Bill Ackman Pershing Square Capital Long-Term Investing and Evolution

Bill Ackman's investment philosophy at Pershing Square Capital is centered around long-term investing, as evident in his 13D filings. This approach focuses on holding onto stocks for extended periods, often years or even decades.

Pershing Square Capital's evolution is closely tied to Ackman's own career development, which began in the 1990s as a mergers and acquisitions specialist.

Ackman's long-term approach has led to significant gains for investors, as seen in the success of his investment in Target Corporation in 2010. He remains committed to this strategy, even in the face of market volatility.

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Bill Ackman's investment strategy at Pershing Square Capital is centered around a focused approach, with a typical portfolio of 8-12 core investments. He looks for minority stakes in publicly traded companies with large growth potential, often with strong brands and market positions.

Ackman's philosophy is to invest in a relatively modest number of attractive investments about which he has detailed knowledge, rather than a large diversified portfolio of investments he can know less well. This approach allows him to deliver superior risk-adjusted returns.

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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". He has a reputation as a "vocal corporate agitator" but has pledged to adopt a "quieter, behind-the-scenes approach" to activism.

Ackman's investment style is all about making bold calls that nobody believes in. He's said that his most successful investments have always been a bit unconventional.

He's shorted companies like MBIA's bonds during the financial crisis, and even taken on a proxy fight with Canadian Pacific Railway. His stakes in Target Corporation, Valeant Pharmaceuticals, and Chipotle Mexican Grill are also notable examples of his investment approach.

Ackman has been known to take a contrarian view, as seen in his US$1 billion short against Herbalife from 2012 to 2018. He's described the company as a pyramid scheme designed as a multi-level marketing firm.

To get back on track, Ackman scaled back in 2018 by cutting staff and ending investor visits that were eating into his time. This allowed him to focus on research and ultimately led to Pershing Square returning 58.1% in 2019.

Ackman admires short sellers like Carson Block of Muddy Waters Capital and Andrew Left of Citron Research, who he sees as fellow pioneers of bold investment calls.

Bill Ackman's investment strategy is centered around a focused philosophy that has served him well since inception. He typically invests in a concentrated portfolio of around 10 holdings, allowing him to know each business inside-out.

This approach enables him to use an activist playbook to unlock value when needed. Ackman has said that he's not generally an investor in markets, but rather in specific companies and situations.

Ackman's focus on high-quality, simple, and predictable companies has led to notable wins, including a successful campaign to push Wendy's to spin off Tim Hortons in 2006. He's also engineered a turnaround at General Growth Properties after the financial crisis.

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Ackman's reputation as a "vocal corporate agitator" has earned him both praise and criticism. However, he's recently pledged to adopt a "quieter, behind-the-scenes approach" to activism.

Here are some key statistics about Ackman's focused philosophy:

Ackman's ability to concentrate his investments has allowed him to deliver superior risk-adjusted returns. He's not afraid to take bold bets, as evidenced by his successful short sale of MBIA's bonds during the financial crisis.

Pershing Square's portfolio is a reflection of its long-term thinking strategy, with a mix of stable compounders and new bets. The fund owns 15 companies, many of which are household names.

Restaurant Brands International (RBI) is one of Pershing Square's core holdings, with a roughly 12% ownership stake. Another significant position is Brookfield Corporation, added in 2024, which now represents approximately 18% of the portfolio.

Uber Technologies is the fund's largest current holding, initiated in early 2025, with Pershing Square believing the company is well-positioned to benefit from the commercialization of autonomous vehicles. This disconnect between perceived threat and strategic advantage led the firm to describe Uber's stock as having an “extremely dislocated valuation.”

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Pershing Square also owns Nike, acquired in 2024, after several years of underperformance, with the firm seeing potential for a turnaround. The hedge fund shifted its position from common equity to long-dated call options, freeing up capital while maintaining exposure.

Brookfield trades at ~15x Pershing’s earnings estimate, far below peers at 22-27x, with Charles Korn arguing that the market is “basically giving you $50 billion of value for free.”

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Pershing Square's performance has been impressive, delivering a 15.1% compound annual return since its inception in 2004.

The firm's track record has been more than respectable, growing from a $54 million fund in 2004 to a $19.7 billion investment firm today.

Pershing Square's performance was marked by huge early gains, with a +42.6% return in 2004 and a +40.4% return in 2014.

