The "New Olive Garden" debuts across America today, and its roll-out is unlike anything this country's has ever seen.

That's because Wall Street is playing a starring role.

"Once we went on the board every single board member took a night and worked inside the restaurant," said Jeff Smith, CEO of hedge fund Starboard Value in an interview with Bloomberg TV. 

"I was waiting on tables, greeting guests," he said.

This is unlike anything we've ever seen.

Starboard Value is the hedge fund that bought almost 10% of Darden Restaurant Group last fall in order to bring about changes at Olive Garden — it replaced every single person on the company's board and management as well. It started that process by creating a 300 slide deck about what should happen at Olive Garden, including a more disciplined way of serving the company's popular breadsticks.

The presentation was lampooned on late-night TV shows (like the Colbert Report), and in publications that rarely concern themselves with the comings and goings of the masters of the universe. It was clear Main Street was asking itself, 'who are these Wall Street guys messing with our soup and salad situation?'

The correct answer is that these guys have always been poking around in one way or another, it's just that they've never been this visible before. They've never played a starring role in changing an iconic brand right before America's eyes.

Activist investing — when an investors buys a stake in a company to push for changes that (ideally) benefit shareholders — is nothing new. Back in the 1980s they used to call it "corporate raiding." Whatever you call it, what Starboard is doing is an interesting new iteration — introducing America to its friendly neighborhood hedge fund manager.

Can you imagine Bill Ackman folding tee-shirts at a JC Penney so that the display is just right?

Heck no. But perhaps if you did, though maybe his investment would not have been the unmitigated disaster that it eventually was. When Ackman's Pershing Square took control of JC Penney and tried to make it look and feel more like an Apple Store, its core customers rebelled as they noticed their favorite lower-cost brands had disappeared.

It was a full-on routing. The stock collapsed, and Ackman was forced to retreat.

This is where Jeff Smith putting on an apron and taking orders comes in handy.

"When we come to a company usually the answers are inside the company," said Smith. "I'm not a restaurant expert though I do enjoy eating at Olive Garden... I'm there often."

He continued: "One of the changes that's happened since we've been involved... has been to focus on our core guest. There was a movement to try and broaden the menu... and instead we're focusing on the guests that love us."

As for what Darden's management team says about Starboard, it's like they took the words right out of Carl Icahn's mouth (Icahn, unarguably being the Grandaddy of activist investors).

"The brand struggled a bit because we may have been resting on our laurels," said David George, president at Olive Garden, adding, "What Jeff and his team wanted was exactly what we wanted."

Of course, none of this means that there will be no fancy Wall Street touches here. Darden's stock is up 37% since September, when Starboard got involved. But more could be done. After the pasta is salted just right, and the inside of each Olive Garden restaurant looks more like your Italian nonna's kitchen, Starboard may spin out the restaurants into a real estate investment trust (REIT). 

"The business is all about the guest," said Smith. "We're also going to be looking into the real estate opportunity. Primarily because that's something we could do that wouldn't have anything to do with with the restaurant operation."

So you can get your pasta with a side of good ol' fashion American securitization.

Delish.

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It looks as if we now know what the smaller of Bill Ackman's two new investments is.

Forbes reports that Pershing Square Capital, Ackman's $20 billion hedge fund, disclosed a stake in Nomad Holdings, a special-purpose acquisition company (SPAC) that trades on the London Stock Exchange (ticker: NOMHF).

Ackman snapped up a 21.7% stake in Nomad that's worth about $350 million, the report said.

Nomad was cofounded in early 2014 by billionaire fund manager Noam Gottesman and Ackman's friend Martin Franklin, the chairman of Jarden. (Pershing Square talked about Jarden Corp. at the Sohn Conference back in May.)

Shares of Nomad are up 55% since the company went public in September.

In late April, the company said it was acquiring Iglo Foods, the largest frozen-food business in Europe. Ackman said at the Sohn Conference last month that Nomad intended to use its Iglo acquisition "as a base for future food-industry acquisitions."

This isn't the first time Ackman has dabbled in SPACs. It has proved to be a hugely successful investment strategy in the past for Ackman. In February 2011, he disclosed a 30% stake in the cash-shell company Justice Holdings (it traded under the ticker symbol JUSH on the London Stock Exchange).

That investment vehicle was also cofounded by Ackman's buddy Franklin.

Ackman later used Justice Holdings to buy Burger King and returned the burger chain as a publicly traded company listed on the New York Stock Exchange. Last year, Burger King acquired the Canadian coffee and donut chain Tim Hortons. It now trades as Restaurant Brands International.

Last month, during a conference call with Pershing Square Holdings investors, Ackman said his fund had two new investments, one small and one large.

It appears Nomad is definitely the smaller of the two investments.

Ackman said the large one was "approaching 15% of capital." (That would be about $3 billion, according to our calculations.) He also said during that call that it could be "a couple of months before we are required to make a disclosure." (Hedge funds are required to file a disclosure with the Securities and Exchange Commission if they own 5% or more of a company's stock.)

