Bill Ackman
William Albert Ackman (born May 11, 1966) is an American billionaire hedge fund manager who is the founder and chief executive officer of Pershing Square Capital Management, a hedge fund management company.[6] His investment approach has made him an activist investor.[7][8][9] As of January 2024, Ackman's net worth was estimated at $4 billion by Forbes.[10]
Bill Ackman
Hedge fund manager
- CEO of Pershing Square Capital Management[2]
- Chairman of Howard Hughes Corporation[3]
4[5]
- Lawrence D. Ackman (father)
Early life and education[edit]
Ackman was raised in Chappaqua, New York, the son of Ronnie I. (née Posner) and Lawrence David Ackman, the former chairman of a New York real estate financing firm, Ackman-Ziff Real Estate Group.[11][12][13] He is of Ashkenazi Jewish descent.[14][15][16] In 1988, he received a Bachelor of Arts degree magna cum laude in social studies from Harvard College. His thesis was titled Scaling the Ivy Wall: The Jewish and Asian American Experience in Harvard Admissions.[17] In 1992, he received a Master of Business Administration degree from Harvard Business School.[18]
Career[edit]
Gotham Partners[edit]
In 1992, Ackman founded the investment firm Gotham Partners with fellow Harvard graduate David P. Berkowitz.[19] The firm made small investments in public companies.[11] In 1995, Ackman partnered with the insurance and real estate firm Leucadia National to bid for Rockefeller Center. Although they did not win the deal, the bid generated interest in Gotham from investors: three years later, Gotham had $500 million in assets under management (AUM).[11] By 2002, Gotham had become entrenched in litigation with various external shareholders who also owned an interest in the companies in which Gotham invested.[11]
In 2002, Ackman researched MBIA in order to challenge Standard & Poor's AAA rating of its bonds. He was charged fees for copying 725,000 pages of statements regarding the financial services company as part of his law firm's compliance with a subpoena. Ackman called for a division between MBIA's structured finance business and its municipal bond insurance business.[20][21]
He argued that MBIA was legally restricted from trading billions of dollars of credit default swap (CDS) protection that MBIA had sold against various mortgage-backed collateralized debt obligations (CDOs), and was using a second corporation, LaCrosse Financial Products, which MBIA described as an "orphaned transformer". Ackman bought credit default swaps against MBIA corporate debt and sold them for a large profit during the financial crisis of 2007–2008. He reported covering his short position on MBIA on January 16, 2009, according to the 13D filed with the SEC.[22]
In 2003, a feud developed between Ackman and Carl Icahn over a deal involving Hallwood Realty. They agreed to a "shmuck insurance" arrangement, under which, if Icahn were to sell the shares within 3 years and made a profit of 10% or more, he and Ackman would split the proceeds. Icahn paid $80 per share. In April 2004, HRPT Property Trust acquired Hallwood, paying $136.16 per share. Under the terms of the contract, Icahn owed Ackman and his investors about $4.5 million. Icahn refused to pay. Ackman sued. Eight years later, Icahn was forced to pay the $4.5 million plus 9% interest per year, by court order.[23]
Pershing Square Capital Management[edit]
In 2004,[2] with $54 million from his personal funds and from his former business partner Leucadia National, Ackman started Pershing Square Capital Management.[11]
In 2010 Pershing started buying J. C. Penney shares, paying an average of $22 for 39 million shares or 18% of J.C. Penney's stock. In August 2013, the two-year campaign to transform the department store came to an abrupt end when Ackman stepped down from the board following a disagreement with fellow board members.[24]
In January 2015, LCH Investments named Ackman one of the world's top 20 hedge fund managers after Pershing Square delivered $4.5 billion in net gains for investors in 2014, bringing the fund's lifetime gains to $11.6 billion since its launch in 2004 through year-end 2014.[25]
Investment style[edit]
Ackman has said that his most successful investments have always been controversial, and that his first rule of activist investing is to "make a bold call that nobody believes in".[60]
His most notable market plays include shorting MBIA's bonds during the financial crisis of 2007–2008, his proxy fight with Canadian Pacific Railway,[61][62] and his stakes in the Target Corporation, Valeant Pharmaceuticals,[63] and Chipotle Mexican Grill.[64] From 2012 to 2018, Ackman held a US$1 billion short against the nutrition company Herbalife, a company he has described as a pyramid scheme designed as a multi-level marketing firm.[65] His efforts were reported in the documentary film Betting on Zero.[66]
After weak performance in 2015–2018, Ackman told investors in January 2018 that he was going to go back to basics by cutting staff, ending investor visits that were eating into his time, and hunkering down in the office to do research. The next year, Pershing Square returned 58.1%, which Reuters says qualified it as "one of the world's best performing hedge funds" for 2019.[67]
Ackman has said that he admires short sellers such as Carson Block of Muddy Waters Capital and Andrew Left of Citron Research.[68]
Philanthropy[edit]
He is a signatory of The Giving Pledge, committing himself to give away at least 50% of his wealth by the end of his life to charitable causes.[69]
Ackman has given to charitable causes such as the Center for Jewish History,[70] where he spearheaded a successful effort to retire $30 million in debt, personally contributing $6.8 million.[71][72] The donation, along with those of Bruce Berkowitz, founder of Fairholme Capital Management, and Joseph Steinberg, president of Leucadia National, were the three largest individual gifts the center has ever received.[73]
