Ackman Efforts to Boost Pershing Share Price May Not Work

Since May, Bill Ackman’s hedge fund has bought back more than 2.8 million shares of the publicly-traded version of its investment fund, according to a recent Bloomberg article, “essentially taking money clients gave him to invest and wagering it on himself.” But the article suggests that the move “could be another blunder among hedge funds fumbling for fresh ideas,” adding that the shares have lost value since. While buybacks are typically intended to boost share value, the article reports that in the case of Pershing, they have “slumped an additional 14 percent since the buybacks began.” The article notes that […]

Ackman’s Argues the Ill Effect of Index Funds on the Market

Barron’s reports on Pershing Square Capital manager Bill Ackman’s latest letter to shareholders, in which he sharply criticizes index funds. Ackman suggests that index funds are making the U.S like Japan, where the “system of cross-corporate ownership, the keiretsu, has been blamed for decades of Japanese corporate underperformance and market malaise.” He writes that “at current rates of inflows, it will not be long before index funds effectively control Corporate America and the corporations of many foreign countries,” which would create outcomes similar to Japan “without the counterbalancing force of large active investors and improvements in the governance oversight implemented […]