Just days after Warren Buffett announced his decision to step down as CEO of Berkshire Hathaway at the company's annual shareholders' meeting in Omaha, investor Bill Ackman, who also attended the event, revealed a bold move of his own.
Ackman, a longtime admirer of Buffett's strategy, is now taking steps to build a similar investment model by increasing his stake in Howard Hughes Holdings.
On Monday, Ackman invested $900 million into the Texas-based real estate company, raising his ownership from 37.6% to 46.9%. Shares rose nearly 3% following the news, signaling investor confidence in his long-term vision. The move reflects a strategic shift about turning Howard Hughes into a platform for acquiring full control of high-growth, smaller companies.
Ackman described Howard Hughes Holdings (HHH) as the ideal base for constructing a modern, fast-growing investment holding company. Traditionally, Ackman's firm, Pershing Square Capital Management, focused on minority stakes in large firms. Now, Howard Hughes will serve as the arm for acquiring smaller, promising companies outright.
This also marks Ackman's return to a leadership role at Howard Hughes. After stepping down as chairman last year, he's now rejoining as executive chairman. Ryan Israel, Pershing Square's Chief Investment Officer, will also become CIO at Howard Hughes to help align its direction with Ackman's broader strategy.
Though Howard Hughes is known for its real estate developments in places like Texas, Nevada, and Hawaii, the new approach will broaden its mission. While still rooted in real estate, the company will now look to invest in businesses with strong fundamentals and long-term growth potential.
Ackman's plans haven't been without friction. Earlier this year, the company rejected an earlier $900 million offer from Pershing Square, calling it "not acceptable in its current form." To address concerns about control, Pershing has agreed to cap its voting rights at 40% and limit its beneficial ownership to 47%.
Current CEO David O'Reilly and the existing management team will stay in place. Ackman has made it clear that the aim is collaboration, not takeover. The idea is to bring capital and expertise without disrupting the leadership already in place.
While Howard Hughes will focus on acquiring smaller companies, Pershing Square will continue its current strategy of investing in large-cap businesses. Together, they will form a dual-track investment structure—one focused on long-term growth across multiple sector.
