Billionaire Bill Ackman makes big move to be next Warren Buffett

Bill Ackman first heard about Warren Buffett when he was 20. Four years later, he read his first Berkshire Hathaway shareholder letter, and something clicked. “I was inspired to become an investor,” the hedge fund manager recalled.

Three decades and billions of dollars later, Ackman is making bold moves to follow in Buffett’s footsteps.

“I thought that perhaps some day I could build a diversified holding company like Berkshire with an extraordinary long-term record,” he said in an X post in February.

On May 5, his Pershing Square Capital Management announced a $900 million deal to acquire 9 million newly issued shares of Howard Hughes Holdings  (HHH) , a company Ackman plans to turn into a “modern-day version of Berkshire.”

In 1965, legendary investor Warren Buffett bought control of Berkshire Hathaway, then a struggling textile manufacturer. He gradually sold off the textile businesses and invested heavily in insurance, utilities, retailing, and other businesses.

“Fortunately, our starting base of assets won’t be a dying textile company, but a very good business,” Ackman wrote. “We will adopt similar, long-term, shareholder-oriented principles to Berkshire, and we intend to hold the stock forever.”

Months later, Ackman gets his deal

Ackman has been working on the deal for months. He initially proposed buying 10 million shares for $900 million in February, but Howard Hughes rejected the offer, calling it “not acceptable in its current form.”

Under the new agreement, Ackman will still invest $900 million, but for 9 million shares instead of the 10 million he initially proposed.

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The agreement will increase Pershing Square’s stake in Howard Hughes to 46.9% from the 37.6% it currently owns, according to a statement.

“HHH has built substantial value for shareholders in recent years that has largely gone unrecognized,” Ackman said. He attributed this to the high cost of capital the market assigns to the company because of its focus on real estate development.

As part of the deal, Pershing Square will provide Howard Hughes with investment, advisory, and other services, including help with deals, capital markets, and risk hedging.

Howard Hughes will pay a $3.75 million base fee each quarter, plus a 0.375% fee on any increase in market cap above a reference value based on 59.4 million shares at $66.15 each.

Ackman was on Howard Hughes’ board for more than a decade before stepping down as chairman last year. He’s now coming back as executive chairman, with Pershing Square’s Ryan Israel to become chief investment officer.

Howard Hughes’ current leadership, led by CEO David O’Reilly, will stay in place.

Pershing Square’s stake in Howard Hughes will be capped at 47%, with voting power limited to 40%, according to the companies.

Howard Hughes stock rose 2.86% on May 5 following the news. The stock is down more than 8% year-to-date.

What are Ackman’s latest buys?

Ackman built his reputation as an activist investor, famously earning $2.6 billion from his efforts to overhaul Canadian Pacific Railway between 2011 and 2016.

But not every bet paid off — he lost over $1 billion shorting Herbalife in 2018. By 2022, he said he was done with activist short-selling, calling it the “noisiest form of activism.”

Ackman now runs a highly concentrated portfolio, typically holding just eight to 12 stocks at a time.

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Ackman said in April that Pershing Square began buying Hertz  (HTZ)  stock late last year and now owns 19.8% of the company. He also disclosed in February that Pershing had accumulated 30.3 million Uber  (UBER)  shares.

In the fourth quarter of 2024, Ackman added 2.5 million Nike  (NKE)  shares, making it his biggest buy that quarter. He started a position in Nike in mid-2024 and added 13.2 million more shares in Q3, despite the stock dropping 30% that year.

Ackman also picked up two other stocks in Q4: 2.1 million shares of Brookfield Corp. BN, a Toronto-based real estate and infrastructure firm, and 2.9 million shares of Seaport Entertainment  (SEG) , a company spun off from Howard Hughes in 2024.

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