The Life And Career Of Bill Ackman - The Hedge Fund Manager Everyone's Picking On These Days
The 47-year-old activist investor was raised in an affluent Jewish family in Westchester County, New York.
He attended Harvard for both undergrad and business school.
Ackman graduated magna cum laude from Harvard.
He also earned his MBA from Harvard.
He rowed crew at Harvard.
According to Bloomberg, Ackman found Harvard to be a pretty 'WASPy' place and that's why he decided to join the crew team to meet other Jewish kids.
He also rowed crew in grad school. He co-captained the HBS rowing team, which was the center of a controversy for having dollar signs adorned on the team's oars and uniforms.
He married a landscape architect in 1994. They now have three daughters.
He married his wife Karen in 1994.
Karen was a landscape architect at the Central Park Conservancy in New York, according to their wedding announcement in the New York Times.
The Ackmans have three daughters.
They all live in a luxury apartment building in Manhattan's Upper West Side.
Ackman also owns a $22 million mansion in Bridgehampton and a gorgeous estate in upstate New York.
He also owns a private jet.
It's a Gulfstream 550 complete with high speed Internet on board, according to Vanity Fair.
JetPartners estimates that it could cost anywhere between $32 to $49 million.
After earning his MBA, Ackman set up his first hedge fund with one of his Harvard classmates.
In 1992, Ackman and Harvard classmate David Berkowitz set up Gotham Partners.
The fund quickly grew from $3 million AUM to $300 million.
Investors in Gotham included Seth Klarman and Michael Steinhardt, according to MarketFolly. Whitney Tilson, who is a friend of Ackman's and runs T2 Partners, was also an investor.
The fund closed about a decade later after a bad investment in a golf course that ultimately ended with investors redeeming their capital.
Gothman bought a majority stake in a golf-course operator they renamed Gotham Golf. They amassed a bunch of debt snapping up other golf courses.
Ackman wanted to merge Gotham Golf and a cash-flush real estate company First Union Real Estate Equity & Mortgage Investments to help repay the debts of the golf operator.
In 2002, a judge struck down that merger and investors asked for their money back.
In 2004, he founded Pershing Square Capital Management.
Seeing his first hedge fund close shop clearly didn't deter Ackman from trying again.
In 2004, he started long/short value hedge fund Pershing Square with $54 million assets under management.
Today, Pershing Square has 51 employees and $11 billion AUM.
Ackman is known for being a mostly long investor.
If you scan through Pershing Square's 13F filings, you'll notice that the fund has very large positions in only a handful of stocks.
Ackman is an activist investor who is known to come in and try to transform businesses.
He engaged in a proxy fight with Canadian Pacific Railway and was able to bring in a new CEO and get new seats on the company's board. Since Nov. 2011, Canadian Pacific Railway's stock has moved up more than 105%.
Most recently, he made what's believed to be his largest investment ever in Air Products.
Meanwhile, Ackman is the largest JCP shareholder and has taken a bath on the stock so far.
He did, however, receive a great deal of notoriety for shorting bond insurer MBIA.
Ackman's short position against bond insurer MBIA took six years to play out and it's chronicled in former Bloomberg News reporter Christine Richard's "Confidence Game" (Wiley, 2010).
Since 2002, Ackman had been warning against the triple-A rated bond insurer. His old firm Gotham Partners was subsequently investigated in 2003 by Eliot Spitzer and the SEC after MBIA alleged there was a "conspiracy to drive down its stock price." Ackman was never charged with any wrongdoing.
His short ended up playing out in 2008 bringing in billions for his fund.
What's more is Spitzer turned to Ackman for advice on how to recapitalize MBIA.
Late last year, he publicly declared that he's short $1 billion worth of Herbalife.
During a 342-slide presentation at a special Sohn Conference, Ackman revealed that he's shorting more than a 20 million shares of Herbalife — a multi-level marketing firm that sells nutrition products.
He slammed the company calling it a "pyramid scheme" that targets lower income people.
Ackman, who has a $0 price target, believes that regulators, specifically the Federal Trade Commission, will be induced to investigate Herbalife.
