Lunch with hedge fund billionaire Bill Ackman, the founder of $11 billion Pershing Square Capital Management, just hit the auction block.
Bidding kicked off Thursday on the auction site Charitybuzz, offering the highest bidder and one guest the opportunity to meet the billionaire activist investor over lunch — either virtually over a platform like Zoom (ZM) or in person “when both parties feel it would be appropriate to have an in-person meeting” — to “discuss the world of finance,” according to the website.
“I’ll make it worth the person’s while,” Ackman told Yahoo Finance in a telephone call.
This is the auction’s third year and will benefit The David Lynch Foundation, a nonprofit that introduces and promotes the practice of Transcendental Meditation for veterans with post-traumatic stress disorder (PTSD), inner-city children, victims of domestic violence, and many others.
Transcendental Meditation is popular within the finance community, with practitioners including hedge fund titan Ray Dalio, who credits it as the “single biggest influence” in his life.
Ackman, who will match the winning bid, said he’s used meditation “as a way to deal with stress and challenging times.” He was introduced to meditation and the foundation by his friend Mark Axelowitz, managing director at UBS Private Wealth Management and vice chairman of the David Lynch Foundation.
The proceeds from this year’s auction will help the foundation bring Transcendental Meditation to the frontline workers of the COVID-19 crisis, making it an especially timely and worthy cause to support, Ackman added.
“In terms of return on investment, beyond the philanthropic part, the first person I did this lunch with was a guy I ended up going into business with,” Ackman said.
Canadian-based entrepreneur and investor Andrew Wilkinson, the CEO of tech holding company Tiny, shelled out $57,700 for lunch with Ackman in 2018. Ackman was so impressed with Wilkinson and his business partner that he has now invested $40 million with Wilkinson and is his largest investor. Last year’s auction fetched $75,000, but the lunch with the winner hasn’t happened yet because of the coronavirus pandemic.
A lot to discuss
There’s a lot to discuss with the famed fund manager these days, with Ackman putting up stellar returns, launching a record-breaking special purpose acquisition company (SPAC) (PSTH.U) that’s on the hunt currently for a unicorn, and speaking out on issues throughout the pandemic, from calling for a 30-day shutdown back in March to suggesting a massive infrastructure program to bolster the ailing economy to defending capitalism but promoting inclusion in the stock market for all Americans.
Ackman, 54, is best known as an activist investor who snaps up large stakes in publicly-traded companies and pushes for changes. His investment philosophy has long centered around simple, predictable, cash-flow-generative, dominant companies with high entry barriers.
Pershing Square Holdings, the fund’s publicly traded vehicle, has delivered a 57% return through Nov. 17, far outpacing the broader market, and after the fund was down 7.1% in late February. Back in March, Ackman famously parlayed a $27 million bet into $2.6 billion via hedges in the form of purchases of credit protection on investment-grade credit, a trade that’s now considered one of the greatest of all time.
Ackman told the Financial Times earlier this month that the fund has put on the same investment credit hedge from 8 months ago, but not of the scale the firm had in March. Ackman, who is long stocks and short investment-grade credit, uses credit hedges as a form of insurance for his portfolio. Among the big bets in Pershing Square’s stock portfolio are Lowe's (LOW), Restaurant Brands International (QSR), Chipotle (CMG), Hilton Hotels (HLT), Starbucks (SBUX), Agilent Technologies (A), and Howard Hughes Corporation (HHC), according to the most recent regulatory filing.
‘Without your health, you have nothing’
Ackman told Yahoo Finance that he’s “very encouraged by the vaccine progress,” but is worried about the aggressive spread of the virus.
“It’s very good news and I think they’re going to start sending vaccines hopefully as early as next month,” he said, later adding, “I think the problem is it’s going to take time to vaccinate enough of the country when this is not an issue and in the meantime, a lot of people are going to die.”
Unlike in March and April, when the coronavirus rolled across the country, it’s now hitting every region simultaneously, with the Midwest particularly hard hit. As a result, Ackman worries about the strain on the U.S. medical system. To date, deaths in the U.S. topped 250,000.
“[That’s] the frightening part,” Ackman said of the virus’ spread. “The good part is we’re going to get through this. The bad part is a lot more people are going to die ... We have needless death, I would say.”
Ackman has advocated for facial covering compliance, an issue that’s “sadly become a political thing.”
Imagine our archenemy drops poison gas on our country. The gas has infected 11.5m and killed 252k, or 1 out of every 45 so far. The gas is pernicious in that once you are exposed, you can infect others and kill them. Gas masks are now available for 15 cents. Would you wear one?
— Bill Ackman (@BillAckman) November 17, 2020
“Think about [COVID-19] as a common enemy of the United States. One analogy you could make is, think about World War II where people had to pull their shades down, turn off their lights, so if a bombing raid came in, the enemy wouldn’t get us. The consequence is you had to be quiet and sit in the dark, right, it’s a little annoying, but it’s a smart thing to do. This is kind of the same thing — it’s a little annoying, but it’s to keep the enemy from killing us. The enemy is a common enemy of every American — it’s not one half of the country versus the other. By the way, everyone who has had a friend who’s been sick or has lost a friend realizes this disease doesn’t know which party you’re registered with.”
For Ackman, the pandemic has reinforced a number of principles for life and investing.
“Number one, without your health, you have nothing. The implausible, low probability things can happen, so you better be prepared. Those are two principles I always have. The other one is don’t take a small chance that can have a catastrophic outcome. That’s why I’ve been conservative about exposure,” the fund manager concluded.
Julia La Roche is a correspondent for Yahoo Finance. Follow her on Twitter.