Among the biggest potential winners is William Ackman's Pershing Square Capital Management, which is sitting on a paper profit of more than $800m on investments in the debt and equity of GGP, according to people familiar with Mr Ackman's fund. Other investors that stand to make big profits on holdings in the high-profile retail property owner include Centerbridge Partners, Elliott Associates, Goldman Sachs, John Paulson's Paulson & Co and York Capital, the people said.

 

"General Growth is a fantastic example of the speed with which real-estate finance is coming back," said Bob Steers, co-chairman of real estate investment firm Cohen & Steers, which has not invested in General Growth.

GGP, owner of malls including Boston's Faneuil Hall Marketplace and Honolulu's Ala Moana Center, (Holladays Cottonwood Mall, Murrays Fashion Place Mall, Logans Cache Valley Mall, Ogdens Newgate Mall, Provos Towne Center Mall, St Georges Red Cliffs Mall and thriteen (13) Community Centers in Utah) and filed for Chapter 11 bankruptcy protection in April. It has about $22bn in senior secured debt and $6bn in debt not backed by collateral.

During the darkest days of the financial crisis, the value of GGP's unsecured debt fell below 10 cents on the dollar. That debt has soared to 95 cents as markets have revived amid unprecedented stimulus efforts. Equity in the mall owner, which is traded over the counter, has risen to about $7 a share from less than a dollar.

GGP commanded a market value of about $10bn when Lehman Brothers collapsed in September 2008. Two months later, GGP shares were worth just $100m. The revival of GGP's fortunes is helping to validate the views of investors who reckoned that the company was essentially brought down by a panic in the mortgage-backed securities markets in which it raised financing.

"It is a classic good-company, bad-balance-sheet operation," said Jeff Aronson, co-founder of Centerbridge Partners.

Mr Ackman began accumulating his GGP position in November 2008, said a person familiar with the fund. He spent $50m on stock - priced at under a $1 a share at the time - that is now worth $560m. He invested $100m in unsecured debt now worth $400m. Centerbridge holds $300m in GGP unsecured debt, purchased when it was trading for 30-odd cents on the dollar, a person familiar with the fund said.

Last week, lenders restructured $9bn of GGP commercial mortgage-backed securities. In return for lengthening the maturity of the debt, lenders received fees and tighter documentation. Some analysts believe that GGP could have avoided a bankruptcy filing if it had been able to extend the maturities of its debt earlier.

Simon Property also said last week it hired advisers as it considers a possible bid for GGP. Such a transaction could be valued at up to $30bn if Simon were to bid for all of GGP's holdings, according to a person familiar with the potential deal.

The GGP rally is also certain to stir the debate over whether the Federal Reserve's low-interest rate policy is working - or is instead encouraging the formation of new bubbles in the markets. In last week's Global Data Watch, JPMorgan said: "The recovery trade is largely complete, leaving us in an asset reflation phase."