Carl Icahn at the 6th annual CNBC Institutional Investor Delivering Alpha Conference on September 13, 2016.
Heidi Gutman | CNBC
Billionaire investor Carl Icahn is placing a $400 million bet against struggling malls, taking on two of the largest investment firms, according to a report in the Wall Street Journal.
Icahn stands to make millions if mall owners are unable to pay off their debts, people familiar with the matter told the Journal. Icahn has placed his bet in recent months and suffered early losses, sources told the publication.
Traders in market told the Journal that Icahn “likely is the largest short seller of mall debt.”
His trades have pitted him against Putnam Investments and AllianceBernstein Holding LP, two of the largest money managers, according to the report. Both are more upbeat on their outlook on malls.
Dan McNamara, a principal at MP Securitized Credit Partners, a New York hedge fund, told the Journal it was “the biggest battle in the mortgage bond market today.”
The nationwide shuttering of stores such as Dressbarn, CVS and Pier 1 this year signals more bad news for U.S. mall owners, which have already been struggling with traffic to department stores, their anchor tenants, largely on the demise. So these mall owners are having to get creative, bringing in more food options, and even apartments and office spaces, to their properties.
– CNBC’s Lauren Thomas contributed to this reporting.