In a sense, Bill Ackman and Bruce Berkowitz joined forces again on yet another real estate venture. This was in the news today, from Reuters:
Now where does Bruce Berkowitz fit in the picture? At the end of March 31, 2010, Bruce Berkowitz controls 4,831,055 shares, or 22.81% of the company’s outstanding common shares. Berkowitz has been a board member of the company through March of 2008, when he resigned from the board. At the time, he gave his reason for resignation:
So even though Berkowitz is not directly involved with the Stuyvesant Town Peter/Cooper Village deal, we can see how he indirectly participated in the transaction.
The truth is, this is not the first time Bruce Berkowitz and Bill Ackman work on a real estate transaction in the recent history. Both of them were players in the General Growth Properties (GGP, Financial) through their investment in equity and/or debt
Bill Ackman’s bought into the GGP stocks even before it filed for bankruptcy, insisting there would be value left for the equity holders even the company should go through a reorganization. As pointed out by the Reuters piece, Ackman’s $25 million investment may turn into $1 billion when the company emerge from the bankruptcy.
Berkowitz, on the other hand, through his Fairholme Fund purchased nearly one billion dollars worth of various bonds of the company. His fund too is participating in the company’s reorganization and the investment will earn his shareholders a good return – although we do not know exactly how much he is going to make.
Back to the Stuyvesant Town Peter/Cooper Village deal, we do not know how much of a role the relationship between the two Investment Gurus played in the investment. Berkowitz does not even control Winthrop.
Still, somehow I see a dotted line here.
NEW YORK (Reuters) - Hedge fund investor William Ackman has bought a slice of debt on Stuyvesant Town Peter/Cooper Village and could become the next owner of the sprawling Manhattan apartment complexes.(To read the complete piece at Reuters.com, click here. The article concluded that most likely, Bill Ackman and Winthrop will become the next equity owner of the huge apartment complex.
Ackman's Pershing Square Capital Management LP and Winthrop Realty Trust (FUR ) said on Monday they have formed a joint venture and bought the $300 million first mezzanine loan. The loan is akin to a second mortgage on the property, whose previous owners defaulted on a $3 billion senior mortgage earlier this year.
The joint venture bought the $300 million mezzanine loan for $45 million. Ackman owns 77.5 percent of the joint venture, while Winthrop owns 22.5 percent.
Now where does Bruce Berkowitz fit in the picture? At the end of March 31, 2010, Bruce Berkowitz controls 4,831,055 shares, or 22.81% of the company’s outstanding common shares. Berkowitz has been a board member of the company through March of 2008, when he resigned from the board. At the time, he gave his reason for resignation:
Mr. Berkowitz, a member of the Company's Board since 2000, stated, "Sadly, the growth and relocation of Fairholme Capital Management to Miami no longer allows the time required to be a trustee of Winthrop and other companies. Fairholme and its affiliates will remain a significant shareholder of Winthrop and look forward to a prosperous future with the company."according to this news article. Apparently, Berkowitz’s remained confident in the company as he increased his ownership in the stock in the past year or so:
So even though Berkowitz is not directly involved with the Stuyvesant Town Peter/Cooper Village deal, we can see how he indirectly participated in the transaction.
The truth is, this is not the first time Bruce Berkowitz and Bill Ackman work on a real estate transaction in the recent history. Both of them were players in the General Growth Properties (GGP, Financial) through their investment in equity and/or debt
Bill Ackman’s bought into the GGP stocks even before it filed for bankruptcy, insisting there would be value left for the equity holders even the company should go through a reorganization. As pointed out by the Reuters piece, Ackman’s $25 million investment may turn into $1 billion when the company emerge from the bankruptcy.
Berkowitz, on the other hand, through his Fairholme Fund purchased nearly one billion dollars worth of various bonds of the company. His fund too is participating in the company’s reorganization and the investment will earn his shareholders a good return – although we do not know exactly how much he is going to make.
Back to the Stuyvesant Town Peter/Cooper Village deal, we do not know how much of a role the relationship between the two Investment Gurus played in the investment. Berkowitz does not even control Winthrop.
Still, somehow I see a dotted line here.
