Activist investor William Ackman said on Wednesday that his firm recently bought 150 million shares of Citigroup Inc., but didn't provide his reason or an investment thesis for the purchase.
At the end of his speech at the 15th annual Ira Sohn investment research conference, Ackman said, "And by the way, we bought about 150 million shares of Citigroup, but I don't have time to talk about it."
Ackman is the managing member of Pershing Square Capital Management.
The U.S. Treasury Department said it had completed an earlier 1.5 billion share sale and received gross proceeds of $6.2 billion, leaving it with 6.2 billion Citigroup shares remaining.
That works out to an average share price of $4.13, which implies the government made a profit of $1.325 billion, excluding any commissions or charges. Treasury acquired a total of 7.7 billion Citigroup shares last year at $3.25 apiece.
The government gave the bank $45 billion in bailout money in 2008 and 2009. Citi has paid back $20 billion in preferred shares, but another $25 billion was converted to common stock last year.
Meanwhile, Ackman said on Wednesday that a new model for maligned rating agency business should be created to rid them of "corrupt incentives" for taking part in the issuance of new securities.
Ackman, whose Pershing Square Capital Management shorted insurance rating company MBIA, said it should be illegal for rating agencies to rate new securities and have their access to a company limited to that of investors. He also said they should publish the methodology of how they assign ratings.
These changes would create a new dynamic among the credit rating agencies that is not government-sanctioned, he said.
"A robust market in buy-side research would eliminate the corrupt process," he said. "Investors will have to do their own due diligence," Ackman told the 15th annual Ira Sohn investment research conference.
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