Now here's a chart of Nomad:

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On Wednesday, hedge fund manager John Paulson donated $400 million to endow Harvard's School of Engineering and Applied Sciences, making it the largest gift in the school's history.

Soon after the news broke, the internet exploded with criticism.

The ire really picked up when best-selling author Malcolm Gladwell trashed the billionaire on Twitter.

"It came down to helping the poor or giving the world's richest university $400 [million] it doesn't need. Wise choice John!"Gladwell tweeted.

That initial Tweet was followed by a series of Tweets suggesting Paulson should volunteer at the "[Hermès] store on Madison [Avenue]" or work the "coat check at Art Basel."

But is this a fair criticism?

We spoke to a number to hedge fund folks, and they don't think so. Nearly everyone we spoke with, both on record and anonymously, came to Paulson's defense. 

• T. Boone Pickens, BP Capital:"I was amused by the criticism. My first thought was, hey, wait a minute, get the critic up there and ask, 'Wait a minute, pal, how much have you given?' You may find out he has given, but I have a hard time imagining anyone being critical of a charitable gift."
• Daniel Loeb, Third Point LLC:"Would they criticize him if he just sat on his wealth and 'compounded it' like certain others? It's a fabulous and impactful gift to a great institution. It will lead to discovery, life-saving innovation in biomedical engineering, opportunity, job growth and increased competitiveness in the United States. I don’t see why Malcolm Gladwell or others have a problem with that."
• Bill Ackman, Pershing Square Capital (Harvard/HBS alum):"Here's how I think about it: This money will go to help Harvard build one of the great engineering and science schools in the country. What comes out of that? Great research in biomedicine, software and other sciences, and a large number of talented graduates that will help improve the world. The people who go there aren't likely wealthy people. I'm sure a chunk of his money is going toward scholarships for graduates who will create the next great healthcare or software company that will employee hundreds of thousands of people. The leverage of helping build a great science and engineering school has global implications in a hugely positive way. This is not about subsidizing rich people."
• Anthony Scaramucci, SkyBridge Capital: "Malcolm Gladwell must have sustained some sort of head injury that has lowered his high IQ. That could be the only thing that could explain his tweets. We are very lucky to have people like John Paulson in our society. I would be long a John Paulson and short a basket of Gladwells." 
• Hedge fund manager 1:"Putting capital in the hands of our brightest people has often had great multiplier effects for society as a whole. Think wartime innovations (Penicillin, radar, etc), the Royal Academy during the Enlightenment (Newton, etc.), the Medici (Leonardo da Vinci)."
• Hedge fund manager 2:"Who the f--- can criticize a guy who donated $400 million to his alma mater?!"... What's to criticize? Extremely generous and he is to be applauded. But maybe I'm an idiot. The inmates are running the asylum."
• Hedge fund manager 3: "It's his money, he doesn't have to give it away at all if he doesn't want. Here, he is plainly helping others and society. I can’t imagine criticizing that."
• Marc Andreessen tweeted: "America's research universities are our wellspring of scientific and economic growth. Gifts to them are moral virtues, full stop"

Paulson, a 1980 graduate of Harvard Business School, explained why he made the donation in a speech at the signing ceremony.

"There is nothing more important to improve humanity than education," he said.

"To become a leading school in Engineering and Applied Sciences it is essential that SEAS have a substantial unrestricted endowment to support faculty development, research, scholarships and financial aid."

He continued: "Today will mark the beginning of a new center of engineering and sciences. Harvard's School of Engineering and Applied Sciences will be transformational for Harvard, for Allston, for Boston, for the East Coast, for the United States and for the world."

Harvard actually helped Paulson with his tuition when he was working toward his MBA. He said that Harvard has been instrumental in his success.

"There is no question that the support and education I received at Harvard was critical in helping me achieve success in my career," he said.

What's more is Paulson, like many others in the hedge fund space, comes from humble beginnings. He grew up in a middle-class family in Queens.

Paulson is now the 113th-richest person in the world with an estimated net worth of $11.2 billion.

He launched his hedge fund in 1994 with about $2 million in capital. He shot to fame after making billions betting against subprime during the housing crisis. He now manages close to $20 billion in assets.

He's also one of the top philanthropists in the country. Some of his recent donations include $100 million to the Central Park Conservancy; $20 million to NYU Stern; $22 million to the Children's Hospital in Guayaquil, Ecuador, where his father grew up; $5 million to the Southampton Hospital for the emergency room.

Those are just some of the gifts that are publicly known. Sources who know Paulson said that he makes many donations privately.

"John has been very generous in making anonymous gifts that directly benefit the poor," one source said.

Still, others felt like Gladwell had a right to his opinion, but Paulson also had the right to donate his money.

