William A. Ackman or commonly known as Bill Ackman (born 11 May 1966, New York) is the major investor, founder and CEO of hedge fund Pershing Square Capital Management LP.[1] At one point in December 2007 his funds owned a 10% stake in Target Corporation, valued at $4.2 billion[2] through the purchase of stock and derivatives.[3] His funds now own a 7.8% stake.[4] In December 2010, his funds held a 38% stake in Borders Group and on December 6, 2010, Ackman indicated that he would finance a buyout of Barnes & Noble for US$900M.[5]
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Ackman was raised in Chappaqua, NY. He received a Bachelor of Arts degree magna cum laude from Harvard College in 1988, and an MBA from Harvard Business School in 1992.
In 1992, Ackman co-founded Gotham Partners with another Harvard graduate.[6] By 1998, the firm had more than $500M in assets.[6] In 2003, the New York Attorney General investigated whether the firm had engaged in illegal practices for publishing its own research reports on stocks in which it has taken either a long or short position.[6] The litigation concluded that the firm had committed no wrongdoing.[6] Gotham Partners mainly invested in non-publicly traded companies and real estate concerns.
Ackman's Pershing Square Capital Management has in the recent past acquired positions in Wendy's International Inc., McDonald's Corporation, J.C. Penney, General Growth Properties, Borders Group, Fortune Brands, Ceridian Corp and Alexander & Baldwin., pressuring the management of those companies to improve profits by selling either real estate assets or corporate divisions. The investment company in turn benefits when the asset liquidation returns capital in the form of dividends and a higher share price, whereby Pershing divests itself of its holdings at a higher share price. In the case of Wendy's International, Wendy's management bought back shares following the forced sale of the their subsidiary Tim Hortons through an IPO, while Pershing unloaded most of their shares.[7]
In 2002, Ackman began research which concentrated on challenging MBIA's AAA rating, despite an ongoing probe of his trading by New York State and federal authorities. He was charged copying fees for copying 725,000 pages of statements regarding the financial services company, in his law firm's compliance with a subpoena.[8] Ackman has called for a division between MBIA's bond insurers' structured finance business and their municipal bond insurance side, despite statements from the insurance companies that this would not be a viable option.[9]
He argued that the billions of dollars of CDS protection MBIA had sold against various mortgage backed CDOs was going to be a problem. He also argued that it was not proper for MBIA, which was legally restricted from trading in CDS, to instead do it through a second corporation, LaCrosse Financial Products, which MBIA described as an "orphaned transformer." Ackman bought credit default swaps against MBIA corporate debt as a way to bet that it would crash. When MBIA did, in fact, crash as the financial crisis of 2008 came to a head, he sold the swaps for a large profit. Through the years, Ackman attempted to warn regulators, rating agencies and investors about the bond insurers' high risk business models.[10] The story of Ackman's battle with MBIA was turned into a book called Confidence Game (Wiley, 2010) by Bloomberg News reporter Christine Richard.
Pershing Square IV was established to bet solely on the rise of the stock of Target Corporation. The fund fell nearly 90% in 2008 and Ackman apologized for the losses.[11] The fund subsequently rebounded to some extent. Ackman said in a February 2009 letter to investors, “Bottom line, PSIV has been one of the greatest disappointments of my career to date."[11]
Bill Ackman's Pershing Square filed for 16.5% stake holding in JCPenney on 8th Oct 2010
Ackman runs Pershing Square as an activist hedge fund, meaning he invests in very few companies and plans to "actively" change them from the inside, by getting a seat(s) on the company's board of directors.
So far investors are confident about Ackman's plans for JCPenney.
On October 28, 2011, In a 13D regulatory filing, Pershing Square Capital indicated it owned 12.2% of Canadian Pacific Railway. Canadian Pacific Railway, also known as CP Rail, is one of two major Canadian railroads.[12] [12]
In conjunction with other members of the Ackman and Ziff families, William has given to charitable causes such as the Center for Jewish History to preserve Jewish genealogy. In the press release, the Ackman family stated, "We want our children to know, not only their living relatives, but those representing past generations for a greater connection to their family and ancestral origin and heritage."[13]
He married Karen Ann Herskovitz, a landscape architect, on July 10, 1994.[14] His father is Lawrence Ackman, the chairman of a New York real estate financing firm, Ackman-Ziff Real Estate Group.[15]