Yahoo Finance Bill Ackman's Journey To Become A Billionaire Wasn't Easy — A $300 Million Handshake Deal With Jamie Dimon Saved Him
Pershing Square Capital Management Founder and CEO Bill Ackman has amassed over $4 billion in wealth by timing the markets correctly. The billionaire Harvard University graduate turned heads by predicting the global shutdown during the first wave of the COVID-19 pandemic, pocketing a 100-fold return on his $26 million investment, yielding roughly $2.6 billion in just a month.
In 2023, Pershing Square's total returns stood at nearly 27%, beating the benchmark S&P 500 index's annual returns last year.
Ackman's Journey From Harvard To Wall Street
Ackman's Pershing Square Capital has roughly $16 billion in total assets under management invested across seven stocks.
“Everyone told me it was a really stupid idea to start my own hedge fund right out of business school. That's how I knew that it was a good idea,” Ackman said.
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But his journey hasn't always been smooth. In a high-stakes saga that unfolded in 2017, Elliott Investment Management, one of the largest activist hedge funds in the world with over $93 billion in total assets under management, set its sights on Pershing Square Holdings.
In a strategic move, Elliott made a bold investment into Pershing Square Holdings, a closed-end vehicle trading below its asset value nearly seven years ago. Elliott's maneuver involved taking a significant position in Pershing Square while simultaneously shorting the fund’s underlying securities. This calculated gamble was designed to drive Pershing Square to the ground, forcing it to go belly up.
“I envisioned an end where the permanent capital vehicle ends up getting liquidated, and another activist in my industry puts me out of business,” Ackman said.
Yet, Ackman was not one to yield easily. His defense included buying shares of Pershing Square in the market to retain control, ensuring the hedge fund's value didn't plummet in the open market.
Ackman credits JPMorgan Chase & Co. for this success, as the bank's $300 million loan allowed him to survive in the high-stakes turmoil on Wall Street.
“I give JPMorgan enormous credit in seeing through it,” he said. “It's a handshake bank and they bet I'd succeed.”
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Ackman's Relationship With Dimon
JPMorgan was under the leadership of Jamie Dimon when it loaned Ackman $300 million to save his fund. Suffice it to say, the Harvard-trained hedge fund manager has nothing but praise for the CEO of the world's largest bank.
In a bold post on X last May, Ackman touted Dimon as a "no bullsh*t, straight-talking charismatic leader" who should run for president.
"Our country is at risk with $32 trillion of debt with no end to massive deficits in sight, heading into a recession at a time of great political uncertainty. We need an exemplary business, financial and global leader to manage through what is likely to be a critically important decade for our country in determining our destiny," Ackman said. "Jamie Dimon is that leader."
Ackman isn't the only one who envisions Dimon in a political landscape. Former President Bill Clinton has also advocated for the banking executive's potential, stating, "If he decides to get out of banking, I think he would be really good in politics."
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This article Bill Ackman's Journey To Become A Billionaire Wasn't Easy — A $300 Million Handshake Deal With Jamie Dimon Saved Him originally appeared on Benzinga.com
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