"I think that guy, Malcolm Gladwell, actually has an argument from a social standpoint," acknowledged one hedge fund portfolio manager. "The disparity of wealth in this country is going to be a problem. The middle class is shrinking. It's harder and harder for people to make it. Gladwell has the right to his opinion, but John Paulson has the right to do what he wants with his money."

He added, Gladwell "is technically part of the 1 percent. What's he doing to help people?"

That's a fair question too.

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Hedge fund titans Bill Ackman, Daniel Loeb, and Carl Icahn are all playing nice these days.

The three high-profile activist investors spoke on a panel hosted by Institutional Shareholder Services (ISS) at the New York Athletic Club in Midtown Manhattan on Thursday evening.

It was the first time all three of them were on a panel together.

A source tells us the three fund managers all "played well in the sandbox." The source added, "They were very polite and complimentary with one another."

The activists' cooperating for the panel was significant because the three had a history of fighting. It wasn't so much the trio fighting among one another, but Loeb and Icahn taking aim at Ackman.

More than two years ago the three were engaged a public and nasty hedge fund war, with the multilevel marketing company Herbalife at the center.

Since December 2012, Ackman has been publicly crusading against Herbalife, which sells weight-loss shakes and vitamins. He believes the company operates as a pyramid scheme, and he is betting more than $1 billion that the stock goes to $0.

After Ackman made his short public, numerous hedge fund managers, most notably Icahn and Loeb, piled on by going long the stock.

A month after going public with the short, Ackman was on CNBC responding to Icahn's criticism. Minutes into the show, Icahn called in and hurled insults on live TV. He said:"I'm telling you he's like a crybaby in the schoolyard. I went to a tough school in Queens you know and they used to beat up the little Jewish boys. He was like one of the little Jewish boys crying that the world is taking advantage of him …"

Ackman and Icahn's feud was legendary, and it lasted more than a decade. It all started with a "forgettable deal" over a real-estate company. Their feud was so notorious that waiters reportedly even knew to never seat them next to each other at Marea, a high-end Italian seafood restaurant on Central Park South. They have since made up though. Last spring, Ackman called Icahn's assistant to forgive him. They later hugged each other onstage at the CNBC "Delivering Alpha" Conference in July. They both said they "respect" each other.

Ackman and Loeb also had a history.

In January 2013, the Third Point CEO disclosed a big stake in Herbalife. Loeb, who is known for his poisonous pen and sharply worded letters, wrote in a letter to his investors that Ackman's thesis lacked "merit" and his pyramid-scheme claim was "preposterous." At the time, Loeb also gave the stock a price target of $55 to $68 a share.

Shortly after, though, Loeb exited the position for a $50 million profit. He sold his stake during a time when the stock was trading below his price target. (The highest the stock hit during that time frame was $46.19 a share.)

According to a Vanity Fair profile, Ackman confronted Loeb about that trade at the magazine's Oscar party that February. Ackman reportedly told Loeb that what he did was "really wrong." Vanity Fair also said the two weren't speaking.

Then, in August 2013, when Herbalife's shares were trading above $61 and Ackman was feeling the heat, Loeb left a taunting message on his Bloomberg terminal clearly for his rival: "New HLF product: The Herbalife Enema, administered by Uncle Carl."Shortly after, Ackman told Andrew Ross Sorkin in a Q&A that Loeb had never been a "close friend."

That's all in the past now. They reconciled last spring over a group dinner after a bank's conference for executives.

It seems the three fund managers are better united. We're told that Thursday's panel discussion was great and that the venue was packed with folks who wanted to see the three of them together.

During the panel, the three fund managers discussed how the activist strategy had changed over the years. For example, in the 1980s, the "greenmail" strategy — a practice in which companies would fend off aggressors by buying back their shares at above the market price— would benefit only the activists at the expense of the other investors. The idea is that nowadays all of the shareholders make money if the activist investor is successful.

All agreed that they would prefer to not have a proxy contest if they could. They also agreed that a lot of boards in the US still comprise retired unengaged members who don't challenge management enough.

There was no discussion of Herbalife.

There was also no mention of the past either. Perhaps it's better that way.

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Short sellers are having a tough time.

The investors, who bet against a company's performance and profit when the company's stock falls, had a heyday in the heat of the financial crisis when stocks were plummeting.

But now, amid record-breaking stock prices, an M&A boom, and companies increasingly buying back stock from shareholders, short sellers are starting to get nervous — and some big names may be turning away from short sellers, The New York Times reports.

Billionaire hedge fund manager Bill Ackman, who two years ago made a $1 billion bet against the weight-loss and nutritional-supplement marketer Herbalife, recently said he would "have to think very, very hard before another public short," adding, "it's not worth the brain damage."

(It's worth noting that his Herbalife short has not paid off yet.)

In an interview with The Times, Ackman said short selling was "an incredibly lonely proposition."

