigan. The company employed approximately 19,500 throughout the U.S., primarily in its Borders and Waldenbooks stores....
, Fortune Brands
Fortune Brands
Fortune Brands was a holding company founded in 1969 as American Brands and later renamed in 1997 and split apart in 2011. The corporate headquarters was in Deerfield, Illinois in the United States. The company historically had a significant diversity of product offerings...
, Ceridian Corp and Alexander & Baldwin
Alexander & Baldwin
Following World War II, the company entered a new business: land development and real estate. The company formed a new subsidiary, the Kahului Development Co., to develop housing in the Kahului area. In the following years, the company became more involved in the development of its land and the...
., pressuring the management of those companies to improve profits by selling either real estate assets or corporate divisions. The investment company in turn benefits when the asset liquidation returns capital in the form of dividends and a higher share price, whereby Pershing divests itself of its holdings at a higher share price. In the case of Wendy's International, Wendy's management bought back shares following the forced sale of the their subsidiary Tim Hortons
Tim Hortons
Tim Hortons Inc. is a Canadian fast casual restaurant known for its coffee and doughnuts. It is also Canada's largest fast food service with over 3000 stores nationwide. It was founded in 1964 in Hamilton, Ontario, by Canadian hockey player Tim Horton and Jim Charade, after an initial venture in...
through an IPO, while Pershing unloaded most of their shares.
MBIA activities
In 2002, Ackman began research which concentrated on challenging MBIA's AAA rating, despite an ongoing probe of his trading by New York State and federal authorities. He was charged copying fees for copying 725,000 pages of statements regarding the financial services company, in his law firm's compliance with a subpoena. Ackman has called for a division between MBIA's bond insurers' structured finance business and their municipal bond insuranceBond insurance
Bond insurance is a type of insurance whereby an insurance company guarantees scheduled payments of interest and principal on a bond or other security in the event of a payment default by the issuer of the bond or security...
side, despite statements from the insurance companies that this would not be a viable option.
He argued that the billions of dollars of CDS
Credit default swap
A credit default swap is similar to a traditional insurance policy, in as much as it obliges the seller of the CDS to compensate the buyer in the event of loan default...
protection MBIA had sold against various mortgage backed CDO
CDO
CDO may refer to:* Cagayan de Oro, a city that lies along the northern coastline of Mindanao island, Philippines.* Canyon del Oro High School, a public school in Oro Valley, Arizona, USA....
s was going to be a problem. He also argued that it was not proper for MBIA, which was legally restricted from trading in CDS, to instead do it through a second corporation, LaCrosse Financial Products, which MBIA described as an "orphaned transformer." Ackman bought credit default swaps against MBIA corporate debt as a way to bet that it would crash. When MBIA did, in fact, crash as the financial crisis of 2008 came to a head, he sold the swaps for a large profit. Through the years, Ackman attempted to warn regulators, rating agencies and investors about the bond insurers' high risk business models. The story of Ackman's battle with MBIA was turned into a book called Confidence Game (Wiley, 2010) by Bloomberg News reporter Christine Richard.
Target Corporation
Pershing Square IV was established to bet solely on the rise of the stock of Target CorporationTarget Corporation
Target Corporation, doing business as Target, is an American retailing company headquartered in Minneapolis, Minnesota. It is the second-largest discount retailer in the United States, behind Walmart. The company is ranked at number 33 on the Fortune 500 and is a component of the Standard & Poor's...
. The fund fell nearly 90% in 2008 and Ackman apologized for the losses. The fund subsequently rebounded to some extent. Ackman said in a February 2009 letter to investors, “Bottom line, PSIV has been one of the greatest disappointments of my career to date."
JC Penney
Bill Ackman's Pershing Square filed for 16.5% stake holding in JCPenney on 8th Oct 2010Ackman runs Pershing Square as an activist hedge fund, meaning he invests in very few companies and plans to "actively" change them from the inside, by getting a seat(s) on the company's board of directors.
So far investors are confident about Ackman's plans for JCPenney.
Read more: http://www.businessinsider.com/bill-ackman-files-for-activist-stake-in-jcpenney-stock-shoots-up-2010-10#ixzz11mDvBnmX
Canadian Pacific Railway
On October 28, 2011, In a 13D regulatory filing, Pershing Square Capital indicated it owned 12.2% of Canadian Pacific RailwayCanadian Pacific Railway
The Canadian Pacific Railway , formerly also known as CP Rail between 1968 and 1996, is a historic Canadian Class I railway founded in 1881 and now operated by Canadian Pacific Railway Limited, which began operations as legal owner in a corporate restructuring in 2001...
. Canadian Pacific Railway, also known as CP Rail, is one of two major Canadian railroads.
Personal life
In conjunction with other members of the Ackman and Ziff families, William has given to charitable causes such as the Center for Jewish HistoryCenter for Jewish History
The Center for Jewish History is a partnership, or consortium, of five Jewish organizations based in Manhattan. It is a partnership of five organizations of Jewish history, scholarship, and art: the American Jewish Historical Society, the American Sephardi Federation, the Leo Baeck Institute, the...
to preserve Jewish genealogy. In the press release, the Ackman family stated, "We want our children to know, not only their living relatives, but those representing past generations for a greater connection to their family and ancestral origin and heritage."
He married Karen Ann Herskovitz, a landscape architect
Landscape architect
A landscape architect is a person involved in the planning, design and sometimes direction of a landscape, garden, or distinct space. The professional practice is known as landscape architecture....
, on July 10, 1994. His father is Lawrence Ackman, the chairman of a New York real estate financing firm, Ackman-Ziff Real Estate Group.