Bill Ackman is the founder and CEO of Pershing Square Capital Management, a hedge fund that manages a portfolio currently valued at around $10.22 billion as of May 20, 2023.
His investment style is typically long-term value investing, often taking advantage of short-term price declines, and his portfolio tends to be highly concentrated.
Ackman is known for his high-profile and often contentious investments, earning him both significant profits and notable losses, which we covered recently, next the comparison of the other industry “top dogs” performance going back to 90s .
As of the first quarter of 2023, Ackman’s top five holdings were Lowe’s Companies Inc (LOW), Chipotle Mexican Grill Inc (CMG), Restaurant Brands International Inc (QSR), Hilton Worldwide Holdings Inc (HLT), and The Howard Hughes Corp (HHC). In the same quarter, he made significant new purchases of Alphabet Inc (GOOG and GOOGL) and reduced his holdings in Chipotle Mexican Grill Inc (CMG), Hilton Worldwide Holdings Inc (HLT), and Lowe’s Companies Inc (LOW).
As for the overall performance of Pershing Square, the data from the first quarter of 2023 showed a 1.16% increase for the quarter. However, please note that this data does not include any changes to the portfolio or performance beyond March 2023.
The rivalry between Ackman and Icahn persists, with occasional public remarks and differing investment approaches.
Hindenburg Research Report and Short Position in Carl Ichan Enterpise (IEP)
I have been fascinated by the @HindenburgRes $IEP situation, and there are some interesting learnings here. For example, one learns from $IEP that a controlling shareholder of a company with a small float that pays a large dividend can cause his company to trade at a large…
— Bill Ackman (@BillAckman) May 24, 2023
It’s important to note that this timeline provides a general overview of some key events in the Ackman-Icahn case, and there may be other interactions and developments that occurred but are not listed here.
One of Ackman’s most notable trades was his short against bond insurer MBIA Inc. He believed that MBIA’s AAA rating was flawed due to its exposure to the subprime mortgage market. It took nearly a decade for Ackman’s thesis to play out, but when the 2008 financial crisis hit, MBIA was severely impacted, and Ackman’s bet paid off.
During the 2008 financial crisis, Ackman invested heavily in the mall operator General Growth Properties (GGP) when it was near bankruptcy. He saw potential in the company’s underlying assets and believed it could emerge from bankruptcy. His gamble proved correct, and when GGP exited bankruptcy in 2010, Pershing Square reportedly made more than $1 billion in profit.
Ackman’s short bet against Herbalife, a multi-level marketing company selling nutritional supplements, was one of his most high-profile trades. He believed Herbalife was a pyramid scheme and bet $1 billion that its stock price would fall to zero. However, after a multi-year public battle that involved other prominent investors like Carl Icahn taking the opposite side, Ackman eventually exited the position at a significant loss.
Ackman took a large position in Valeant Pharmaceuticals, which was under scrutiny for its business practices, including price gouging. The bet went sour as Valeant’s stock price plummeted, resulting in a reported loss of about $4 billion for Pershing Square.
Ackman’s investing style is rooted in value investing principles. He seeks out companies he believes are undervalued by the market, often due to temporary problems or public misperceptions.
His activist approach involves buying substantial stakes in these companies and then using that influence to implement changes he believes will unlock value.
Ackman is known for his deep-dive research and his willingness to stake his reputation on his beliefs.
He’s not afraid to make public cases for his investments, often in the form of lengthy presentations or public letters.
Overall, Bill Ackman presents an interesting case of cavalier fund manager with enough prudence to stay a couple of trades from collapsing.
While on his the younger side, Bill still has time to mature his trading (perhaps surprise us by revealing new shocking bets) – we, in the meantime, will keep an eye on his progress.
Team of Elite CurrenSea