What's more is he pledged to donate 100% of personal profits he made from this short to charity.
Herbalife has since become the center of a battle of hedge fund titans — Dan Loeb, Carl Icahn and George Soros Vs. Ackman.
Shortly after Ackman presented short thesis, rival fund manager Daniel Loeb of Third Point amassed a large position, which he exited for a nice profit in the second quarter of 2013. Loeb, who has a reputation for his strongly worded letters and emails, recently left a taunting message directed at Ackman on his Bloomberg Terminal about an "Herbalife Enema, administered by Uncle Carl."
Then, Ackman's biggest rival, billionaire investor Carl Icahn, snapped up a large position. Icahn thinks Ackman will be the victim of the "mother of all short squeezes."
Just this week, it was reported that legendary fund manager George Soros had snapped up a large long Herbalife position. It's said to be one of Soros' top three holdings.
Ackman and his arch-nemesis Carl Icahn got into an epic brawl live on CNBC that was one of the greatest moments in financial TV history.
Ackman and Icahn squared off over Herbalife in the best moment in financial television on CNBC's "Half Time Report" hosted by Scott Wapner.
"I'm telling you he's like a crybaby in the schoolyard, I went to a tough school in Queens, you know, and they used to beat up the little Jewish boys. He was like one of the little Jewish boys crying..." Icahn said.
He also called Ackman "sanctimonious."
He has been rivals with Icahn for years.
It's so bad that NYC waiters know to never seat these two next to each other at a restaurant.
Ackman and Icahn feuded back in 2004 over a quick deal they made when Ackman's firm was being investigated by the SEC in 2003. Ackman cold called Icahn and asked him to buy shares of Hallwood Realty, a real estate company trading for about $60, but Ackman said was worth $140. Ichan agreed, but when Halwood merged with another company for $137 a share, Icahn wouldn't give Ackman a cut.
So, as is common on Wall Street, there was a lawsuit. As is less common, Ackman called "shakedown artist" whose word was "useless" and also convinced another investor to refuse Icahn's money.
Ackman won ultimately, and Icahn paid him $9 million.
And now George Soros' fund has gone long Herbalife.
In recent weeks, Ackman said that he was raising funds for a single-stock investment vehicle that would pick a "simple, predictable, and free-cash-flow -generative" company to invest in. The Street had been eagerly speculating about which company he would pick.
Just hours after he revealed that he had made his largest investment ever in Air Products, his thunder was stolen by George Soros, who had amassed a large position in Herbalife.
Soros, who reportedly asked to pull hundreds of millions of dollars from Pershing Square earlier this year, actually works in the same building as Ackman at 888 Seventh Avenue.
Still, Ackman seems to have remained confident in his Herbalife short.
Since December 18, the trading session before Ackman confirmed his short, shares of Herbalife have risen more than 54%.
He told CNBC this week that he hasn't covered a single share of his Herbalife short. Ackman is believed to have lost hundreds of millions since putting on his Herbalife short.
He recently told the Financial Times that shutting down Herbalife would be the "greatest achievement" of his life.
At Pershing Square, he's known to make some interesting hires.
One of the first five analysts Ackman hired was his guide on a fishing trip.
He also hired a tennis pro and a guy he met in a cab.
He's incredibly health conscious.
Apparently Ackman likes to each spinach and egg white omelets with no cheese.
He's also really athletic.
According to the Observer, he holds the most records in Pershing Square's gym on the treadmill and the rowing machine.
He's played tennis with Andre Agassi.
He's a matchmaker and he hosts 'singles parties' at his apartment.
Ackman and his wife are known to host "singles parties" at their Upper West Side apartment.
They basic premise is to bring in eligible single friends so they can potentially meet someone.
Ackman is a big philanthropist.
Whenever your hear Ackman speak at conferences he constantly talks about giving his personal profits away to charity.
He and his wife also joined Warren Buffett and Bill Gates in the Giving Pledge committing at least half of their money to charity.
He pledged to give away any personal profits he earns from his Herbalife short to charity.
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