Meanwhile, Jim Chanos, the short seller who made a name for himself by helping expose Enron, is adding a long-only fund to counterbalance his firm's short funds, according to The Times.

Last year, short-biased funds saw $1.3 billion in outflows, according to Hedge Fund Research.

The shift in demand follows a six-year bull market sparked by the Federal Reserve's asset-buying program that pumped trillions of dollars into the market and boosted investor confidence.

Not everyone is getting out of short selling, though: Hedge funder Whitney Tilson has been publicly shorting the flooring company Lumber Liquidators this year. The stock is down 80% since he went short.

Read the full story in The New York Times »

SEE ALSO: ACKMAN: Short selling is 'not worth the brain damage'

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Activist investor Bill Ackman, CEO of the $18 billion hedge fund Pershing Square Capital Management, says the most interesting investments in his portfolio right now are the mortgage originators Fannie Mae and Freddie Mac.

The 49-year-old activist investor was on a panel on Wednesday with fellow activist investor Nelson Peltz, a friend of Ackman's and CEO of Trian Fund Management, at the CNBC/Institutional Investor Delivering Alpha Conference at the Pierre Hotel in New York.

"Mad Money" host Jim Cramer asked the pair for their single best idea.

Ackman said his was Fannie and Freddie but "no one has really noticed." By the way, he presented on Fannie and Freddie at the Sohn Conference in 2014. At that time, Ackman said he saw the stock price ranging from $23 to $47 in the future.

According to Ackman, this investment offered "the most upside and, well, probably has the most downside of anything we own.

"The downside outcome is very unlikely," he added.

Fannie and Freddie needed massive bailouts amid the financial crisis and were taken over by the government. As a shareholder, Ackman thinks the government will eventually move toward a less regulated Fannie and Freddie.

He did acknowledge, though, that there was a "lot of risk" in the trade.

Peltz said he had two new positions that account for one-third of Trian's portfolio, but he was not ready to announce them. He gave some hints, though. One is industrial, and the other hasn't been categorized yet.

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Hedge fund titan Bill Ackman, the CEO of Pershing Square Capital, participated in a panel at the CNBC Delivering Alpha Conference on Wednesday, and he explained why he doesn't invest in tech companies.

"We like businesses that will withstand the test of time," Ackman said, adding that tech companies were "too dynamic."

The 49-year-old investor is known for typically being a long-only activist investor, taking large positions in a handful of large "undermanaged" companies and advocating changes by management. He also likes "predictable" businesses.

Pershing's portfolio includes positions in Valeant, Actavis, Zoetis, Restaurant Brands (Burger King), and Canadian Pacific, just to mention a few. He has previously invested in retail stocks as well as restaurant stocks.

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Activist titans Nelson Peltz of Trian Fund Management and Bill Ackman of Pershing Square weighed in on how to fix McDonald's.

The largest global fast-food chain has struggled in recent years, especially in the US. 

At the CNBC/Institutional Investor Delivering Alpha Conference, "Mad Money" host Jim Cramer asked the two hedge fund billionaires if they could fix McDonald's.

"Well, I'm chairman of Wendy's, so I don't want to give them too many tips one what needs to be done," Peltz said, adding, "If I wasn't in Wendy's, if I wasn't in Wendy's and didn't have a strong feeling for management and the board, McDonald's might be a place we would go."

Cramer asked Peltz why he would invest in McDonald's in that scenario. 

"I think it's balance sheet clearly, and huge amounts of points of distribution."

Peltz pointed out that things need to change at McDonald's, and that could take a long time.

"But the culture and the mindset at that company has to be turned upside down. And I don't know if they have the stomach to do it because it's going to take a lot of quarters or maybe a lot of years to get that thing righted. And I don't know that shareholders are going to be patient enough." 

Ackman explained that a decade ago, his fund approached McDonald's with a plan to adopt a model of re-franchising its stores. Part of Ackman's plan was for McDonald's to keep a small test group of stores.

"And they sort of turned us down, but they took some steps in that direction." 

 Five years ago, private equity firm 3G Capital reached out to Ackman about taking Burger King private. Ackman said that 3G wanted to use part of his plan from McDonald's and implement it for Burger King.  

"Now, burger King was in a much worse place than McDonald's is today. A store base that's disaster. You had same-store sales that had gone down every year. They had had 13 CEOs I think in the 25 previous years," Ackman said. "But it was in, I don't know, 60, 70 countries. And the best businesses are ones where if they have been run poorly and had 13 CEOs in 25 years and they still exist, that tells you something." 

It's been a great investment for Ackman and 3G. 

"So in five years, they have taken Burger King from worst. It's on its way to being best in this space."

Ackman first disclosed his stake Burger King in June 2012. He used his cash-shell company Justice Holdings to buy Burger King and then returned the burger chain as a publicly-traded company listed on the New York Stock Exchange.

