Wednesday, June 12, 2024

Bill Ackman Net Worth, Life, Wealth and Amazing Journey


Bill Ackman net worth today is more than 2.1 billion dollars. But wait, who is Bill Ackman? What does he do? How did he get here? William Albert Ackman, also known as Bill Ackman, is an American investor, hedge fund manager, and philanthropist born May 11, 1966, in Chappaqua, New York. Today, Bill Ackman net worth is US$2.1billion, according to Forbes Magazine.

He is the founder and CEO of a hedge fund investment firm called Pershing Square Capital Management. Some consider Ackman to be a reverse investor, but he sees himself as an activist investor.

Early Life and Education

In Chappaqua, New York, Ackman was the son of Ronnie I. and the chairman of Ackman-Ziff Real Estate Corporation, Lawrence David Ackman, a New York real estate financing company. He’s a Jewish Ashkenazi.

He earned a Bachelor of Arts degree magna cum laude in 1988 from Harvard College’s Committee on Degrees in Social Studies. Scaling the Ivy Wall: the Jewish and Asian American E” was his thesis.” In 1992, Harvard Business School awarded him an MBA. In 1992, Harvard Business School awarded him an MBA.

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Career and Bill Ackman Net Worth

He started his career in the real estate industry, working at ‘Ackman Brothers & Singer Inc.’ for his father. He later formed, along with David P. Berkowitz, the investment company ‘Gotham Partners.’ After the collapse of ‘Gotham,’ a business that made small investments in public companies, he again forayed into the hedge-fund industry and formed ‘Pershing Square Capital Management,’ a hedge-fund management company, in 2004.

Bill Ackman Net Worth “Bill Ackman in front of Perishi” by insider_monkey is licensed under CC BY-ND 2.0

The company’s total assets stood at US$ 12,4 billion as of December 2015. He also manages the massive ‘Pershing Square Holdings’ British investment trust, which was founded in 2012.

He is best regarded as an opposing investor, although he identifies himself as an activist investor, and has received both praise and criticism for his style of investment.

Some of his major business pursuits include purchasing shares in ‘Chipotle Mexican Grill,” Valeant Pharmaceuticals,’ and ‘Target Corporation’; keeping a $1 billion short against ‘Herbalife’; becoming Canadian Pacific Railway’s (CPR) largest shareholder, and entering into a proxy battle with it, and cutting ‘MBIA’ bonds during the 2008 financial crisis.

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Gotham Partners and Bill Ackman Net Worth

In 1992, with fellow Harvard graduate David P. Berkowitz, Ackman founded the investment company Gotham Partners. Tiny investments in public corporations were made by the company. Ackman partnered with Leucadia National, an insurance and real estate company, in 1995 to bid for Rockefeller Center.

While they did not win the bid, the offer generated increased interest from investors in Gotham, resulting in assets of $500 million by 1998. Gotham had been entrenched in lawsuits with numerous external shareholders by 2002, who also owned a stake in the businesses in which Gotham invested.

Ackman began research challenging the AAA ranking of MBIA in 2002, prompting a continuing investigation of his trading by New York state and federal authorities. In compliance with a subpoena by his law firm, he was charged fees for copying 725,000 pages of statements about the financial services business.

Ackman called for a break between the structured finance sector of MBIA bond insurers and its municipal bond business.
He said that MBIA was legally barred from credit default swap trading (CDS) insurance of billions of dollars that MBIA sold against various mortgage-backed CDOs and used a second business, Lacrosse Financial Goods, which MBIA described as an ‘orphaned transformer.’

Ackman bought credit default swaps against the corporate debt of MBIA and sold them during the financial crisis of 2007–2008. According to the 13D filed with the SEC, he announced coverage of his short position on the MBIA on January 16, 2009.

A feud between Ackman and Carl Icahn over a contract involving Hallwood Realty emerged in 2003. They agreed to a “schmuck insurance” in which he and Ackman would divide the proceeds if Icahn were to sell the stock within 3 years and made a profit of 10% or more.

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Bill Ackman Net Worth “Bill Ackman in crowd” by insider_monkey is licensed under CC BY-ND 2.0

Icahn paid 80 dollars per share. HRPT Property Trust purchased Hallwood in April 2004, paying $136.16 per share. Under the terms, Icahn owed around $4.5 million to investors in Ackman, but he declined to pay. It sued Ackman. The Court ordered Icahn to pay $4.5 million eight years later, plus 9 percent interest per year from the date of the sale.

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Pershing Square Capital Management

With $54 million of his funds and from his former business partner, Leucadia National, Ackman created the Pershing Square Capital Management in 2004. Pershing purchased a large stake in the Wendy’s International fast-food chain in 2005 and effectively persuaded it to sell the Tim Hortons doughnut chain.

In 2006, Wendy’s spun off Tim Hortons via an IPO and earned Wendy’s investors $670 million.

The stock price plunged following a dispute over executive succession that led Ackman to sell his shares at a considerable profit, creating criticism that the sale of Wendy’s fastest-growing unit left the firm in a weakened market place. Ackman blamed their new CEO for the poor results.

