Bill Ackman is a self-made billionaire through operating the Pershing Square Capital Management hedge fund that he founded in 2004. He became famous for his short position on bond insurer MBIA in 2008 and 2009 and his rescue of mall operator General Growth early in his career.
He is usually contrarian in his trades and investments betting against companies by going short their stock when they are popular but he sees flaws in their business model. He also buys stocks when they are not popular if he sees potential unmonetized company value priced cheaply in their current stock price. He considers himself an activist investor creating change through his vocal involvement with the companies he has investment positions in.
He became more famous when he was featured in the Netflix documentary “Betting on Zero” explaining his public short bet on Herbalife.
Bill Ackman’s trade in March of 2020 made him one of the first traders with size measured in tens of millions to ever be known to return over 100 times his money in 10 days in a three week period at the beginning of the Covid-19 pandemic. Ackman turned $27 million in premium paid to buy credit default swaps into a profit of $2.6 billion. He reinvested most of that windfall in the long positions he held and wanted to protect by buying the insurance. Then during the April 2020 stock market rebound after the lows, he made approximately $1 billion more through the long positions he had hedged. Bill Ackman’s $27 million bet made $3.6 billion in total profits. His net worth increased over $1 billion in 2021.
Bill Ackman has had a lot of big wins and big losses in his professional investing and trading career and most were very entertaining to watch play out in real time as a big win or a big loss. Especially when other billionaires publicly take positions against him.
Bill Ackman’s fortune is closely tied to his hedge funds success in assets under management and quarterly returns based on his compensation tied to his funds performance.