All-In Liquidity: Pershing Square CEO Bill Ackman Unlocks Retail Investor Access

Nice to see you.

I think it's a great summit, actually. And they're good at asking questions. It's one thing when you have one interviewer. It's another thing when you've got four guys kind of coming at you. So, it's a good challenging dynamic, I think.

I mean, our model is to find the best businesses in the world, hopefully even briefly at some of the attractive valuations, right entry price, and then be a long-term investor.

Well, with the help of the New York Stock Exchange, we listed a company called Pershing Square USA, which is a closed-end investment company, and it will be a basically a mirror image of our other vehicles that historically have only been offered to either offshore investors or institutional or super high net worth investors. And this will be an entity that anyone with $41 can buy one share.

So, our business model really requires long-term money, and the traditional hedge fund model where people commit capital for a couple of years, they can redeem a certain amount each quarter, is fine for a trading strategy. But when you're a long-term investor, you buy big stakes in companies, you join boards of directors, you get to spend time with management teams helping them with their long-term strategic direction. You don't want money that can leave overnight. So, the beauty of a public company, which is what a closed-end investment company is, is while investors have daily liquidity, they can buy and sell their shares, the capital is forever, basically. And that gives us the ability to make long-term investments in a world which is becoming increasingly short-term.

And by the way, we also took another company public at the same time. A company called Pershing Square. So, we actually go by the name Pershing Square instead of Pershing Square Capital Management. That's now a subsidiary of our public company. Pershing Square is the management company, the GP, as some people call it, or the alternative asset management firm that manages the company I work for, the company I'm CEO of. And it's a very interesting business because it's a business that, you know, Blackstone, KKR, you've seen other alternative asset managers. What's unique about ours is that the capital is permanent. And so, the company itself receives fees based over time on a growing base of assets that grow not by fundraising, although we can certainly launch new funds, but by the compounding. If we have a great year this year, our AUM grows, our fees grow, and the profits of the company grow. So, they're both interesting companies. One is a diversified Pershing Square portfolio of securities. The other's an operating business.

Sure. So, I would say, look, I think I've always thought that the standard for someone making an investment should not be how much capital they have. But if you want to have a standard that's based on a certain level of investment experience, the test today is really generally based on net worth. I think you should be able to take an effective test. You pass the test, you can become a qualified investor as opposed to having a certain amount of capital. You know, I think SpaceX is, it sounds like the IPO is going to launch later this week. It's an amazing company built over a long period of time by Elon Musk. But the public market investors are getting in quite a bit later in the story than investors. The amount of wealth created here for people who had the opportunity to invest over time. But those investors had to be accredited sophisticated. So, I think if there's a way to provide more access to companies before they become valued at $2 trillion, I think that would be good for America.

It's really, I think it's hard to make a statement on the overall market because it's really a bifurcated market. We're finding a lot of really cheap stocks in a market that's hitting new highs, which is sort of an interesting dynamic. And a lot of the attention is on semiconductor memory chips, IPOs that are coming, and a lot of attention's been taken away from companies that people think are almost old-fashioned. Meta is an old-fashioned company today. Microsoft is an old-fashioned company today and therefore they're less interesting. It's not where the excitement is. The result of that is those stocks are very cheap.

So, we're finding a lot of cheap stocks and, you know, query whether there's some overvalued ones, which of course there are.

Yes.

It could be. The market's got kind of two components to it. You have the ownership of stocks. You've got this growing index ownership, which is an incredibly important phenomenon. Today, if you're not in the stock index, your valuation is going to be... You have two companies. McDonald's, for example, is in the S&P 500. Restaurant Brands, which is Burger King and Tim Hortons and others, is not because it's a Canadian company. It's not in the index. It has relatively limited index ownership. Arguably, it's growing faster. It's a more diversified business. You can make some arguments for why it should trade at a higher multiple than McDonald's, but it trades at a very significant discount. Why? Because it's not in the index. So, you have more and more index capital, and that's become an increasingly important thing. In addition to the stocks that are actually in the index, actual ownership of index funds, there are a lot of investors who follow the index. So, a huge amount of capital is in a very stable format, this sort of index ownership. And then, there's also a lot of capital invested by so-called pod shops, Millennium and Citadel and others. They've been taking on increasing amounts of capital. And they have much shorter-term mandates. And they're the marginal buyer and seller of many securities. And the result is really more volatility. Because the way those models work is you have very tight risk limits. And if you're going to lose more than a certain amount of money, you're out. And what that leads to is even very big companies' stocks can move dramatically if they miss an earnings expectation or they change their guidance or there's some news event. And you've seen a huge amount of volatility, and geopolitics adds to that volatility. And of course, midterm elections will be part of that volatility. I guess if there's a material surprise. Like if the Senate, for example, were to tip to the left, I think that would be a pretty negative thing for markets.

You know, it's interesting. Turning 60, which I did, 250 years sounds pretty young as a country to me. Right? It's like a quarter of my lifespan. The country's only 4x my age, which I find something I didn't think about when I was 10, for example. The country seemed pretty old. Now it seems like we're pretty young. The American experiment is very young. So that's one notable thing. And I think it's important we're around. And what's kind of amazing is a bunch of relatively young guys, and they were generally guys back then, wrote the Constitution and the Bill of Rights and set up a system with free speech and the republican nature of government that's worked, for all of our warts, remarkably well over a quarter of a thousand years. It's amazing.

A continued American exceptionalism and less divisiveness. Yeah. I imagine how great this country would be if we were kind of more of us were on the same side as opposed to this constant tipping back and forth and a lot of venom from one side of the aisle to the other. It's just not... I don't like it when the president of either party gives the State of the Union speech and only half the people get up in the audience. It just seems silly to me.

It depends on leadership. End of day.

That's on leadership. Look, I think also social media to its detriment in the way algorithms work have contributed to... We need to redesign social media in a way that brings the country together as opposed to push us apart. I think they need to do more of that.

I always try to speak the truth about stuff I feel like is important. And hopefully on the margin that helps.

Thank you.