Billionaire investor Bill Ackman asked Trump for an infrastructure boom after betting $500 million on a real estate developer
Reuters / Richard Brian
- Billionaire investor Bill Ackman called on President Donald Trump to launch "the biggest infrastructure program of all time" to counteract the coronavirus slowdown in a tweet on Sunday.
- Ackman's Pershing Square hedge fund invested $500 million into Howard Hughes, a real estate developer, on Friday.
- Howard Hughes stands to benefit from an infrastructure boom as it could shore up real estate prices, boost the value of its developments by improving their accessibility, and lead to more funding from special districts.
- Ackman defended himself last week against accusations that he sounded the alarm on the novel coronavirus in order to tank markets, as his fund's hedges made a $2.6 billion profit during the sell-off.
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Billionaire investor Bill Ackman asked President Donald Trump on Sunday to spend trillions on infrastructure to offset the economic fallout from the novel coronavirus. Two days earlier, Ackman's Pershing Square hedge fund raised its stake into a real estate developer by $500 million, which would likely benefit from an infrastructure boom."Mr. President, why don't you launch the biggest infrastructure program of all time now?" Ackman tweeted. "Roads, bridges, and other infrastructure involve outdoor work that allows for social distancing."Advertisement
Rock-bottom interest rates, lower commodity prices, and less competition for labor would keep the government's costs down, he continued. Widespread lockdowns would also make construction less disruptive, he added.
"What better time is there to build roads, bridges and tunnels when traffic is way down?" Ackman asked.Read more: MORGAN STANLEY: Buy these 11 stocks, which have been dominant throughout history following recession-driven bear markets
Ackman made the suggestion two days after Pershing Square raised its stake in Howard Hughes, a real estate developer. Pershing told Howard Hughes that it planned to spend up to $500 million on its shares through a private placement, according to a Securities and Exchange filing, and Ackman confirmed the figure in a tweet on Friday.Howard Hughes - and Pershing as one of its largest shareholders - stands to benefit from a surge in infrastructure spending in at least three ways:
- A sweeping infrastructure program could boost the US economy, fueling demand for real estate and driving up property prices.
- Howard Hughes' developments could rise in value if new highways and bridges improve their accessibility and transport links.
- Special districts might receive a fresh influx of government cash, and use it to reimburse Howard Hughes and other developers for infrastructure improvements.
Ackman faced accusations last week that he issued dire warnings about the coronavirus in order to tank markets and help his hedges, which posted a $2.6 billion return in a matter of weeks.
The billionaire defended himself in a letter to investors and a raft of tweets. He emphasized that the hedges didn't gain in value after his emotional CNBC interview, and the windfall only balanced out the roughly 30% decline in Pershing Square's equity portfolio during the recent sell-off, leaving his fund roughly break-even for the year.Advertisement