WEBVTT - Pershing Square Founder & CEO Bill Ackman Talks Public IPO, Investment Strategy 0:00:02.480 --> 0:00:07.000 Bloomberg Audio Studios, podcasts, radio news. 0:00:07.800 --> 0:00:10.200 Now the big deal of today, and it's a day 0:00:10.240 --> 0:00:12.239 that's been years in the making for Bill Ackman and 0:00:12.360 --> 0:00:15.440 his hedge fund, Pershing Square. Pershing has raised a five 0:00:15.480 --> 0:00:19.079 billion dollars for a US dual IPO in pursuit of 0:00:19.120 --> 0:00:22.360 a Warren Buffett investing powerhouse, and for our radio and 0:00:22.400 --> 0:00:25.279 TV listeners. I want to welcome Pershing Square CEO and 0:00:25.320 --> 0:00:26.680 founder Bill Ackman. 0:00:26.760 --> 0:00:28.600 Bill, thank you so much for stopping buy today. 0:00:28.680 --> 0:00:29.479 Of course, thank you so. 0:00:29.480 --> 0:00:31.280 As I mentioned this, this has been years in the making, 0:00:31.320 --> 0:00:33.640 out at least two years. It's had fits and starts, 0:00:33.720 --> 0:00:36.159 much like this American IPO market itself. 0:00:36.479 --> 0:00:38.519 What was it like to get this over the line. 0:00:38.960 --> 0:00:41.800 It's great, it's a great day, but it's really you know, 0:00:41.800 --> 0:00:44.040 it's the beginning, right, beginning of a journey. 0:00:44.400 --> 0:00:46.480 So it's the beginning of a journey. And now armed 0:00:46.520 --> 0:00:48.960 with five billion, how quickly can you put that to work? 0:00:49.560 --> 0:00:50.960 Actually, we think it's a very good time to put 0:00:51.000 --> 0:00:52.599 the capital of work, and we invest in the most 0:00:52.640 --> 0:00:55.080 liquid companies in the world. So it's really it's weeks, 0:00:55.120 --> 0:00:55.680 not months. 0:00:55.800 --> 0:00:56.560 So it's weeks. 0:00:56.960 --> 0:00:59.000 But there's this question, so some of the companies that 0:00:59.040 --> 0:01:03.000 you own in your other PORTFO for example example Uber Meta. 0:01:03.080 --> 0:01:05.399 They've had a good run and you're already very long then, 0:01:05.840 --> 0:01:08.399 so the question might arise, is now the right time 0:01:08.680 --> 0:01:09.760 to be doubling down? 0:01:09.880 --> 0:01:12.400 Actually, I think the companies you mentioned are very cheap 0:01:12.440 --> 0:01:14.800 stocks today. Interestingly, some of the best businesses in the 0:01:14.840 --> 0:01:16.840 world are training at the lowest multiples they've traded that 0:01:17.160 --> 0:01:20.039 in some cases in history. Actually those multiples bottom maybe 0:01:20.080 --> 0:01:22.320 two weeks ago, so we're a little bit off the 0:01:22.319 --> 0:01:24.360 the all time bottom. But you know, very bullish on 0:01:24.400 --> 0:01:27.280 the economy, and you know there are some amazing businesses 0:01:27.360 --> 0:01:30.240 available at really cheap prices. This will be kind of 0:01:30.360 --> 0:01:32.800 a continuation of what we're doing now. So we're going 0:01:32.840 --> 0:01:36.319 to just add to existing positions which will give us 0:01:36.319 --> 0:01:38.600 more ownership and our strategy we like to be a big, 0:01:38.640 --> 0:01:39.920 big shareholder. 0:01:39.520 --> 0:01:41.039 As you said, very liquid stocks. 0:01:41.080 --> 0:01:42.880 So the market is there, What about for like a 0:01:42.959 --> 0:01:45.720 Fany or Freddy where they trade OTC. How does that work? 0:01:45.880 --> 0:01:48.120 How do you dive back in without moving the market. 0:01:48.880 --> 0:01:50.840 We're going to be very thoughtful about the way we 0:01:50.880 --> 0:01:53.200 deploy the capitol, and we're not going to tell anyone 0:01:53.200 --> 0:01:54.120 on TV what we're going to do. 0:01:54.520 --> 0:01:56.840 I'd see you don't want to front run anyone. Perhaps 0:01:56.840 --> 0:02:00.160 perhaps wise decision. And look, you've discussed you were talking 0:02:00.160 --> 0:02:02.920 about it earlier this morning on CNBC that closed end 0:02:02.920 --> 0:02:05.320 funds they trade at a discount to Now that's not 0:02:05.360 --> 0:02:07.800 a surprise. So what does success look like in this 0:02:07.840 --> 0:02:10.880 scenario is, for example, like a ten percent discount. 0:02:11.160 --> 0:02:13.560 Okay, So I want to give you a new construct 0:02:13.600 --> 0:02:14.000 to think about. 