In this episode, Pershing Square founder Bill Ackman said his concentrated portfolio holds 12–14 companies and has achieved a long-term compound return of about 16%. Speaking with Norway's sovereign wealth fund CEO Nicolai Tangen, he described a great business as one that would remain highly valuable even if markets closed for 20 years. Ackman also discussed his feud with Carl Icahn, his approximately $1 billion loss shorting Herbalife, and his work on brain injury recovery and brain-computer interfaces after his daughter's hemorrhage.
At a Glance Bill Ackman, in a podcast, elaborated on his concentrated investment and permanent capital strategy. His Pershing Square has achieved a long-term compound annual return of 16%, with a portfolio holding only a very small number of companies. He believes that great businesses should have a
The guest in this episode is Pershing Square founder Bill Ackman, in conversation with Nicolai Tangen, CEO of Norway's sovereign wealth fund. Ackman elaborates on his concentrated investment strategy—the portfolio holds only 12-14 companies, with a long-term compound return of approximately 16%. He defines a "great business" as one you would still be confident is highly valuable even if the market were closed for 20 years. He explains why he no longer needs "door-busting" activism and the competitive advantage of permanent capital. He also shares how a personal tragedy—his daughter's severe brain injury from a hemorrhage—prompted him to invest in brain injury recovery and brain-computer interfaces. Ackman emphasizes that seeking out the best short-sellers to challenge his investment convictions is the best way to get closer to the truth.
Ackman's definition of a great business is remarkably concise:
> "You buy a business today, the market can close for 20 years, and you still know with very high certainty that what you own in 20 years will be extremely valuable."
This definition excludes companies that rely on short-term market sentiment, macroeconomic fluctuations, or regulatory changes. Ackman emphasizes that the core of a great business lies not in its industry, but in its business structure:
How many such businesses exist globally? Ackman believes there are approximately 200-300 truly great businesses, but opportunities to buy them at reasonable prices are rare — which is precisely why the Pershing Square portfolio is so concentrated.
Ackman points out that most investors want to "get rich quick," whereas concentrated investing is a long-term strategy. More critically, there are structural barriers:
| Factor | Explanation |
|---|---|
| Short capital duration | Most capital in the asset management industry can be redeemed by the minute, day, quarter, or year |
| Leverage constraints | Highly leveraged institutions like Citadel and Millennium cannot tolerate high volatility |
| Scarcity of permanent capital | Implementing this strategy requires permanent capital, like Buffett's |
Ackman regards Buffett as a role model: In 1969, Buffett gave up his hedge fund's profit share (25% of returns exceeding 6%), took a $100,000 annual salary to take over a textile mill (the predecessor of Berkshire Hathaway), in exchange for permanent capital. "Permanent capital is a huge competitive advantage — we were able to deploy capital aggressively during COVID because we didn't have to worry about redemptions at the end of the month."
Ackman displayed a "stone" board of investment principles (actually heavy plastic), with core elements including:
Pershing Square has 48 people in total, of which 9 are investment professionals. Unlike traditional hedge funds:
| Traditional Structure | Pershing Square Structure |
|---|---|
| Portfolio manager + analyst team | One portfolio, 12-14 investments |
| Analysts compensated based on individual P&L | Everyone compensated based on overall portfolio performance |
| Analysts compete for capital allocation | No one has individual capital allocation interests |
Process: Weekly formal meetings + almost daily lunches. When an idea emerges (e.g., a company tracked for years trades at a 40% discount due to an earnings miss), it is typically researched in depth by two people, with Ryan Israel (CIO) and/or Ackman involved in part of the work, while the rest of the team has not done the homework. The research team creates a PPT to present to the entire team, and decisions are made collectively. Ackman has the final say, but there has not been an investment in the past decade that lacked collective consensus.
Ackman met Brookfield CEO Bruce Flatt during the bankruptcy restructuring of General Growth and developed a long-standing respect, but never invested. It was only after Brookfield transitioned to a more asset-light, royalty-style business model that due diligence began — taking several months, because Brookfield's structure is complex, which is also one of the reasons for its undervaluation.
