Bill Ackman Looks to Buffett for IPO Inspiration

In a recent online roadshow, Bill Ackman, the founder of Pershing Square Capital Management, revealed that Warren Buffett has significantly influenced his approach to building his hedge fund over the past two decades. Ackman shared how his exploration of value investing led him to discover Buffett's early partnership letters, which highlighted Buffett's beginnings as an activist investor before he transitioned to managing Berkshire Hathaway in the 1960s. This narrative inspired Ackman to aspire to manage a permanent capital entity akin to Buffett's model. Ackman has made substantial progress toward this ambition, with nearly 90% of Pershing Square's assets now structured in a permanent capital format. As of June, the firm managed $18.7 billion, primarily through Pershing Square Holdings, a $15 billion closed-end fund traded in Europe. This structure allows Ackman to mitigate the unpredictability associated with traditional hedge funds, where investors can withdraw funds at any time, creating challenges for long-term investment strategies. He emphasized the difficulties of managing a portfolio under such conditions, noting that the ability for investors to pull out their money can adversely affect returns. Ackman expressed his desire to emulate Buffett's investment philosophy as efficiently as possible, highlighting the importance of stability in capital management for long-term success. A self-proclaimed "Buffett devotee," Ackman has regarded the 93-year-old investment legend as an unofficial mentor. He has actively participated in Berkshire Hathaway's annual meetings, further solidifying his admiration for Buffett's investment principles.