Following Warren Buffett's announcement to step down as CEO of Berkshire Hathaway by the close of 2025, attention has shifted to prominent hedge fund managers who echo his dedication to long-term value creation. Among these figures, Bill Ackman, the 59-year-old founder and CEO of Pershing Square Capital Management (PSCM), is increasingly recognized for building an investment legacy akin to Buffett's. With substantial assets under management, Ackman's evolution from an audacious activist investor to one focused on enduring value has prompted discussions on Wall Street about whether he could achieve sustained investment outperformance reminiscent of Buffett.
Both Ackman and Buffett champion an investment approach characterized by concentrated portfolios and a long-term outlook. Ackman's Pershing Square Holdings, a closed-end fund advised by his firm, typically maintains a select group of 8 to 12 core holdings, primarily large-cap North American enterprises. This strategy mirrors Buffett's, where Berkshire Hathaway, despite its vast scale, holds significant stakes in a relatively small number of companies, such as Apple and American Express. The underlying principle for both is that a few meticulously researched positions can yield superior returns compared to broadly diversified portfolios over extended periods.
Furthermore, their investment philosophies converge on prioritizing businesses with strong economic moats—sustainable competitive advantages that safeguard profitability. Pershing Square explicitly seeks \"high-quality growth businesses… that generate predictable, recurring cash flows.\" While Ackman's sector focus spans consumer brands, technology, restaurants, and real estate, his criteria for selection align closely with the historical tenets of Buffett's success: robust brands and prudent capital management. Both leaders also embrace transparency, with Buffett's annual shareholder letters setting a precedent for open communication, and Ackman similarly providing comprehensive investor updates, press releases, and financial reports to stakeholders.
While sharing a core investment ethos, Pershing Square and Berkshire Hathaway exhibit notable differences in structure and strategy. Berkshire Hathaway operates as a holding company, owning entire businesses and significant equity stakes, whereas Pershing Square manages a publicly traded fund primarily investing in public equities. Ackman's past as an activist investor, notably his short position against Herbalife, contrasts with Buffett's preference for long-term ownership without intervention. Additionally, Berkshire Hathaway's immense scale enables the acquisition of private companies, a path less accessible to Pershing Square's model. Despite these distinctions, Ackman's display of conviction, focus on business quality, and willingness to concentrate investments resonate deeply with Buffett's admired qualities. Whether he ultimately reaches Buffett's iconic status remains to be seen, but his investment maneuvers are undeniably noteworthy.