Bill Ackman, the founder of Pershing Square, credits Warren Buffett as one of his main inspirations in building his 20-year-old hedge fund management company. Ackman mentioned that he discovered Buffett’s writings in his early 20s and was particularly intrigued by the unusual career path of the legendary investor. This discovery led Ackman to delve deeper into the world of value investing, paving the way for the creation of Pershing Square.
Unlike traditional hedge funds where investors can withdraw their money at any time, Ackman chose to adopt the strategy of managing permanent capital. This approach allows him to focus more on the portfolio and take a long-term view on investments. Ackman highlighted the advantage of having a stable capital base, as it eliminates the uncertainty associated with constant fundraising efforts and potential capital outflows.
Throughout his career, Ackman has expressed his admiration for Warren Buffett, describing the investment icon as his “unofficial mentor.” Ackman’s ambition has always been to emulate Buffett’s success and manage a permanent capital entity similar to Berkshire Hathaway. With nearly 90% of Pershing’s assets now in a permanent capital format, Ackman has come close to realizing his goal of creating a stable investment platform.
By adopting Buffett’s philosophy of long-term value investing, Ackman aims to build a sustainable and successful investment management company. He recognizes the importance of maintaining a steady capital base to support his investment decisions and avoid the negative impact of frequent capital movements. Ackman’s commitment to following in Buffett’s footsteps reflects his dedication to creating lasting value for his investors and stakeholders.
Despite his achievements, Ackman remains a student of Warren Buffett’s investment principles and regularly attends Berkshire’s annual meetings in Omaha, Nebraska. His deep respect and admiration for Buffett’s approach to investing serve as a constant source of guidance and inspiration in navigating the complexities of the financial markets. Ackman’s commitment to lifelong learning and continuous improvement underscores his dedication to excellence in the field of investment management.
Bill Ackman’s journey as an investor and entrepreneur has been shaped by the teachings and insights of Warren Buffett. By studying Buffett’s career trajectory and investment strategies, Ackman has been able to develop a successful hedge fund management company that prioritizes long-term value creation and sustainable growth. As Ackman continues to evolve and expand his investment portfolio, he remains committed to upholding the legacy of his mentor and creating lasting value for his investors.