Gotham Partners' Ackman Back in Hedge Fund Game

Gotham Partners founder William Ackman continues to lead a charmed life.

After his $300 million Gotham Partners fund was forced to close amid a flurry of investor redemption demands, Ackman's recently incorporated Pershing Square L.P. will be his second act in the hedge fund world, this time with backing from WMAC Investment Corp., a subsidiary of Leucadia Corp. ( LUK).

The Salt Lake City company is the largest backer in Pershing Square L.P., a Delaware-incorporated investment partnership Ackman started at the end of last year, even as his scandal-ridden Gotham fades away from its $300 million peak after a tangle of lawsuits and investigations.

According to a Securities and Exchange Commission filing and a state of New York incorporation document, Pershing Square has raised $54 million to invest in stocks and bonds. An SEC filing lists WMAC Investment as a beneficial owner, Bloomberg first reported.

WMAC Investment Corp. is listed as a unit of Leucadia in SEC filings. The New York company's holdings include about 89.5% of Tulsa, Okla., WilTel Communications, which owns or leases and operates a fiber-optic network for Internet, data, voice and video services. Leucadia also owns American Investment Bank, which makes mobile-home loans, and small-business lender American Investment Financial. Leucadia has a 70% stake in Spanish copper miner MK Gold.

Representatives of WMAC and Leucadia declined to comment on the new hedge fund.

Ackman also declined to comment on his new fund or whether any Gotham investors had signed on for his new venture.

Gotham closed a pair of hedge funds early last year after a New York state court blocked a merger between Gotham Golf Corp., one of the firm's largest holdings, and First Union Real Estate Equity & Mortgage Investments ( FUR). A group of First Union shareholders then sued the fund for $81 million, and settled the case in June. After Gotham walked away from the aborted deal for $11 million, a state appellate court overturned the initial ruling blocking the merger.

New York Attorney General Eliot Spitzer also investigated Gotham's trading and research practices after its enthusiastic recommendation of Pre-Paid Legal Services ( PPD) in 2002. Gotham and Pre-Paid insiders sold off shares just before the stock price dropped sharply. The SEC also started an informal investigation of Gotham, but neither agency reported any findings.

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