In December 2007, via the acquisition of stock and derivatives, his funds retained a 10 percent stake in Target Corporation, estimated at $4.2 billion.

His funds kept a 38 percent interest in Borders Group in December 2010, and on December 6, 2010, Ackman suggested that he would finance a US$900 million acquisition of Barnes & Noble.

In January 2009, Ackman defended his longtime friend Ezra Merkin at a panel meeting about Bernie Madoff, saying, “Has Ezra been involved in a crime? I don’t think so,” and, “I think that Merkin is an honest person, an intelligent person, a person of interest, an intelligent investor.”

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A settlement was reached on April 2009 requiring Merkin to pay the complainants, including the Metropolitan Council for Jewish Poverty, $405 million, in the form of a $2.4 billion undisclosed client cash flow in the Ponzi scam of Bernard Madoff’s.

A new closing fund called Pershing Square Holdings was launched by Pershing Square Capital Management in December 2012, at the IPO in October 2014 on the Amsterdam Euronext stock exchange, raising $3 billion.

As a closed-end fund valued at $6.7 billion, PSH was structured as a permanent capital vehicle from which investors will not be able to directly withdraw funds. Under Ackman’s management, PSH posted 17.1 percent in returns since inception (Dec. 2012-November 2017), 80 percent below the S&P 500.

Ackman began purchasing J. C. Penney in 2010, shares charged $22 on average for 39 million shares or 18 percent of J.C. Stock Penney. In August 2013, after an argument with fellow board members, Ackman’s two-year campaign to transform the department store came to an abrupt end after he agreed to step down from the board.

Pershing Square announced, in a statement dated 27 August 2013, that it retained Citigroup to liquidate the company’s 39.1 million shares at US$12.90 per share, a loss of approximately $500 million.

After Pershing Square created $4.5 billion in net profits in the 2014 period, LCH Investments called Ackman one of the world’s top 20 managers of hedge fund management, bringing life gains from its founding in 2004 until the end of 2014 to $11.6 billion.

On April 27, 2016, Ackman appeared before the United States Senate Special Committee on Aging, along with the outgoing CEO of Valeant Pharmaceuticals, J. Michael Pearson, and the company’s former interim CEO, Howard Schiller.

The testifying panel addressed questions related to the Committee’s concerns about the effect of Valeant’s business model and divisive pricing strategies on patients and the health care system. “Ackman opened his testimony saying, “As a Valeant shareholder, I agree my investment was an… endorsement of the strategy of Valeant.”

In March 2017, Ackman sold his remaining $27.2 million share position in Valeant to the Jefferies investment bank for around $300 million.

The overall expense of the position, including direct stock purchases and $9.1 million shares that were underlying stock options exchanged with Nomura Global Financial Products, was calculated to be $4.6 billion, resulting in a loss higher than the securities’ original price.

As of September 2020, Bill Ackman net worth is US$2.1billion, according to Forbes Magazine.

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Herbalife Short and Bill Ackman Net Worth

Ackman released a research study in December 2012 that was critical of the multi-level marketing business model of Herbalife, calling it a pyramid scheme.

Ackman announced that beginning in May 2012, his hedge fund, Pershing Square Capital Management, sold short shares of the company directly (not with derivatives), causing the stock price of Herbalife to drop.

The company reported results from a survey conducted by Nielsen Research International in January 2013 which found that 73% of Herbalife dealers never wanted to make any money by retailing the product.

The results are now available. Instead, they wanted to buy things at a discount for personal use. To make the distinction clearer, on its June 2013 earnings call, the company announced that it would continue to refer to these discount purchasers as “members” rather than “distributors.”

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In a public spat on national TV a few months after Ackman’s initial remarks, billionaire businessman Carl Icahn contested Ackman’s comments. Icahn purchased shares in Herbalife International shortly afterward.

The stock price continued to show strength as Icahn continued to acquire HLF shares. Icahn owned 16.5 percent of the firm by May 2013. By November 2013, the number had declined to 6.4 percent.

Ackman invested $50 million in 2014 on a public marketing campaign against Herbalife that was intended to hurt the stock price of the company.

Former Rep. Bob Barr (R-GA) called on Congress in his short campaign to examine the use of public relations and regulatory pressures by Ackman, and Harvey L. Pitt, a former chairman of the Securities
and Exchange Commission, questioned whether Ackman preferred to move the price rather than spread the facts.

Senator Ed Markey wrote letters to federal regulators in 2014, including the FTC and the SEC, asking that they launch an inquiry into the commercial practices of Herbalife. The day the letters were published, the stock of the company fell by 14 percent.

Later, Markey told the Boston Globe that his workers did not warn him of Ackman’s financially exploitative behavior and explain the letters in the light of consumer rights.

The New York Times reported in March 2014 that Ackman had used tactics to undermine public confidence in Herbalife to lower its stock price, including pressuring the company to be investigated by state and federal regulators, paying people to travel and participate in rallies against it, and boosting its spending on donations to non-profit Latino organizations.