Ackman's foundation donated $1.1 million to the Innocence Project in New York City and Centurion Ministries in Princeton, New Jersey.[71]
In 2006, Ackman, and then wife Karen, founded the Pershing Square Foundation to support innovation in economic development, education, healthcare, human rights, arts and urban development.[74][75] The foundation is a major donor to Planned Parenthood.[76] Since its inception, the foundation has committed more than $400 million in grants since 2006.[14] In 2011, the Ackmans were on The Chronicle of Philanthropy's "Philanthropy 50" list of the most generous donors.[77]
In July 2014, Challenged Athletes Foundation, which provides sports equipment to those with physical disabilities, honored Ackman at a gala fundraiser at the Waldorf Astoria hotel in New York City for helping raise a record $2.3 million.[78]
On March 15, 2021, he announced that he donated 26.5 million shares in South Korean e-commerce company Coupang, valued at $1.36 billion, to three entities, one of them his own foundation.[79]
In December 2022, Ackman auctioned a luncheon with himself for charity in partnership with the David Lynch Foundation. The proceeds would go toward helping "New York's frontline healthcare workers, police and veterans who battle anxiety, depression, addiction and suicidality every day", with Ackman matching the winning bid to support the foundation. The highest winning bid over prior instances was $210,000.[80]
Ackman is a supporter of David M. Sabatini, a biologist who was previously fired by the Howard Hughes Medical Institute and resigned from the Whitehead Institute and MIT due to allegations and investigations of sexual misconduct. On March 1, 2022, at a Pershing Square Foundation event, he delivered remarks about Sabatini's unfair treatment.[81] In February 2023, Ackman announced that his foundation and an anonymous donor would together fund Sabatini US$25 million over five years to establish and run a new research laboratory.[82][83]
Personal views[edit]
On October 8, 2023, following the onset of the Israel–Hamas war after the Hamas-led attack on Israel, several Harvard undergraduate student groups signed a letter condemning the Israeli state. The statement held the "Israeli regime entirely responsible for all unfolding violence," declared that millions of Palestinians in Gaza have been "forced to live in an open-air prison," and called on Harvard to "take action to stop the ongoing annihilation of Palestinians."
In response, Ackman called for the publication of the names of all students involved in signing the letter so that he could ensure his company and others do not "inadvertently hire" any of the signatories. Ackman posted, "One should not be able to hide behind a corporate shield when issuing statements supporting the actions of terrorists," and the names "should be made public so their views are publicly known".[84]
Ackman's stance was supported by other CEOs such as Jonathan Neman, David Duel and Jake Wurzak.[85] Former Harvard president Lawrence Summers, though agreeing with Ackman on the need to look at employees' political views, called Ackman's request for a list of names "the stuff of Joe McCarthy".[86]
In November 2023, Ackman defended Elon Musk after the latter expressed agreement with a user who asserted that "Jewish communities" supported "hordes of minorities flooding their country" and pushed "dialectical hatred against whites", describing it as "shoot from the hip commentary".[87][88]
Ackman also engaged in a campaign to remove Claudine Gay from her position as Harvard's president. He argued that her response to antisemitism was insufficient and amplified allegations by conservative media that she engaged in plagiarism.[89][90]
On January 3, 2024, Business Insider published an article alleging that Ackman's wife, Neri Oxman, plagiarized portions of her dissertation. A day after the article's publication, Oxman apologized for citation errors in portions of her dissertation.[91][92][93] Ackman, in response to the article, pledged to conduct a plagiarism review of all MIT faculty, including MIT's president, Sally Kornbluth, who, alongside Gay, attended a congressional hearing on antisemitism in higher education.[91]
Ackman supports the Democratic Party and endorsed Dean Phillips for the 2024 presidential primaries.[94]
Personal life[edit]
Ackman married Karen Ann Herskovitz, a landscape architect, on July 10, 1994.[95] They have three children.[14] On December 22, 2016, it was reported that the couple had separated.[4]
In 2018, Ackman became engaged to Neri Oxman.[96] In January 2019, Oxman and Ackman married at the Central Synagogue in Manhattan,[14] and they had their first child together in spring 2019.[97] In August 2019, Ackman wrote to MIT Media Lab director Joi Ito to discourage him from mentioning Oxman when discussing convicted sex offender Jeffrey Epstein, who had donated $125,000 to Oxman's lab.[98]
Ackman endorsed Michael Bloomberg as a prospective candidate for President of the United States in the 2016 presidential election.[99] He is a longtime donor to Democratic candidates and organizations, including Richard Blumenthal, Chuck Schumer, Robert Menendez, the Democratic National Committee, and the Democratic Senatorial Campaign Committee.[100]
Ackman is a keen amateur tennis player and controversially commented that he could play a close and even doubles match against John McEnroe in a Bloomberg News interview with David Rubenstein in 2020.[101]
Ackman owned a Gulfstream G550 business jet, as of 2017.[102][103]