BILL ACKMAN: The Press Is 'A Necessary Element' Of My Investment Strategy
Advisor Perspectives has an excerpt.
One of the questions posed to Ackman had to do with him being in the press frequently.
A lot of hedge fund managers won't ever speak to the press, especially when it comes to their short positions.
Ackman, who runs $12 billion Pershing Square Capital Management, is arguably one of the most media savvy fund managers out there.
Right now, he's in the spot light for his $1 billion short position on Herbalife, a nutrition supplement seller he claims is a pyramid scheme.
He explains why he's so public. From VII:
Maintaining a high public profile appears to be important to the execution of your strategy. Why is that?
The press is a necessary element of the strategy. Look at something like Procter & Gamble. We haven’t run a proxy contest. We haven’t made a public presentation. All we did is buy some stock. That became publicly known and immediately the press was all over the company and what they were or weren’t doing right. That saved us a lot of time and energy. On solid, high-profile boards of companies that are underperforming, sometimes the directors just need a little bit of a push. One of the best pushes is a reputational push, which a press spotlight can administer.
That spotlight can be particularly important in our shorts. We don’t short on valuation, but in situations where we believe a company is violating the law, or has misleading or inaccurate accounting, or has a potential regulatory problem. In these cases the attention really matters. If you’re a regulator with any sort of oversight of Herbalife [HLF], how can you ignore it when a reputable investor who has spent 18 months researching it says it is a certainty that the company is a pyramid scheme? Imagine if I’m right and they’ve done nothing on a company that’s in the paper everyday.