Bill Ackman Loads Up on Fannie and Freddie StocksBill Ackman, an American hedge fund manager, philanthropist and the founder and CEO of Pershing Square Capital Management LP, a hedge fund management company, announced it has acquired more shares of Fannie and Freddie during slump.
A number of Bill Ackman’s holdings have been in the news lately, Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) have brought serious damage to hedge funds who had holdings in the GSEs. In the shareholder letter, the hedge fund said that it is not worried about the dismissal of lawsuit in the federal court. In fact, Bill Ackman was so confident about the future of these mortgage giants, that he was buying more shares while others were unloading.
“We believe the U.S. District Court ruling will ultimately be overturned on appeal, and similar lawsuits in other jurisdictions will yield a more favorable outcome. The adverse court ruling resulted in a large decline in Fannie and Freddie’s respective share prices, which we used as an opportunity to purchase additional shares in both companies. We voluntarily withdrew our case in the U.S. District Court and are devoting our legal resources to reversing the Federal Government’s improper seizure of common shareholders’ property by prosecuting our Constitutional takings claims in the U.S. Court of Federal Claims.”
The letter said that this will be prolonged battle and the stock is likely to stay volatile until a consensus resolution is reached. The fund’s exposure to Fannie and Freddie accounts for just 3% of its asset base, which is small considering that Pershing is known for holding large concentrated stakes in companies.Source: ValueWalk