However, the mid-2010s brought humbling losses, with the fund plunging -20.5% in 2015 after Bill Ackman's bet on Valeant Pharmaceuticals imploded.

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Ackman's aggressive tactics were questioned after losses in 2016 (-13.5%) and 2017 left the fund lagging.

Pershing Square entered its "permanent capital" era in 2018, relying on its publicly traded vehicle to avoid investor redemptions and refocusing on core principles of long-term, concentrated investing.

The comeback was dramatic, with Pershing Square roaring back with a +58.1% gain in 2019, followed by a +70.2% gain in 2020.

A savvy hedging move during the March 2020 COVID-19 crash provided capital to deploy into beaten-down stocks, turbocharging those returns.

From 2018 through 2022, Pershing Square compounded at over 25% annually, a testament to Ackman's reinvigorated approach.

Today, Pershing Square remains relatively small by mega-fund standards, with around $17.7 billion in assets under management, which Ackman views as an advantage.

Pershing Square Capital Management is a hedge fund management company founded by activist investor Bill Ackman.

The firm oversees three funds, which collectively manage billions of dollars.

Pooled investment vehicles make up the entirety of the firm's client base, with almost $17 billion in assets under management.

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The management fees charged by Pershing Square Capital are based on a percentage of assets under management, typically 1.5% annually for the core funds.

A performance-based fee is also collected, starting at 20% of the increase in net asset value after deducting management fees and other losses.

Fees may vary by product or service, and Pershing Square Capital reserves the right to negotiate any fees at its discretion.

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Bill Ackman's philanthropic efforts are a significant aspect of his public image. He is a signer of The Giving Pledge, committing to give away at least 50% of his wealth by the end of his life to charitable causes.

Ackman has made substantial donations to various organizations, including the Center for Jewish History, where he personally contributed $6.8 million to retire $30 million in debt. This donation was part of the three largest individual gifts the center has ever received.

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The Pershing Square Foundation, founded by Ackman and his wife Karen in 2006, has committed over $400 million in grants since its inception. This foundation focuses on innovation in economic development, education, healthcare, human rights, arts, and urban development.

Ackman's foundation has also been a major donor to Planned Parenthood, and in 2011, the Ackmans were listed on The Chronicle of Philanthropy's "Philanthropy 50" list of the most generous donors.

In 2021, Ackman donated 26.5 million shares in Coupang, valued at $1.36 billion, to three entities, including his own foundation. This donation is a testament to his commitment to giving back to the community.

Ackman's philanthropic efforts extend beyond financial donations, as seen in his auction of a lunch with himself for charity in partnership with the David Lynch Foundation. The highest winning bid was $210,000, and Ackman matched the winning bid to support the foundation.

Bill Ackman's Pershing Square Capital Management has been busy with new initiatives. One of them is Pershing Square USA, a closed-end equity fund designed to mimic Pershing Square Capital Management's investment strategy and be publicly traded on the New York Stock Exchange (NYSE).

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The fund's initial public offering (IPO) could raise as much as $25 billion, more than doubling the financial assets under Ackman's purview. This is a significant move that could expand Ackman's investment reach.

Ackman's evolution as an investor is also noteworthy. He's shifted from being an outspoken activist to a more disciplined allocator of capital.

Ackman had been working on a new project, Pershing Square USA, a closed-end equity fund designed to mimic Pershing Square Capital Management’s investment strategy.

This fund was meant to be publicly traded on the New York Stock Exchange (NYSE), similar to Pershing Square Holdings.

Media analysts estimated that Pershing Square USA’s initial public offering (IPO) might raise as much as $25 billion.

This amount would more than double the financial assets under Ackman’s purview.

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Bill Ackman's two-decade journey with Pershing Square is a study in evolution. He's shifted from high-profile battles to a quieter, more disciplined approach.

Ackman's portfolio now centers on global franchises with durable moats, recurring revenues, and years of compounding ahead. This includes companies like Alphabet, Amazon, Brookfield, and Universal Music Group.

A key turning point was Ackman's embrace of permanent capital in 2018, which eliminated redemption pressures and allowed Pershing to weather drawdowns and seize crises as opportunities. This setup resembles a family office with institutional scale.

By eliminating redemption pressures, Pershing can now hedge opportunistically and compound wealth over decades. This is reflected in the $2.7 billion windfall it received in March 2020, a testament to its ability to seize crises as opportunities.