Inside Ackman’s $4 Billion Gamble

Bill Ackman in 2016
Photo by Bryan Bedder/Getty Images for The New York Times
William D. Cohan
June 16, 2021

For years, Bill Ackman wanted to be considered the Warren Buffett of his generation. On the face of it, the comparison seemed absurd. Buffett, after all, was the avuncular and frugal midwestern investing oracle whose portfolio reflected blue-chip totems of Rockwellian Americana—Coca-Cola, Geico, Kraft Heinz, Bank of America, GE, Goldman Sachs and, for a time, the Graham family’s Washington Post. Ackman, for his part, was a bombastic New Yorker famous in the public imagination for chest-thumping feuds with fellow heavyweight hedge fund peers like Dan Loeb and Carl Icahn.

Nevertheless, over the years, Ackman insisted on the Buffett analogy. In a 2016 deposition, he said he structured Pershing Square Capital, the hedge fund he founded in 2004, to be “similar to Berkshire Hathaway in terms of approach.” On a podcast last year, Ackman gushed that a major part of his investing education came from “reading everything Buffett’s written,” before recounting at length Buffett’s visit to Harvard Business School, Ackman’s alma mater, years earlier.

I’ve spoken to Ackman a number of times over the past decade, including during the two nadirs of his otherwise ascendant career, and at every point the conversation has returned to Buffett. The first time we discussed his Berkshire-sized ambitions was in 2013, shortly after Ackman found himself in a pitched battle with Icahn and Loeb over the fate of Herbalife, the publicly traded vitamin supplement company that Ackman believed was a fraud. Ackman bet more than a billion dollars of his own and his investors’ money that Herbalife stock would go to zero. (Our conversation came immediately after his famous brawl with Icahn on CNBC, which many consider among the greatest moments in business television history.) Of course, Icahn and Loeb got the better of Ackman on that one. They made gobs of money on Herbalife while Ackman lost nearly $1 billion.