Bill Ackman: Investment Strategy, What the Market is Missing, How AI Breaks Businesses

**Friedberg** (0:00)
One of the most provocative and interesting investors in the country.

**Chamath Palihapitiya** (0:04)
A legendary activist investor.

**Jason** (0:05)
Pershing Square CEO and founder, Bill Ackman.

**Bill Ackman** (0:10)
Taking a short position and going public with it is a pretty serious business.
Interestingly, some of the best businesses in the world are trading at the lowest multiples. We're kind of the rebirth of the closed-end investment company universe.

**Jason** (0:22)
What did you think of Zara, the CEO of OpenAI? I'm sorry, CFO.
Felt like the CEO.

**Chamath Palihapitiya** (0:29)
Stop with that stuff.

**Bill Ackman** (0:31)
Actually, I was super impressed. Made me a lot more bullish on OpenAI.
I thought she should be CEO of OpenAI.

**Jason** (0:39)
That's what I thought.

**Bill Ackman** (0:41)
I think Sam should be chair.

**David Sacks** (0:42)
There was a question I wanted to ask her that we didn't get time, which was what's it like working with Sam?

**Jason** (0:47)
I mean, that could have been three hours in a documentary.

**David Sacks** (0:52)
I wanted to kick this off.
Thank you so much for being here. We've tried a number of times to get you to All-In and it's great to finally have you. You obviously are a legend that doesn't need much of an introduction. Lately in the last number of, call it years or months or quarters or what have you, it seems like your investment philosophy may be changing. Your model where you've been an activist and you've entered positions and exited positions and lately you've talked a lot about more kind of permanent long-term holdings. We'd love to hear a little bit about if that is actually a change and how your evolution or your investment model has kind of changed over time.

**Bill Ackman** (1:28)
Sure. So I would say the biggest change over time is an appreciation for the importance of what you call business quality, long-term, durable, protected, non-disruptible growth. I would say early days, you're smaller, more liquid investor. You don't have to think as long-term as you become a bigger, concentrated investor.
Over time, you learn the importance of durable growth. That's the most important factor. I would say I'm as activist as I've ever been, but more of it's on Twitter than I would say in the corporate context. The reason for that is when I started at Pershing Square, no one sort of knew who we were. And so, I actually, one of our first investments was Wendy's International. Wendy's owned Tim Hortons, the Canadian coffee and doughnut chain. And the value of Tim Hortons was more than the entire value of Wendy's. So we had this very simple idea, buy Wendy's, spin off Tim Hortons, double our money. And we bought 10% of the company, and I called the CEO, and he didn't return my call. And I called him again, he didn't return my call. I literally couldn't get a return phone call from the beginning. So we actually called a friend who worked at Blackstone, and Steve Schwartzman agreed to write a fairness opinion on what Wendy's would be worth if we spun off Tim Hortons. We kind of mailed it in, filed it publicly, and six weeks later, they spun off Tim Hortons. And then the CEO finally called me back, and he thanked me.
And he had gotten fired.
But he thanked me because he had a huge exit package.
He was very happy. But so in the beginning, we couldn't get a return phone call, so we had to, and we were small, so we had to go to a conference, and we had to do presentations and go on CNBC. What happens over time is you join boards of directors, you become known as an investor. We're kind of a constructive shareholder.
I know pretty much every CEO in S&P 500, either directly or one person removed. And maybe I age, I've aged a bit, but you build kind of a reputation, and today we buy a stake in a company. Sometimes they'll put out a tweet saying, and we welcome Purchasing Square as a shareholder, but they open the door for us. In the beginning we had to bang down the door, and today. So we get very deeply involved in our companies if it's needed. Other companies we own, there's nothing for us to do, just be there, just clap.

**David Sacks** (3:46)
So you aren't considered a value-add investor?

**Bill Ackman** (3:49)
Yeah, but we only want to add value. The conversation last night was kind of an interesting one. You know, the best investments are one where you don't need to join the board and do anything.

**David Sacks** (3:57)
Well, that may be in a startup, but in a mature business it may be.