Bill Ackman’s Pershing Square Capital Filed 13D to Discuss Rouse Warrants

Bill Ackman’s Pershing Square Capital filed 13D for its 7.7% activist stake in General Growth Properties Inc. (GGP) on October 24th in respect of its proposed spin-off of Rouse Properties, Inc. (Rouse). Bill Ackman did not make change to his previous 72 million shares position in GGP, but he intended to engage in a discussion with GGP regarding possible changes to the terms of the Warrants, including a possible amendment whereby the warrants would be adjusted into two separate warrants to purchase stock of each of Rouse and GGP. Bill Ackman’s General Growth Properties investment is almost as big as John Paulson’s subprime shorts. In May 2009, he recommended GGP stock at the Ira Sohn Conference and the stock returned more than 1000% since then. As a result of that investment, Ackman had a great 2010, returning 29.7%.

Beside Bill Ackman’s extremely investment in GGP, in total thirteen hedge funds in our list had GGP in their portfolios. Murray Stahl’s Horizon Asset Management had 3.37 million shares; Richard Schimel’s Diamondback Capital had 1.95 million shares; David E Shaw’s D. E. Shaw had 1.81 million shares.

Bill Ackman is a long term value investor, taking advantage of short term downward moves in prices. He is particularly successful at special situations investments. William Ackman’s Pershing Square has a very concentrated portfolio. It is very important because one might be imitating 90% of Ackman’s holdings and getting below market returns while Ackman’s clients enjoy 30% returns.

Per Yahoo! Finance, General Growth Properties, Inc. is a real estate investment trust in the United States. The company is a real estate developer and operator of regional malls. It operates Retail and Other segment, and Master Planned Communities segment. It has interests in approximately 200 regional shopping malls in 43 states. The company was founded in 1986 and is headquartered in Chicago, Illinois.