In 2014, Ackman was the best performing hedge fund manager racking up a 40% return. One of his big winners was Burger King. That investment has earned his fund millions. Pershing Square last held over 38 million shares in Restaurant Brands International–the newly formed fast-food chain operator that runs Burger King and Tim Horton's (they merged). Shares of Restaurant Brands are up 15% since its debut. 

Ackman is known for being a mostly long-only investor who takes large activist stakes in a handful of "under-managed" companies with predictable businesses. 

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China’s stock market has been the talk of investors, along with Greece, for the best part of 2015. The rapid rally that began midway through last year, something that saw the benchmark Shanghai Composite rally more than 150% in just 9 months, fascinated markets.

Then in mid-June the rally stopped and was savaged, losing more than 30% in just a few short weeks.

Not only has it captured the imagination of investors, it also raised serious concerns about the trajectory the market was on as well as the broader Chinese economy.

Encouraged by the government, inexperienced investors poured into stocks, some using leverage, like a mob who had just been provided with the winning Lotto numbers a day early. Pushing aside fundamentals, it was not a case of whether you should buy, but simply how much.

That raised more than a few eyebrows, particularly from seasoned investors who’ve seen similar bubbles come and go in China and elsewhere.

This sentiment is no better expressed than in a recent Bloomberg article where three well-known asset managers – Paul Singer from Elliott Management, Bill Ackman from Pershing Square Capital Management and Jeffrey Gundlach of DoubleLine Capital – reflect the concerns many have expressed when it comes to China’s bubbly stock market.

Speaking at the CNBC Institutional Investor Delivering Alpha Conference in New York, Singer told the audience that a potential debt-fuelled stock market crash in China “may be way bigger than subprime."

Ackman, speaking at the same conference, suggested that compared to Greece, China “is a bigger global threat by far”, adding “if you look at the Chinese financial system, you look at shadow banking, you look at the amount of leverage, you look at how desperately they worked to keep the stock market up. It looks worse to me than 2007 in the US.”

Indeed, that sentiment was echoed by Jeffrey Gundlach who, in an interview with CNBC that coincided with the conference, noted that “China is really kind of concerning”, suggesting the nation’s stock market is “far too volatile and murky to invest in.”

These are not just ordinary investors – they manage tens of billions of dollars between them – and they’re unconvinced of the merits of investing in China’s markets.

Many may disagree, and they may end up being wrong, but who would you rather listen to for financial advice? Guys with some serious skin in the game or a state-run Chinese media outlet?

You can read more here.

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We've heard that hedge fund titan Bill Ackman wants to put a tennis court on the roof of Pershing Square Capital's new office building.

This month, Ackman and commercial real-estate firm The Georgetown Company purchased an old Ford dealership building on Manhattan's far West Side for more than $250 million, Commercial Observer reported.

The historic 464,000-square-foot car dealership building will be Pershing Square Capital's new home.

The building is located at 787 11th Avenue on between 54th and 55th streets, which is a pretty big hike from the rest of the hedge funds in Midtown Manhattan. It's located near a park and it offers fantastic views of the Hudson River. 

Pershing Square employs around 70 people. They currently occupy about 31,000 square feet at 888 Seventh Avenue. Other tenants will likely occupy the building too.

The Georgetown Company, Pershing Square's partner in the transaction, is also the same real estate firm that developed the stunning IAC Building on Manhattan's West Side. We can only imagine what they will do with the property. 

Multiple people have told us a tennis court is in the works. Sounds awesome. 

Ackman grew up playing tennis with his family in Chappaqua, New York. He played tennis in high school at Horace Greeley in the 1980s. In college at Harvard, Ackman put down his racquet and rowed crew instead.

Ackman returned to the tennis world after investment banker Jeff Appel, a current and former top ranked player for his age group, sent the investor an unsolicited email in 2005 inviting him to play with his Wall Street tennis crew. He showed up.

Since then, Ackman has become extremely passionate about his tennis. He's consistently improved. 

"It's amazing how Bill keeps improving. He plays as if he played Division I tennis," Appel, who is called the "Mayor of New York tennis," told Business Insider. 

These days, Ackman frequently plays in charity tournaments, and donates significant amounts of money to various causes supported by the Wall Street tennis community. He also sponsors 17-year-old tennis phenom Francis Tiafoe. Ackman and Appel were both guests of Tiafoe's when he played in the main draw of the French Open this May. 

Here's a map of where the new office will be located: 

Here's a Google Street View version: 

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A federal judge has dismissed a lawsuit accusing Herbalife Ltd and its CEO of misrepresenting the weight-loss and nutritional product maker's sales practices as legitimate when the company was "at its core" a pyramid scheme.

US District Judge Dale Fischer in Los Angeles, who dismissed a version of the complaint in March, said on Tuesday the Oklahoma Firefighters Pension and Retirement System did not show the defendants defrauded shareholders by concealing the company's inability to track retail sales.

