- In today’s CEO Daily: Diane Brady examines Bill Ackman’s effort to build a modern-day Berkshire— without the folksy charm.
- The big leadership story: Anthropic is giving companies an early look at its most advanced AI model.
- The markets: Stocks skyrocket globally on news of a U.S.-Iran ceasefire deal.
- Plus: All the news and watercooler chat from Fortune.
Good morning. Is Bill Ackman like Warren Buffett?
The CEO of Pershing Square Capital Management cited a desire to unleash “long-term value” when making yesterday’s $64 billion
bid to acquire Universal Music Group. He’s long admired the chairman of
Berkshire Hathaway, who handed the CEO role to
Greg Abel earlier this year. And Ackman revived talk of
creating a modern-day Berkshire last month when filing to list Pershing with a new fund on the New York Stock Exchange.
As investors look at Pershing’s impending IPO as an alternative to Berkshire in the world of value investing, it’s worth comparing the two men and the companies they’ve built.
Investing Approach – Buffett has a six-decade track record of 20% compound annual returns to investors, roughly double the S&P 500. Ackman’s hedge fund has delivered similar returns since its 2004 launch, not including fees. But it’s a choppier journey when you’re an activist investor who names enemies, looks for problems to fix and wages war in public. Pershing’s turnover is double that of Berkshire, though both are relatively low, and it’s a fraction the size. Ackman’s focus on fee growth and asset management is also more akin to
Blackstone than Berkshire. Capital can be more nimble than a conglomerate. But Ackman’s UMG bid reinforces a philosophy embraced by Buffett, who prefers to buy
“wonderful businesses at fair prices” and work privately with
management to unlock value.
Personal Brand – The differences in temperament and tactics are stark. It’s hard to compete with a billionaire who clips McDonald’s coupons and still lives in the house
he bought for $31,500 in 1958. While Ackman says he turns off lights and drives around to
look for cheap parking, I know who I’d cast for the role of George Bailey in
It’s A Wonderful Life. Among other things, Buffett is
polite,
down to earth, and feels a civic duty to
pay higher taxes. Ackman is more polarizing, using his platform to condemn
DEI as anti-capitalist, speak out
against tariffs,
bet on political races, and take a hardball approach to
“fixing things.” An everyman, he’s not. Ackman’s unsuccessful campaign against Herbalife
made him look out of touch, at least to those of us who had plenty of experience with multilevel-marketing companies.
Still, track record tends to trump personality when it comes to making money. Shares in
Fannie Mae and
Freddie Mac jumped 40% the day after Ackman
called them “stupidly cheap.” Those who love Ackman, vitriol and all, probably don’t care if he morphs into Berkshire’s model as long as he delivers results.
Contact CEO Daily via Diane Brady at diane.brady@fortune.com