Groups such as the Hispanic Federation and the National Consumers League have submitted multiple letters to federal regulators, according to the report. Each person interviewed by The Times admitted in interviews that after being lobbied by Pershing Square officials, they wrote the letters or claimed they did not recall writing the letters at all.

The team of Mr. Ackman also then started making donations to some of these organizations, including the Hispanic Federation, totaling around $130,000. The money he said was being used to help locate victims of Herbalife.

By December 2, 2014, from their January 8 high of $83.48, stock prices had fallen nearly 50 percent to $42.08. Later that month, a 2005 Herbalife distributor training session was published by Pershing Square Capital, in which an employee identified high turnover rates and suggested that the business model of the company was not sustainable.

The video had earlier been subpoenaed by federal prosecutors, according to an anonymous source speaking to the New York Post. Ackman predicted in an interview with Bloomberg that the firm would undergo an “implosion” in 2015 or early 2016, citing federal scrutiny and debt.

In its story of 12 March 2015, the Wall Street Journal reported that the prosecutors in the Manhattan US Attorney’s Office and the FBI investigate if Ackman “made false statements about Herbalife’s business model to regulators and others to spur investigations into the company and lower its stock price.”

District Judge Dale Fischer in Los Angeles, California, has denied a lawsuit by Herbalife investors, arguing that the firm operates an illegal structure with a pyramid. Herbalife stock grew by approximately 13 percent in reaction to Fischer’s ruling.

In July 2016, Herbalife and the FTC signed a settlement deal, ending the inquiry into the company by the regulator. Fortune claimed on the day of the settlement that Ackman lost $500 million.

In November 2017, Ackman told Reuters that he had covered his short-selling position, but he still bets against Herbalife, using put options, with no greater than 3 percent of the funds in Pershing Square.

On February 28, 2018, after the company’s stock price continued to grow, Ackman exited his near billion-dollar bet against Herbalife, opting instead to develop his place in United Technology.

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COVID-19 Response

Ackman hedged Pershing Square’s portfolio ahead of the 2020 stock market crash, risking $27 million to buy credit insurance, insuring the portfolio against steep market losses. The hedge was successful and in less than one month it produced $2.6 billion.

In June 2020, $3 billion was filed by Ackman’s Pershing Square Tontine Holdings, Ltd for the biggest ever blank-check company IPO.

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Style of Investment and Bill Ackman Net Worth

Ackman’s activities on Canadian Pacific Railways are characterized as the paradigm of ‘engaged activism’ by research published in the University of Oxford, which is long-term, with correlated benefits to the real economy, and distinct from ‘financial activism’ for a shorter term.

U.S. government leaders, heads of other hedge funds, numerous institutional investors, and the general public have admired and criticized Ackman’s investment style.

During the financial crisis of 2007-2008, his most notable market plays include the shorting of MBIA bonds, his proxy battle with Canadian Pacific Railway, and his stakes in Target Company, Valeant Pharmaceuticals, and Chipotle Mexican Grill.

Ackman kept a US$1 billion short against the nutrition company Herbalife from 2012 to 2018, a company he has said is a pyramid structure intended as a multi-level marketing company. His efforts were documented in Betting on Zero, a documentary film.

After poor results in 2015-2018, Ackman told investors in January 2018 that by cutting jobs, stopping investor visits that were eating into his time, and hunkering down in the office to do research, he was going to return to basics.

His Pershing Square company returned 58.1 percent in 2019 as a result of these reforms, which Reuters says qualified it for 2019 as “one of the world’s best-performing hedge funds.” Bill Ackman net worth saw a new direction.

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Philanthropy and Bill Ackman Net Worth

Ackman has donated $6.8 million directly to charitable organizations such as the Center for Jewish Heritage, where he led a successful campaign to withdraw $30 million in debt. The three largest individual donations the center has ever received were the donation and those of Bruce Berkowitz, founder of Fairholme Capital Management, and Joseph Steinberg, president of Leucadia National.

In New York City and Centurion Ministries in Princeton, N.J., Ackman’s foundation contributed $1.1 million to the Innocence Fund. He is a signatory of The Giving Pledge, pledging himself to give away at least 50 percent of his fortune to charitable causes.

The Pershing Square Foundation was established in 2006 by Ackman and then-wife Karen to foster creativity in economic growth, education, healthcare, human rights, the arts, and urban development. A large donor to Planned Parenthood is the cornerstone.

Since its inception, more than $400 million in grants have been committed by the foundation since 2006. In 2011, the Ackman’s were among the most generous donors on The Chronicle of Philanthropy’s “Philanthropy 50” list.

In July 2014, at a gala fundraiser at the Waldorf Astoria hotel in New York City, the Challenged Athletes Foundation, which offers athletic equipment to people with physical disabilities, honored Ackman for helping to raise a record $2.3 million.

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cover image: Bill Ackman Net Worth Valeant Pharmaceuticals’ Business Model. by Perisha Gates is licensed under CC BY-ND 2.0

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