The judge also said CEO Michael Johnson's reducing his Herbalife stake by a net 12% over roughly one year, while "undeniably large," did not raise suspicions, nor did disclosures that top executives expected "some form of disciplinary action" over the company's business practices.

"Herbalife openly disclosed that it was susceptible to legal challenge precisely because its practices occupy the gray area between legitimate multilevel marketing company and illegal pyramid scheme," Fischer wrote.

The lawsuit seeks class-action status from February 23, 2011, and March 10, 2014. Fischer said the plaintiff may file an amended complaint by August 27.

"We are disappointed with the ruling and will determine our next steps after consultation with the client," Maya Saxena, a lawyer for the Oklahoma fund, said in an email on Wednesday.

Herbalife did not immediately respond to requests for comment about the ruling. It has denied wrongdoing.

A pyramid scheme often occurs when participants earn more money by recruiting others to sell products than by selling the products.

Billionaire hedge fund manager William Ackman has also accused Herbalife of being a pyramid scheme. He said in December 2012 that his firm, Pershing Square Capital Management LP, had made a $1 billion bet against the Los Angeles-based Herbalife.

In May, another federal judge granted final approval to Herbalife's $15 million settlement with distributors who said the company misled them.

Herbalife shares added 0.1% to $50.66 in Wednesday trading, and remained above levels at the time Ackman revealed his short bet.

The case is In re: Herbalife Ltd Securities Litigation, US District Court, Central District of California, No. 14-02850. 

(Reporting by Jonathan Stempel in New York; Editing by Jeffrey Benkoe)

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Bill Ackman has taken a $5.5 billion position in the snack-food company Mondelez, according to The Wall Street Journal.

According to The Journal, Ackman has amassed a 7.5% stake in the company when options contracts are included, and this stake could be revealed as soon as Thursday morning.

Ackman runs the $20 billion hedge fund Pershing Square.

The Journal notes that were Ackman to push for a sale of Mondelez, its market cap of over $70 billion most likely provides few suitors.

Among companies floated by The Journal, however, are Kraft Heinz, which recently completed a merger and is owned by 3G Capital and Warren Buffett's Berkshire Hathaway.

Ackman invests with 3G, but The Journal reports that he did not discuss this position with 3G ahead of time.

As Business Insider's Julia La Roche reported back in June, Ackman said earlier this year that Pershing Square had made two new investments: one large and one small.

A Forbes report said Ackman had taken a stake in Nomad Holdings, a special-purpose acquisition company that trades on the London Stock Exchange. Pershing's stake in Nomad was worth around $350 million, almost definitely making it the smaller of Pershing's two new investments.

And now it appears this Mondelez stake is the big one.

Read the full report at WSJ.com here »

SEE ALSO: Why Bill Ackman doesn't buy tech companies

SEE ALSO: Hedge fund investor Dan Loeb just picked his newest target

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Activist investor Bill Ackman has made the food and beverage multinational Mondelez International his newest target.

The hedge fund manager is likely to push for the company to cut costs or sell itself to a rival, according to The Wall Street Journal.  

One potential suitor is the recently-merged Kraft Heinz company — now the fifth-largest food company in the world.

The merger of Kraft and Heinz was orchestrated by 3G Capital, which is helmed by Brazilian billionaire Jorge Lemann, and Warren Buffett's Berkshire Hathaway.

Ackman himself is an investor in 3G's funds.

The private-equity firm has wasted little time in shaking up the upper ranks of the newly-combined company, and has a reputation for savage cost-cutting.

Lemann, a Swiss-Brazilian, has gone from journalist to national tennis champion to banker and now billionaire investor. Buffett likes to call him, "Georgie Paolo."

"Money is simply a way of measuring if the business is going well or not, but money in and of itself doesn't fascinate me," Lemann said in January 2008, according to an interview published in HSM Management magazine.

Shows you that he's just in it for the love of the game.

Lemann was born in Rio de Janeiro in 1939. His father was a Swiss businessman who immigrated to Brazil in the 1920s.

He left Brazil to attend Harvard, earning his bachelor's degree in economics in 1961. Lemann still has a great relationship with Harvard, helping Brazilian students study there and setting up scholarships.

After Harvard, Lemann's life was a mixed bag. He trained at Credit Suisse for a while and worked as a journalist at Brazil's third-oldest paper, Jornal do Brasil.

Warren Buffett — billionaire investor, philanthropist, Bill Ackman dream crusher.

Last week the Wall Street Journal reported that Ackman's hedge fund, Pershing Square, had taken a $5.5 billion stake in Mondelez, the snack company behind Oreo's and Ritz crackers with a $74.8 billion market cap.

According to the report, Pershing would likely try to sell Mondelez to an even bigger food company — like Buffett-owned Kraft Heinz — or slash costs in a big way. 

Of course, for that to happen Kraft Heinz would have to agree to buy Mondelez, which Kraft spun out in 2012.

