We have always admired Bill Ackman of Pershing Square Capital, not least given that he adopts a highly concentrated portfolio approach in a similar way we do at NAOS.
In this candid podcast, Bill talks about how he believes success never happens in a straight line noting that “almost all successful people I know have experienced some form of hardship along the way”.
He also talks in detail about why he invests in a concentrated way and how he gains a time advantage over other investors. Like NAOS, Pershing Square utilises a listed investment company as the chosen vehicle for the majority of their assets under management. The key reason for doing this is to gain a time advantage over other fund managers.
By managing money in a long dated, closed end vehicle it means the fund is not subject to redemptions when the market falls and therefore isn’t forced into selling at the wrong time. In a concentrated fund, selling part of a position at the wrong time, can significantly damage the returns for other investors.
Bill is someone who has been incredibly successful, but he has experienced huge challenges along the way which other investors can learn from. In our opinion, his insights are always worth listening to.