Carl Icahn Joined Up the Hedge Fund Party for Fannie and FreddieThe Wall Street wolf Carl Icahn has joined William Ackman, an American entrepreneur and investor with extensive experience in the hedge fund industry, in bet on Fannie Mae and Freddie Mac.
Icahn took a $50 million position in Fannie Mae and Feddie Mac in March by buying common stock from Bruce Berkowitz’s Fairholme Funds. Icahn bought 6.8 million shares of Fannie Mae for $4.03 per share and 5.7 million shares of Freddie Mac for $4.04 per share, according to a court document that was reported by The Wall Street Journal and CNBC. Berkowtiz, who bet early and big on Fannie and Freddie, not only gets to book a nice gain on the shares he sold to Icahn, but he potentially also gets an ally in his effort to make outsized gains from his continued large position in both the common and preferred shares of the GSEs.
Disclosure of Icahn’s bet on one of the most politically explosive and controversial investments going comes in the aftermath of reports about a federal insider-trading probe that is looking at Icahn, golfer Phil Mickelson, and the prominent sports better William Walters. All three individuals have denied any wrong doing and the facts surrounding the federal investigation on the surface suggest it could go nowhere. Icahn did not know about the federal insider trading investigation, which is looking at trading in Clorox in 2011, when he bought shares of Fannie Mae and Freddie Mac from Berkowitz.Source: Forbes