0:02:14.080 --> 0:02:14.400 Please. 0:02:14.520 --> 0:02:14.840 Okay. 0:02:14.880 --> 0:02:18.280 So there's hundreds of closed end funds, but they're a 0:02:18.360 --> 0:02:21.080 very different animal from what we're doing here. We're adopting 0:02:21.120 --> 0:02:24.280 the closed end structure, the legal structure, the corporate structure, 0:02:24.320 --> 0:02:27.280 because it's the most flexible and most tax efficient corporate 0:02:27.320 --> 0:02:29.840 structure in America. It's never been used for the purpose 0:02:29.840 --> 0:02:30.720 that we're going to use it for. 0:02:31.320 --> 0:02:32.320 But if you think about. 0:02:32.080 --> 0:02:34.160 Our business as a business, think of us as an 0:02:34.200 --> 0:02:37.240 investment holding company. It's a business that's earned a nineteen 0:02:37.280 --> 0:02:39.360 percent return on equity for the last twenty two years. 0:02:39.800 --> 0:02:42.200 If you look in Bloomberg, someone should do a search 0:02:42.240 --> 0:02:44.720 real time. Find me a business that's earned nineteen percent 0:02:44.720 --> 0:02:46.800 of equity for the last twenty two years. It trades 0:02:46.840 --> 0:02:49.160 for less than two times book value, and we're taking 0:02:49.200 --> 0:02:51.679 the company public at book value, so we think that's 0:02:51.800 --> 0:02:54.160 going to be a cheap price now at the nature 0:02:54.160 --> 0:02:56.440 of IPOs are such that in the first couple of days, 0:02:56.440 --> 0:02:58.680 I can't tell you exactly what's going to happen. But 0:02:58.720 --> 0:03:01.400 over time, we're going to compound this book value or 0:03:01.520 --> 0:03:04.240 navy as some people call it, if we do anything 0:03:04.280 --> 0:03:05.840 like what we've done in the past a high rate 0:03:05.880 --> 0:03:07.280 over time, and it's going to compound, and it's going 0:03:07.320 --> 0:03:09.120 to grow, and we're going to run it like a 0:03:09.160 --> 0:03:09.760 real company. 0:03:10.160 --> 0:03:11.760 Closed M funds are kind of a backwater. 0:03:13.120 --> 0:03:15.560 No one actually wakes up and gets excited about investing 0:03:15.560 --> 0:03:17.680 in a close den a traditional clothes and IPO. 0:03:17.680 --> 0:03:19.400 They're kind of generic. You don't know who runs them. 0:03:19.440 --> 0:03:23.560 I bet Bloombergs never even run a story, and they 0:03:23.560 --> 0:03:25.840 don't have convers sculpt where their shaholders, they don't have 0:03:25.840 --> 0:03:30.520 particularly distinguished boards of directors. If this were a sea corp, 0:03:30.639 --> 0:03:32.399 no one will be asking me whether it should trade 0:03:32.400 --> 0:03:35.600 it a discount or not. But we can't deploy our 0:03:35.640 --> 0:03:39.320 strategy in a sea corp, which is why we've chosen 0:03:39.360 --> 0:03:41.360 this structure. And it's more tax efficient than a sea corp. 0:03:41.440 --> 0:03:44.040 It's a flow through entity for tax purposes, so more 0:03:44.080 --> 0:03:46.440 tax efficient, and then we fix the things that are 0:03:46.440 --> 0:03:49.120 problematic about clothes and funds. So it's the lowest cost 0:03:49.160 --> 0:03:52.880 compensation for a management firm like us to manage this 0:03:52.920 --> 0:03:55.000 pool of assets. In fact, we charge our other funds 0:03:55.200 --> 0:03:57.400 incentive fees. We don't do so here, we're not permitted 0:03:57.440 --> 0:03:59.080 to do so here. So it's the lowest cost version 0:03:59.080 --> 0:04:01.440 of Pershing Square. You take our record over the last 0:04:01.480 --> 0:04:03.320 eight years since we've had permanent capital, it's been a 0:04:03.360 --> 0:04:06.440 twenty four point nine percent return. That's a very high 0:04:06.680 --> 0:04:09.240 rate of return relative even to the stock market, which 0:04:09.240 --> 0:04:13.280 did you know about a ten percent per annum not 0:04:13.360 --> 0:04:15.440 as well. So it's a liquid way to invest in 0:04:15.600 --> 0:04:19.000 Pershing Square at very low cost, and we're going to 0:04:19.040 --> 0:04:19.840 build a value this. 0:04:19.920 --> 0:04:22.159 Entity over decades. Well, and I know you've said, by 0:04:22.200 --> 0:04:24.120 the way, that's just one of the companies we took public. 