Bill Ackman Boosts Mortgage Giant Fannie, Freddie
Mortgage giants Fannie Mae and Freddie Mac has sold big stake in the company to Pershing Square Capital Management is an activist hedge fund founded and run by William Ackman.
Rather
than cutting its substantial losses, however, the hedge fund is taking
the swoon as an opportunity—to increase its investment.
Pershing Square’s stake in the two companies has grown to more than 11%, from about 9.8% each.
Fannie
and Freddie shares fell sharply last month after a bipartisan plan to
wind the two companies down and replace them with a new system of
federally-insured mortgage securities that would saddle investors with
more losses. Pershing Square’s losses totaled some $300 million.
Despite
that, Pershing Square founder William Ackman believes that the
likelihood that Fannie and Freddie will disappear is shrinking.
Source: FINalternatives