Ackman described himself as a "former" activist investor. The change lies in:
Ackman observed that in the past, when high-quality companies missed earnings expectations, their stocks fell 3-4%; now they can fall 30-40%. Reasons:
This creates opportunities: High-growth, durable companies trade at a discount due to short-term disappointments. The management teams of the current portfolio companies are all highly respected, "requiring little activism."
Ackman believes activism is essential to market health—as indexation and passive investing increase, without shareholder oversight of management, corporate governance issues could arise. He reviewed the history: from the era of large shareholders like J.P. Morgan and Carnegie monitoring management, to the deterioration of corporate governance in the 1970s-80s, and then to the changes driven by figures such as Mike Milken and Carl Icahn.
Ackman recounts two confrontations with Icahn:
1. 1998 Transaction: Ackman sold shares of Hallwood Realty Partners to Icahn at a price above market but below intrinsic value, and included a "Schmuck Insurance" clause — if Icahn sold at a premium within three years, Ackman would receive 50% of the excess profit. Icahn sold within two years, owing Ackman approximately $4.5 million, but refused to pay. Ackman sued and won, but Icahn used judicial procedures to delay the case for 6-7 years (appealing on the last day each time), and Ackman ultimately recovered the principal plus interest.
2. Herbalife Short: In retaliation, Icahn went long on Herbalife without conducting due diligence, successfully squeezing Ackman's short position. Ackman lost approximately $1 billion.
Ackman believes AI is shortening the time horizon of market participants — 10-K reports can be read instantly by AI after release, with vast amounts of capital seeking short-term advantages. However, this also creates opportunities: when a company announces a sharp increase in capital expenditure due to strong demand and its stock price falls instead, Pershing Square chooses to buy.
Current AI-related holdings in the portfolio (approximately one-third):
| Company | Entry Timing |
|---|---|
| Amazon | After Trump announced the "Liberation Day" tariffs |
| Meta | After disappointing the market with commitments to large capital expenditures |
| Microsoft | Also after the stock declined due to capital expenditure exceeding expectations |
Ackman’s core judgment:
> "If intelligence is a competitive advantage, and intelligence becomes a commodity, what is left? It is creativity."
He argues that LLMs can read all existing knowledge but cannot produce Einstein-style 'flashes of insight' (E=mc², relativity). The remaining space for humans is creativity. AI may bring abundance — an explosion of entrepreneurship and accelerated global GDP growth.
Ackman spends time on X daily (mainly in the mornings and evenings), believing this gives him a 1-2 week lead over traditional media. He follows approximately 1,000 people, covering a range of viewpoints.
Key method: For each issue, he identifies the most articulate voices on both sides and listens to them simultaneously. He believes traditional media all have owner biases, whereas X provides a more open information ecosystem.
> "What is the best way to gain conviction in an investment? Find the best short seller in your position and listen to their arguments. If you can refute every argument, you can have greater confidence in your investment."
Ackman believes that listening to opposing viewpoints is the best hope of getting closer to the truth. He even suggested that X add a button allowing users to see the most popular counterarguments on the same topic.
Ackman says he is "naturally wired this way" — in his high school yearbook, a friend wrote, "A closed mouth catches no flies." One of his life's driving forces is achieving independence so he can say what he wants. Steven Pinker advised him to join X to learn; he initially only learned, later found value in sharing his views, and now has nearly 3 million followers.
Ackman explains why he is dissatisfied with the situation at Harvard:
Core concern: An institution to which he has devoted six years and holds deep affection is deteriorating.
Ackman's 26-year-old daughter suffered a brain hemorrhage due to an arteriovenous malformation (AVM) and was not discovered in her apartment for nearly 19 hours. Most people would die or suffer permanent disability. Ackman made "restoring her" a major life goal.
After in-depth research, he discovered a "nihilism" in the fields of neurosurgery and neurorehabilitation — doctors do not believe they can do much. However, his daughter is recovering: her cognitive function is normal, and she is relearning to speak and walk. The greatest challenge is optic nerve damage, resulting in approximately 98% vision loss.