Unfortunately for Ackman, however, it looks like Buffett is not into the idea. Buffett said in an interview with CNBC on Monday morning that he thinks Kraft Heinz isn't likely to buy something as expensive as Mondelez.

“At Kraft Heinz, we have our work cut out for us for a couple of years,” Buffett said. “Frankly, most of the food companies sell at prices that it would be very hard for us to make a deal even if we had done all the work needed at Kraft Heinz.”

Bummer.

There is another activist hedge fund with a big stake in Mondelez — Nelson Peltz's Trian Partners. That fund was agitating for Mondelez to sell itself to Pepsi for over a year. Pepsi, however, wouldn't bite.

Who knows if they'll find a buyer for this thing.

SEE ALSO: This Brazilian billionaire could make or break Bill Ackman's latest big investment

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Activist investor Bill Ackman, the CEO of the $18 billion hedge fund Pershing Square Capital Management, threw shade at the Wall Street Journal during a conference call with investors on Monday.

During the Q&A portion of the call, Ackman said that he loves the Wall Street Journal and that he reads it every day. However, he thinks that the "Heard On The Street" section has the "most factually inaccurate" and "frankly embarrassing" articles about Fannie Mae and Freddie Mac. He called the section's coverage a "disaster."

Ackman is a shareholder of Fannie Mae and Freddie Mac, and thinks with the right reforms - like eliminating some lines of business - they could be worth much more. Heard on the Street columnist John Carney (a former Business Insider editor) has written several times this year that the companies aren't living up to those hopes. 

"It will likely take a few more quarters before reality seeps into the valuation models of fund managers dreaming of a Fannie windfall," he wrote in a May column after Fannie Mae's quarterly results.

So far, Carney's been proven right. Fannie Mae and Freddie Mac's shares are down 40% over the past year -- and still far from the $23 to $47 a share that Ackman has predicted they could reach. 

Still, Ackman said he thinks Carney's the one getting it wrong.

"I may put together a binder to help them on basic math," he said.

By the way, that would probably be a monstrous binder. Ackman has a reputation for delivering insanely long presentations at conferences. 

Carney didn't comment beyond a tweet noting Ackman's comments.

Called an "embarrassment" by a billionaire. So does this make me the @megynkelly of financial journalism? #pershingsquare$fnma

— John Carney (@carney) August 10, 2015

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It's August and kids are starting to head back to school.

Before they were masters of the universe, the biggest names on Wall Street were once just regular high-school kids, too.

They were members of sports and academic teams. They entered essay contests, edited the school's literary magazine, and starred in musicals.

We combed through a number of high-school yearbooks and have compiled photos and accomplishments of some of the Street's most recognizable names. Some of them still look the same, while others have drastically improved their hairdos.

We even found Goldman's CEO Lloyd Blankfein in his swim trunks. Enjoy!

In the 1947 Woodrow Wilson High School yearbook, Warren Buffett said he wanted to be a stock broker.

His top lieutenant, Berkshire Hathaway Vice Chairman Charlie Munger, was in the ROTC and a member of the boys' rifle team at Central High School in Omaha, Nebraska.

Energy tycoon T. Boone Pickens played basketball at Amarillo High School in the 1940s.

There is a big name in activist investing that has been involved in more than 50 campaigns so far this year.

It isn't Pershing Square, Icahn Associates, or Third Point. You've probably never heard of it.

It's Wall Street law firm Olshan Frome Wolosky LLP.

The firm is the go-to legal adviser for many of Wall Street's biggest and most successful activists.

It has worked for clients including Jeffrey Smith's Starboard Value LP, along with Lone Star Value Management and Glenn Welling's Engaged Capital LLC.

The more than 50 activist campaigns the law firm advised on so far in 2015 is equivalent to 22% of all campaigns, according to FactSet data.

That puts Olshan ahead of the next seven law firms by market share — combined.

The law firm's activity in activism appears to be growing as the strategy is becoming increasingly popular with investors.

Steven Wolosky, a partner and chair of the activist- and equity-investment practice at Olshan, told Business Insider that most of his clients are focused on operational activism rather than turning a quick buck.

Activists are now acting almost like private equity firms, performing diligence on a deal and looking to market their viewpoints to institutional investors, he said.

"It's beyond the performance of the company," said Wolosky. "It's beyond the CEO's performance."

The rise in activism has placed a premium on legal expertise. Hedge funds and big banks alike are eager to bring experts into their ranks to ready defenses in increasingly costly campaigns to control boards' independence.

Ex-activist lawyer David Rosewater was recently hired to head Morgan Stanley's activism defense practice, and another ex-lawyer teamed up with a former JPMorgan executive to launch an activist fund focused on collaborative management earlier this year.

And Bill Ackman's Pershing Square Capital fund hired ex-Kirkland & Ellis lawyer Stephen Fraidin in January after the M&A pro spent more than a decade on the hedge fund's advisory board.

Olshan's dominance comes at a crucial time for activist investing. There is more cash than ever being put to work in the strategy.

