The well-known US hedge fund investment manager William Ackman said that he has taken a short position in shares of the largest US mall owner Simon Properties Group Inc.(SPG.N) This position was taken as a hedge against his investment in other retail real estate companies, including General Growth Properties Inc (GGP.N).

While he remains long GGP, he remarked at a recent symposium that if he finds a better investment opportunity it will be the first position he gets rid of. Ackman's Pershing Square Capital Management LP owns about 14% of GGP currently, and he also has a 25% stake in the Howard Hughes Corp (HHC.N) which was a spin off of GGP after that company emerged from bankruptcy protection. The discrepancy between the price of GGP and SPG shares is huge, with shares of SGP trading at $106 compared to GGP trading at $15 recently.

A recent survey released by Citi Prime Finance has concluded that Institutional fund managers have initiated a sudden change to direct hedge fund investing due to the financial crisis going on all over the world. This survey was conducted among 60 major investors representing $1.7 trillion and hedge fund managers having $186 billion under management.
It shows that sovereign wealth funds have not only been increasing their hedge fund investment programs, but also contributing to hedge fund instead of using traditional funds. The survey found that hedge fund running between $1 billion and $5 billion experienced the largest net growth in 2010. Sandy Kaul, U.S. head of business advisory services, was in the opinion that "They see a distribution above $5 billion in the industry among hedge fund managers.

International hedge funds are poring over a list of 14 local real estate investment trust sector (REITS) that are trading below net tangible asset waiting to attack them. In the past few months, hedge funds have been following closely REITs they have tagged as potential money spinners for overseas property sales or to arbitrage the share price against the realizable value of the trust .

While hedge funds are a long way from their glory days, those with strong balance sheets are expected to use the next phase of the listed property trust cycle to make money by taking advantage of low share prices. There was a suggestion that a few hedge funds had already started buying shares but are yet to declare their hand. Last year, hedge funds Appaloosa Management and Paulson & Co waded into the distressed debt sector buying $18.6 billion of Centro Properties Group's distressed debt.