The episode notes say Ackman discusses a family tragedy earlier in 2026 and what it led him to focus on. The supplied transcript excerpts do not provide enough detail to verify the draft's account of a biotechnology campus or its proposed research.
| Advice | Ackman's explanation |
|---|---|
| Consider your circle | People tend to be influenced or inspired by those around them. Ackman recalls that competitive school friends helped motivate him to earn good grades. |
| Read extensively | He compares consuming information to training a model and says he does not know a highly intelligent person who has not read extensively. |
| Pursue interests | He encourages young people to focus on subjects they are passionate about, whatever the field. |
| Attend to health | He stresses nutrition, exercise and sleep; advises against consuming much alcohol and says skipping it is preferable if possible. He calls sugar poison and endorses weightlifting for confidence, appearance and health. |
| Develop character | Recalling Buffett's advice, he cites punctuality, responding to others and doing the right thing when nobody is watching as qualities people can choose to adopt. |
| Choose a partner carefully | He calls the choice of a life partner one of life's most important decisions, advising thoughtfulness without rushing or taking too long. |
Ackman says he considers the U.S. a benign, though imperfect, global actor whose goals and principles he regards positively. He argues that the U.S. should maintain leading military, AI and nuclear capabilities as a deterrent, and identifies radical Islam as a threat to the West. These are his views expressed in the interview.
Ackman says he generally prefers one share, one vote and avoids controlled companies, partly because shareholders' ability to weigh in can impose discipline. He can nevertheless be comfortable with a controlled company when its controlling shareholder is an exceptional CEO, while expressing uncertainty about control passing to a founder's successor.
He describes passion, intelligence, energy and leadership as qualities of a good CEO. For Pershing Square, however, he says business quality, growth and durability generally matter more: the firm may be able to help recruit a better CEO if the incumbent is unsuitable. He adds that a great business with an exceptional CEO is not often available at an attractive price, in his view.
Ackman says Amazon, Meta and Microsoft together represent approximately one-third of the portfolio; he does not give individual weights in this discussion.
| Company | Guest’s account | Context and data |
|---|---|---|
| Brookfield | Describes the investment and due diligence | Shift toward an asset-light, royalty-like business; months of work on its complex structure. |
| Amazon | Says Pershing Square bought shares | After the “Liberation Day” tariff announcement; part of the three-company aggregate above. |
| Meta | Says Pershing Square bought shares | After the market reacted negatively to capital expenditure commitments; part of the aggregate above. |
| Microsoft | Says Pershing Square bought shares | Capital expenditure to meet product demand; part of the aggregate above. |
| McDonald’s | Discusses its business model | Real estate and franchising, alongside the restaurant business. |
| Howard Hughes | Describes control and a planned transformation | Discusses real estate, insurance and the analogy with Berkshire. |
| Herbalife | Previously shorted; says Pershing Square lost approximately $1 billion | Recounts Icahn’s opposing position and the short squeeze. |
| Hallwood Realty Partners | Previously held and sold shares | Recounts his transaction and subsequent litigation with Icahn. |
1. Testing an investment view: Ackman suggests listening to the strongest short seller's arguments against a holding. He says rebutting each argument can increase confidence, and applies the same principle of hearing opposing views beyond investing.
2. Business quality and concentration: Ackman describes a great business as one he could buy and still expect to be enormously valuable after markets had been closed for 20 years. He says Pershing Square favors businesses resembling royalty collectors or annuities, with durable growth and cash generation that does not need to be reinvested in the business. He considers business structure more important than the industry alone.
3. Permanent capital and investment flexibility: Ackman considers capital that cannot readily leave a significant competitive advantage. In his account, Buffett gave up more favorable hedge-fund economics and returned capital to investors in exchange for permanent capital through Berkshire. Ackman says this trade-off reflected Buffett's concern that a capital base able to disappear could impair long-term compounding. He also recounts that Pershing Square was able to deploy capital aggressively during COVID.
4. Character and conduct: Recalling Buffett's advice, Ackman says qualities such as punctuality, responsiveness and doing the right thing can be adopted through a decision. He contrasts this with the exceptional talent and work required to become an athlete such as Michael Jordan.
Source note: The company name Hallwood Realty Partners follows Pershing Square’s [public statement](https://www.prnewswire.com/news-releases/pershing-square-capital-managements-bill-ackman-responds-to-carl-icahns-comments-on-herbalife-188292331.html). That statement dates the transaction to 2003, differing from the 1998 recollection in this episode’s transcription.