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Pershing Square Holdings, the $7.4 billion publicly traded vehicle led by Bill Ackman, has erased all its gains in a matter of weeks and is down for the year.

Ackman said in an investor update:

"However there has been significant volatility in the investment markets over the past few weeks, largely driven by the decline of the Chinese stock markets, and the fear that slowing growth in China will have repercussions for businesses around the world.

"At the date of this report, the year to date investment performance has been erased, and the Company is at a loss position for the year."

Pershing Square Holdings had been up 10.1% through the end of July, the letter said.

During the first half of the year, the fund returned 3.2% net of fees. In July, the fund gained 6.6%.

Markets have gotten have gotten clobbered in the last week. On Monday, the Volatility Index (VIX), a key measure of fear in the market, hit its highest level since 2009.

Ackman, 49, is known for typically being a long-only activist investor, taking large positions in a handful of companies.

Some of the companies in the portfolio include Allergan, Valeant Pharmaceuticals, Actavis, Nomad Foods, Canadian Pacific Railway, Mondelez, Air Products & Chemicals, Zoetis, The Howard Hughes Corporation, Platform Specialty Products.

Ackman is also massively short Herbalife, a multilevel-marketing company that he believes is a "pyramid scheme."

In the letter, Ackman said that he does not believe they will have to exit those investments.

"As a result of our investment principles and the resulting composition of the portfolio, we do not believe that stock market and commodity price declines, currency devaluation, and/or economic weakness in China will have a material impact on the intrinsic value of the portfolio," Ackman wrote.

"While stocks can trade at any price in the short term, because we do not use margin leverage, we will not be forced out of any investment at an inopportune time," he added. "As a result, we have made no meaningful recent changes to our current portfolio holdings other than the addition of greater notional short currency exposure principally through the purchase of put options."

In 2014, Ackman was one of the best-performing hedge fund managers, gaining about 40% compared to the S&P 500's 13% rise.

Pershing Square Holdings' stock fell $0.66, or -2.79%, to end the day at $24.80 per share. Shares of Pershing Square Holdings have fallen more than 9% since the beginning of August.

Here's a chart of Pershing Square Holdings since it IPO'd last October:

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We knew Pershing Square Holdings' performance had faltered in August. Now we know by how much.

The publicly traded vehicle led by Bill Ackman wiped out all of its gains for the year and fell into the red in August.

According to an update, the fund fell 13.1% during the month of August and was down 4.3% for the year as of Tuesday.

It has been a volatile week in the markets. With Thursday's close, the S&P became positive for the week after tanking earlier.

Ackman holds large positions in a handful of publicly traded companies. In an investor update, he said Pershing wouldn't be forced to sell out of those stocks.

It's possible Ackman could have made back some of those losses. The next update comes out next week.

Pershing Square Holdings had been up 10.1% through the end of July.

Ackman wrote that all gains for the year had been erased because of "significant volatility in the investment markets over the past few weeks, largely driven by the decline of the Chinese stock markets, and the fear that slowing growth in China will have repercussions for businesses around the world."

In 2014, Ackman was one of the best-performing hedge fund managers, gaining about 40%, compared with the S&P 500's 13% rise.

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Activist investors are putting cash to work like never before, setting their sights on bigger targets and extracting enormous paydays from companies once thought untouchable. 

They’re awash with cash, as investors in search of returns in a low-interest rate environment pump cash in to the strategy.

Some of the boldface names of activist investing have made billions this year alone.

Business Insider takes a look back at some of the most successful plays by activist investors in recent memory. 

Carl Icahn & Icahn Enterprises pushed Tim Cook to cut a bigger dividend check

Icahn has made an expected $5 billion off two trades: Apple and Netflix. Apple was his activist play, with Icahn earlier this year elbowing CEO Tim Cook to use some of the company’s cash holdings of nearly $200 billion to do buybacks. That earned Icahn Enterprises a reported $3.4 billion profit on Apple. 

Bill Ackman & Pershing Square Management lost and still won

Pershing Square Capital last year bought nearly 10% of Botox maker Allergan and tried to push the company in to a sale to Valeant to earn a quick buck. New Jersey-based competitor Actavis stepped in with a $219 per share bid. That was nearly double what Ackman spent to invest in Allergan. Pershing bagged a $2.6 billion profit on the transaction, according to a New York Times report.

Jeffrey Smith & Starboard Value bagged $200 million in paper gains on Darden

Jeff Smith spun Starboard out of Cowen Group in 2011, and has already racked up plenty of wins and some impressive returns. The fund took a stake in Darden Restaurants at an average of $51.03 a share back in 2013. He succeeded in replacing the entire board last year. By the end of trading Thursday the stock stood at $68.85. Starboard holds more than 11.6 million shares of the stock, giving the firm a paper gain of about $200 million. Smith and Starboard are now shaking up retailer Macy’s. 

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