Bill Ackman Has Very High Regards For Warren Buffett
Activist investor, Bill Ackman, has a lot of respect for the Oracle of Omaha, Warren Buffett. According to Ackman, Buffett has been his professor and the structure of Pershing Square is modeled on that of Berkshire Hathaway, which Buffett runs. Although Buffett is no longer an activist, Ackman says he once was, citing Buffett’s past activist involvements.
Seeking hidden value
There are various ways in which Ackman says his investment strategy is similar to that of Buffett. For instance, like Buffett, Ackman also buys stakes in companies with the aim of improving them. Usually, the focus is on companies that are poorly run or underperforming.
Management and capital allocation
The other way in which Ackman is similar to Buffett is that they both pay greater attention to the management and capital allocation strategy in the companies they invest in. They are interested in a management team that is able to generate good returns for investors through proper use of cash, debt and stock moves.
Like Buffett, Ackman also takes permanent stakes in publicly traded companies with a brighter, long-term future. Recently, Ackman said he would hold Howard Hughes Corp. forever. Howard Hughes is a real-estate company that has separated from General Growth Properties Inc, a mall operator.
Ackman’s Pershing Square Capital Management LP owns assets worth $19 billion. The activist investor has been fond of drawing a comparison between his investment strategy and that of Buffett since the IPO of Pershing Square Holdings.
Activism in Buffett
Although Ackman is best-known for his activism, he says he doesn’t always seek a fight at least, citing his investments in companies such as Zoetis Inc and Air Products and Chemicals Inc. In the two companies, he reached an agreement with the management to appoint his lieutenants on the board. However, Ackman says Buffett was once an activist too, citing Buffett’s involvement with Sanborn Maps and Dempster Mill Manufacturing in the past.
Respect for 3G Capital
The other firm that Ackman professes respect for is 3G Capital, which is a private-equity firm. 3G Capital and Buffett’s Berkshire teamed up to buyout H.J. Heinz. Ackman has a stake in 3G Capital’s other holding, known as Restaurant Brands International.
Latest posts by Neha Gupta (see all)
- Is Facebook Inc (NASDAQ:FB) Winning Or Losing In Virtual Reality Space? - May 27, 2016 07:35 AM PDT
- No Growth In Costco Wholesale Corporation (NASDAQ:COST)’s 3Q Comps Explained - May 27, 2016 07:34 AM PDT
- How Will International Business Machines Corp. (NYSE:IBM)’s Big Data University Help? - May 27, 2016 07:33 AM PDT