Activist investor, controversial figure, and founder of Gotham (the fund, not Batman’s city), Bill Ackman is a constant presence in the media, one way or another. A public face in the venture capital industry, he commands a $9.1 billion fortune, according to Forbes, and has built a legacy through high-profile investments. His biography is essential reading for anyone interested in management and global markets. But who is Bill Ackman?
William “Bill” Albert Ackman was born in 1966, in Chappaqua, New York. After earning his undergraduate degree from Harvard College and completing an MBA within the same university, HBS, Ackman started a remarkable career in finance.
In 1992, alongside with a university colleague, Ackman co-founded Gotham Partners, an investment firm that managed public and private equity hedge funds. However, it was in 2004, with the start of Pershing Square Capital Management, that he truly made his mark. Known for his activist investment approach, Ackman has built a reputation for taking significant positions in companies and advocating for strategic changes.
In that sense, one of Ackman’s most notable successes was his investment in General Growth Properties (GGP) during the financial crisis. In 2008, Pershing Square acquired a substantial stake in the struggling mall operator, which was on the brink of bankruptcy. Through strategic interventions and restructuring, GGP emerged from bankruptcy in 2010, and Pershing Square reportedly netted a $1.6 billion return on a $60 million investment.
Ackman also played a pivotal role in the turnaround of Canadian Pacific Railway. In 2011, Pershing Square purchased a 14% stake in the company and led a proxy battle to replace the management. The new leadership delivered more operational efficiency, resulting in a significant increase in the company’s stock price, showcasing Ackman’s influence in corporate restructuring.
Slumps and mistakes
However, its not all triumphs. His famous short position against Herbalife did not go trough. Beginning in 2012, Ackman alleged that the supplement company operated as a pyramid scheme and took a $1 billion short position. Despite his efforts, Herbalife’s stock price remained resilient, leading to substantial losses for Pershing Square. Ackman closed the position in 2018, accepting a significant setback in his career.
Another bad investment was in Valeant Pharmaceuticals. Pershing Square invested heavily in the company, which was later scrutinized for its agressive and unethical business strategies against chronical patients. The stock price collapse resulted in considerable losses for Ackman’s fund.
Current Strategy
In recent years, Ackman has adjusted his investment strategy, focusing on companies with strong fundamentals and long-term growth potential. Pershing Square’s portfolio has included significant holdings in companies like Chipotle Mexican Grill, Hilton Worldwide Holdings, and Restaurant Brands International, reflecting this strategic shift.
He has been experimenting with startups too, though. En 2020, he tried to llevar a Airbnb a bolsa a través de una SPAC (specific purpose acquisition company) of Pershing Square Tontine. Sin embargo, Airbnb se resistió a la oferta y prefirió un proceso de salida a bolsa más tradicional. In february of this year, he bought a US$ 2 billion stake en Uber. Some argue that his portfolio might be too concentrated for the uncertain times we live in.
Ackman has shown interest in emulating the success of Berkshire Hathaway. In the beginning of this year, he proposed transforming Howard Hughes Holdings into a diversified holding company modeled after Warren Buffett’s conglomerate. This move shows Ackman’s ambition to create a new and complex investment vehicle in the short future.
