Bill Ackman: the life of an exemplary hedge fund manager

A tall, good-looking billionaire, once elected as one of the most attractive men of Wall Street, and shining not only due to the profitability of his main fund, “Pershing Square Capital“, but for his philanthropy efforts, his way of detecting talent in people and of course, for his counter-attacks to the Herbalife company.

Bill Ackman in front of Perishi_wall street_patrick dwyer_american financial titans
Image courtesy of Insider Monkey at Flickr.com

Of course, not all of words are kind, as his main rivals in the world of finance have described him as hypocritical and even as arrogant and “dumb”, considering the fact that his position on Herbalife plays against the position of giants of the likes of Carl Icahn, Dan Loeb and George Soros.

But who is Bill Ackman, where does he come from and how is he, really?

William Albert Ackman was born on May 11, 1966. He comes from a Jewish family, but was raised in New York. His father was the president of Ackman Brothers & Singer, a mortgage broker in New York. Perhaps there lies the origin of his passion for finance.

He studied at Harvard and received his MBA from that same university.

Bill Ackman was the co-captain of the rowing team at Harvard and his first “scandal” was caused when he decorated the oars and team uniforms with the dollar sign.

In 1994 he married Karen Herskovitz, an architect with whom he has three children. They live in a luxury apartment building in the Upper West Side of Manhattan, an apartment valued at more than $5 million, and he also owns a mansion in the Hamptons which is worth $22 million. He has his own private jet, which cost about $32 million.

Bill Ackman’s beginnings

Ackman was very clear about what he wanted to do and how he wanted to do it. Right after finishing his MBA, he created his own fund along with a Harvard classmate, David Berkowitz. They called it Gotham Partners. In this sense, Ackman skipped many of the primary steps that are given by most Wall Street beginners.

He quickly proved his worth by getting his fund to go from $3 million to $300 million.

But even people like Bill Ackman come to experience failure at some point in their lives. They were forced to close their fund after buying a majority stake in a golf course. That is, they became owners of the company who owned the golf course, changing its name to Gotham Golf, and thinking not only about getting a return on investment through the fund, but to create their own big business around golf courses. They set out to buy several golf courses, so they accumulated a lot of debt.

They fought until the last moment to save that investment, and even thought of merging the golf company with another real estate company, but a judge rejected the merger and they had to return money to their investors.

That failure didn’t keep him from wanting to go on. In 2004, Ackman created his current hedge fund, the Pershing Square Capital, through which he began managing $54 million and today, with 51 employees, he manages over $11,000 million.

Ackman is known for taking long-term positions. He’s anti-diversification, so his fund consists of large amounts of capital in a few companies. One of his largest investments is in the Canadian Pacific Railway, a company that has given the fund a return of over a 100%. Ackman is also the largest shareholder of J.C. Penney Company. Generally speaking, one could say that the trajectory of Bill Ackman as an investor since his last fund was created, in 2004, is flawless, at least before he announced his investment of $1,000 million against Herbalife.

Herbalife_wall street_patrick dwyer_american financial titans_Bill Ackman
Image courtesy of Ernesto Flores at Flickr.com

His original techniques

Ackman is also known for his original ways to hire employees. Ackman is not looking for people with careers but talented people, which is why one of the first stock analysts of his current investment fund was a guy who once was his guide on a fishing trip. According to Ackman, that man was self-taught in finance issues. He had a passion for finance and, during the trip, he talked to him about the companies he liked and the ones he didn’t, which coincided with the views of Ackman on that matter. He did not hesitate to hire him.

He later hired a tennis pro and a guy he met in a taxi. We don’t really know if it was the taxi driver. We could say he’s a fan of finding and recognizing talent anywhere.

Moreover, Ackman watches his diet, he doesn’t give in to excesses and practices sports. He even claims to have played tennis with Andre Agassi. Everyone describes him as a very confident person, to the point of even being sure he’s made the right decision with Herbalife and his belief in the fact that the company’s value will soon be zero.

Ackman is certainly an interesting character that shows how easy it can be to multiply a fortune in a short period of time, if you are in the right place, in the right industry, and working with the right skills.

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