Pershing Square Capital Management
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Date updated:10-12-2008
Pershing Square Capital Management is a $2.4 billion+ activist hedge fund managed by Bill Ackman that has had 40%+ returns over the past 2 years. Ackman cut his teeth in the real estate business, working for his father at commercial real estate mortgage brokerage firm Ackman Brothers & Singer. In 1993, he launched Gotham Partners, eventually growing the hedge fund to over $300 million in assets.
Gotham imploded in 2002 amid a series of lawsuits related to a failed merger between one of the firm's holdings (a court had blocked the merger, but a higher court later overturned the ruling) and investigations by the New York State Attorney General and the Securities and Exchange Commission into the fund's trading and research practices. The investigations yielded no findings, but investor redemptions forced Gotham to close its doors.
Ackman re-emerged in late 2003 with Pershing Square, whose original investors included a subsidiary of Leucadia National Corp. (NYSE: LUK). Over the past two-plus years, Ackman has agitated for change at Wendy's International Inc. (NYSE: WEN) and McDonald's Corp. (NYSE: MCD), helping to force the former to spin off its Tim Hortons Inc. (NYSE: THI) donut chain, and the latter to buy back $1 billion in stock.
In November 2006, Ackman made news when he disclosed that Pershing Square had taken a more than 10% stake in Borders Group Inc. (NYSE: BGP - News), while simultaneously increasing its stake to over 5% in rival Barnes & Noble Inc. (NYSE: BKS - News). In December 2006, he won a battle against Eddie Lampert over Sears Holdings Corporation's (Nasdaq: SHLD) proposed acquisition of Sears Canada. SHLD was able to increase its stake in Sears Canada to 70%, but a minority shareholder group led by Pershing Square scored court and regulatory victories, prohibiting an actual takeover.
In the publication, Nation's Restaurant News, Ackman discussed his interest in restaurant stocks and McDonalds in particular, a stock where he was an activist:
" How did you become interested in restaurant stocks?
It wasn't restaurant stocks, per se, but I got interested in McDonald's after reading a book called "Behind the Golden Arches" eight or nine years ago. I was interested in the company because I am a customer. It is one of the great brands of the world.
One of the things that jumped out at me from the book was how Harry Sonneborn [the chain's first chief executive] considered McDonald's to be a real-estate company. That line made me think about the company in a different way.
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Do you plan to be a long-term shareholder in McDonald's and Wendy's?
It depends on the price. We buy things when they are discounted, and once they reach the potential of what we think they are worth, we sell. It could take months, or it could take years. That is our business.
I don't think there will be one unhappy shareholder at the time that we sell because the stock price is likely to be meaningfully higher than where it is now. As a general matter, we tend to hold things well in excess of a year."
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TGT
Target Cp - $38.11
- +5.45%
- $36.57
% of portfolio: 52%
-
SHLD
Sears Holdings Co - $42.54
- +2.95%
- $41.77
% of portfolio: 29.4%
-
BKS
Barnes & Noble - $18.00
- +3.57%
- $15.66
% of portfolio: 8.5%
-
WEN
Wendys/arby's Grp - $4.92
- +4.90%
- $4.73
% of portfolio: 7.0%
-
BGP
Borders Group Inc - $0.61
- +5.17%
- $0.65
No Analysis added
-
GLRE
Greenlight Capita - $14.38
- +2.86%
- $14.00
No Analysis added
-
CBY
Cadbury Plc - $37.18
- +3.34%
- $35.93
No Analysis added
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William Ackman recently disclosed a 5 million share stake in SHLD.
Story here:
http://13dtracker.blogspot.com/search/label/Pershing%20Square%20Capital