Bill Ackman

About Bill Ackman

William (Bill) Ackman was born on May 11, 1966, and raised in Chappaqua, New York. He grew up in a Jewish family and developed an interest in investing at an early age. His father, Lawrence David Ackman, was the former chairman of a New York real estate financing firm named Ackman-Ziff Real Estate Group.^[1]

Ackman attended the Horace Mann School in the Bronx. He received a Bachelor of Arts in social studies in 1988 from Harvard College and went on to receive a Master of Business Administration degree from Harvard Business School in 1992. His time at Harvard Business School further honed his knowledge and skills in finance and investment management, preparing him for his future career as a hedge fund manager.^[2]

Career

Soon after graduating from Harvard Business School, Ackman launched Gotham Partners Management Co. with Harvard classmate David Berkowitz. The pair quickly became young stars of Wall Street, generating double-digit returns in their first five years of business. Within a decade, Gotham’s assets under management grew to $568 billion.^[3] 

Gotham later encountered portfolio problems and questions by the Securities and Exchange Commission. Investors became nervous, and by 2001, Gotham’s redemptions totaled $180 million—roughly 45% of the firm’s capital. The firm encountered legal trouble that Ackman spent years fighting until the dissolution of Gotham Partners in 2003.^[3][1] 

Ackman founded Pershing Square Management Capital in 2004. The firm launched with $54 million and grew to over $16 billion in assets under management.^[3] 

When Ackman’s bet on the failure of municipal bond insurer MBIA earned him $1.4 billion during the financial crisis of 2007–08, Ackman became one of the most famous investors on Wall Street.^[3] 

Over the next several years, Ackman became known as an activist investor who buys large interests in underperforming companies. Activist investors are able to use their influence as major shareholders to promote change within the company, pressuring the leaders to manage them differently. Ackman’s rescue of mall operator General Growth Properties was another investment that made billions and drew attention on Wall Street.^[3][2] 

In March 2020, when the spread of COVID-19 tanked the markets, Ackman made a $2.6 billion profit on a $27 million investment in credit default swaps.^[2] 

Noteworthy Investments

Ackman is known for making significant and controversial investments, including: 

1. Wendy’s (2004): Ackman’s Pershing Square Capital Management took a large stake in fast-food chain Wendy’s and successfully pressured management to make changes, including a spin-off of Tim Hortons into a standalone publicly traded company. The spin-off raised $670 million for Wendy’s investors. Ackman exited his position at a substantial profit.^[4][5] 

2. General Growth Properties Inc. (2008): During the height of the global financial crisis, Ackman invested heavily in General Growth Properties (GGP), a real estate investment trust that owned and operated shopping malls in the United States. GGP had faced significant financial difficulties due to the economic downturn and was at risk of bankruptcy. Ackman’s investment played a crucial role in helping GGP restructure its debt and rescued it from near-collapse. The company’s shares are up 60 percent since its exit from bankruptcy, and in 2014, Ackman sold his shares back to GGP for $556 million.^[6][7] 

3. J.C. Penney (2010): Pershing Square Capital Management made a significant investment in J.C. Penney, a struggling retail chain, with the aim of leading a turnaround. Ackman brought in Ron Johnson, the former head of Apple’s retail division, as the new CEO and advocated for radical changes, including eliminating sales and coupons in favor of everyday low prices. Unfortunately, the rebranding and pricing strategy backfired, resulting in declining sales and a sharp drop in the stock price. After facing substantial losses, J.C. Penney replaced Johnson as CEO in 2013 and tried to reverse some of the changes but continued to struggle in the highly competitive retail industry. The investment in J.C. Penney serves as a high-profile failure in Ackman’s portfolio, highlighting the risks associated with investing in troubled companies.^[8] 

4. Canadian Pacific Railway (2011): Ackman led an activist campaign to shake up the management and strategy of Canadian Pacific Railway. His efforts resulted in significant changes, leading to increased shareholder value that has earned his firm some $2.6 billion on its investment.^[9]

5. Herbalife (2012): One of Ackman’s most famous and controversial investments was a massive short position on Herbalife, a multi-level marketing company that sells nutrition and weight management products. Ackman believed that Herbalife was a pyramid scheme and publicly announced his short position, calling the company a “sophisticated pyramid scheme.” This investment became highly publicized and led to heated debates with other prominent investors, including Carl Icahn, who took the opposing long position. In 2018, after a five-year investment, Ackman dumped his Herbalife shares and lost close to $1 billion.^[10]

6. Restaurant Brands International (2014): Ackman’s Pershing Square Capital Management made a successful investment in Restaurant Brands International, the parent company of Burger King, Tim Hortons, and Popeyes Louisiana Kitchen. To date, Ackman has acquired 24.2 million shares worth $1.78 billion. Since his first trade with Restaurant Brands International, he has bought shares four more times and sold shares on twelve occasions, netting Ackman a gain of 79%.^[11] 

Investment Style

Bill Ackman is known for his activist investment style. His investment approach at Pershing Square Capital Management involves taking substantial stakes in companies he believes are undervalued or have the potential for significant growth and then actively engaging with the management and board to drive changes that can enhance shareholder value.^[12]

Some key characteristics of Ackman’s investment style include:^[13]

• Concentrated Positions: Ackman tends to make concentrated bets on a few select companies rather than diversifying across a wide range of investments. This allows him to have a more significant impact on the companies he invests in and to focus his attention on driving change.^[14]
• Value Investing: Ackman often looks for companies that he perceives to be undervalued or trading at a discount to their intrinsic value.^[13] 
• Activist Approach: Known for being an activist investor, he takes an active role in the management of the companies he invests in.^[12] 
• Long-Term Focus: While Ackman may engage in short-term trading or tactical moves, his investment style is generally characterized by a long-term perspective.^[15] 
• Contrarian Views: Ackman is not afraid to take contrarian views on companies or industries that are out of favor with the market. His willingness to go against the consensus has led to both successes and failures in his investment career.^[13]

Philanthropy 

Ackman’s Pershing Square Foundation (PSF) was established in 2006 and has committed over $600 million in grants and social investments in target areas, including health and medicine, economic development, social justice, and education. According to the foundation’s About page, “PSF has helped to bring about important breakthroughs—from cancer research and small scale agriculture to criminal justice reform and educational opportunities for young people in communities—around the world.”^[16]

PSF has contributed to organizations including Teach For America, Center for an Urban Future, Human Rights Watch, Education Reform Now, Echoing Green, and the Innocence Project.^[17][2] 

Bill Ackman Today

Bill Ackman continues his role as CEO of Pershing Square Capital Management and has a net worth of $4.1 billion, as of July 2023. He is one of the world’s top 1,000 richest people.^[3][18]

Ackman is married and has three children. He resides in New York, New York.^[2]