What’s up with Bill Ackman?

Rob Armstrong (0:00)

Hey, listeners, Rob Armstrong here. Next week, I'm joining FT colleagues from around the world to answer your questions about the recent turmoil in markets and what happens next. And if you are an FT subscriber, you can submit questions and register for the event at ft.com/marketswebinar. That's ft.com/marketswebinar. See you there.

Pushkin. James, in 30 seconds, please explain to our listeners, who is Bill Ackman, but use only adjectives.

James Fontanella-Khan (0:56)

Rob, you're putting me on the spot. Provocative. Aggressive. Controversial. And just a bit of a maverick.

Rob Armstrong (1:10)

Yeah. I would have started with Rich, myself.

James Fontanella-Khan (1:14)

Is he?

Rob Armstrong (1:16)

I think so. This is Unhedged, the Markets and Finance podcast from the Financial Times and Pushkin. I am Rob Armstrong coming to you from Unhedged World Headquarters in New York, joined by one of our regular guests, James Fontanella-Khan, the FT's US Deals Guru.

James Fontanella-Khan (1:36)

Something like that.

Rob Armstrong (1:38)

Something like that. Today on the show, we're talking about Bill Ackman, a very famous investor who has had some high highs, and has recently had what looks like a low, low. He had a big plan that, if I understand the news correctly, has fallen apart completely. At one point early in the summer, he had plans of raising $25 billion for a new investment vehicle, Pershing Square USA, and now he is planning to raise $0. Am I getting this right?

James Fontanella-Khan (2:12)

That is partially correct.

Rob Armstrong (2:14)

Okay.

James Fontanella-Khan (2:15)

Rob, we do not want to get sued here, so you've got to be careful. That's why our listeners can't see us, but I've got all these papers to make sure I get everything correct.

Rob Armstrong (2:23)

The details correct.

James Fontanella-Khan (2:24)

But jokes aside, yeah, he was planning to raise in June about, so he sold a 10% stake in this vehicle to a bunch of investors. That was the first step to then actually IPO this vehicle. He sold 10% for at about $10 billion valuation, but the goal was to raise way more. Our colleagues have covered this whole story very deeply, and Antoine Gare had the scoop that he wanted to get to $25 billion. He has built a huge following on Twitter. Particularly, he was very vocal following the October 7 Hamas attack in Israel.

He was very vocal against a number of university bosses in the US who he felt that were not doing enough to combat anti-Semitism on campus. Then more recently, he endorsed Trump. So a lot of people saw this a bit as a MAGA trade.

Rob Armstrong (3:22)

But this was always a very vocal guy. A big part of his story is that he shouts his trades from rooftops. I remember he had this big short trade on Herbalife.

James Fontanella-Khan (3:37)

Big time.

Rob Armstrong (3:38)

And he said, this is a patriotic short. And he made a huge deal of it and hyped it up. And that one didn't work well. But at other times, they worked brilliantly. He made some brilliant calls during the great financial crisis. He made some brilliant calls during COVID.

James Fontanella-Khan (3:53)

Absolutely.

Rob Armstrong (3:54)

Buying hotels. And so part of his magic as an investor is knowing when to kick up a lot of dust and make a big fuss.

James Fontanella-Khan (4:03)

A hundred percent.

Rob Armstrong (4:04)

But this time sounds a little different. It has a kind of internet character, political character, something going on.

James Fontanella-Khan (4:11)

Well, I mean, his vision was to kind of create the new version of Bertrand. Like some people called him in the past, the mini Buffett. He was trying to become the new Buffett in many ways.

Rob Armstrong (4:26)

Yes.

James Fontanella-Khan (4:27)

And in his vision, he also wanted to have a big festival for people to kind of talk about investments, ideas, and like... I hate using this term, but I think he wanted to democratize investment to some extent. And the idea of creating this vehicle was also like, so that he could talk even more freely about his investment ideas.

Rob Armstrong (4:49)

You know what this reminds me of? Roaring Kitty.

James Fontanella-Khan (4:53)

You said it.

Rob Armstrong (4:55)

I said it. I mean, I'm just saying the similarities are this idea of democratizing, this idea that the investment world is somehow hidebound, institutionally calcified, and that the little guy and the representatives of the little guy can kind of take a revolutionary posture and open it up and allow the truth to be told. And this was, and you know, there was, we've talked about the great movie that was made about Roaring Kitty on this show. This sounds like something that has that flavor, especially because social media plays such a big role.