0:04:23.839 --> 0:04:24.680 Today, that's true. 0:04:24.760 --> 0:04:28.160 And you have Pershing Square the holding company, the hold co, 0:04:28.480 --> 0:04:31.120 and you also have ambitions to maybe list more funds. 0:04:31.320 --> 0:04:33.440 How quickly can you ramp up aum? 0:04:33.480 --> 0:04:34.960 I know you said just by the nature of what 0:04:35.000 --> 0:04:36.919 you're doing, by compounding that you could get to a 0:04:36.960 --> 0:04:38.560 trillion in twenty years. 0:04:38.800 --> 0:04:40.880 Do you have your own internal targets you're thinking of. 0:04:41.000 --> 0:04:43.240 So the first priority is to compound at a high 0:04:43.320 --> 0:04:45.279 rate for a long period of time. That's a much 0:04:45.320 --> 0:04:48.200 easier thing than doing an IPO right. IPOs can take 0:04:48.240 --> 0:04:51.080 management time and attention. So we're going to focus on investing. 0:04:51.320 --> 0:04:53.520 We're going to focus on getting our universal music deal done. 0:04:53.520 --> 0:04:57.640 We're going to focus on helping the administration figure out 0:04:57.680 --> 0:05:01.240 Fanning and Freddy. We're going to help our companies succeed. 0:05:01.880 --> 0:05:04.800 And the beauty of that is it grows our aem 0:05:04.839 --> 0:05:08.200 and the beauty of this of persons where the management 0:05:08.200 --> 0:05:11.240 company some people call the GP, is it grows with compounding. 0:05:11.680 --> 0:05:14.680 Other asset management firms generally only grow with raising money. 0:05:14.680 --> 0:05:17.400 If you look at a KHR or the other sort 0:05:17.440 --> 0:05:20.760 of alternate investment management firms, if they stop raising money, 0:05:20.800 --> 0:05:23.960 they shrink because they're constantly sending money back to their investors. 0:05:23.960 --> 0:05:26.680 As they sell assets, they send money back. In our model, 0:05:26.960 --> 0:05:30.400 we build off a base and if we're up twenty percent, 0:05:30.800 --> 0:05:33.080 the assets will grow about twenty percent, and so that's 0:05:33.120 --> 0:05:36.240 a very fast rate of growth without the need to 0:05:36.320 --> 0:05:37.400 raise an exctional company. 0:05:37.400 --> 0:05:38.800 Can you rival the size of those? 0:05:38.839 --> 0:05:40.520 I mean, I know it's a very different model, but 0:05:40.520 --> 0:05:42.839 do you see yourself growing to a size of a 0:05:42.839 --> 0:05:44.760 Blackstone of an Apollo over time? 0:05:44.800 --> 0:05:45.200 For sure? 0:05:45.320 --> 0:05:47.360 And that was the point I was making. We'll have 0:05:47.400 --> 0:05:50.200 twenty five today, post the closing of this IPO, we'll 0:05:50.200 --> 0:05:52.920 have twenty five to twenty six billion of fee paying assets. 0:05:53.000 --> 0:05:54.960 Is the way you invest need to change then, because 0:05:55.000 --> 0:05:58.160 these are huge platforms that have many different types of assets. 0:05:58.200 --> 0:05:59.520 They invest in utifur strategy. 0:05:59.640 --> 0:06:01.720 We invest in the largest companies in the world, kind 0:06:01.760 --> 0:06:05.120 of large cap nega cap companies mostly based here. We're 0:06:05.160 --> 0:06:08.120 tiny in the context of the capital markets. We manage 0:06:08.160 --> 0:06:10.400 money on a concentrated fashion. But with twenty five billion 0:06:10.839 --> 0:06:14.760 of capital a couple billion dollars per investment, that's small 0:06:14.760 --> 0:06:16.400 in the context of the market we invest in. 0:06:16.520 --> 0:06:19.000 By the way, and this is quite unique, as you 0:06:19.040 --> 0:06:21.560 point out, there's not really another structure that's listed like this. 0:06:22.279 --> 0:06:24.359 How are you thinking about it though, in terms of 0:06:24.440 --> 0:06:29.080 having a listed structure, both Pershing Square and PSUs that 0:06:29.240 --> 0:06:30.440 it is centered around. 0:06:30.200 --> 0:06:31.920 You and your very small team, which I know. 0:06:31.880 --> 0:06:33.880 Is you see that as a benefit to does it 0:06:33.920 --> 0:06:36.320 change how you communicate? Does it change what you put 0:06:36.320 --> 0:06:39.520 on social media? Because it could impact share prices? It 0:06:39.560 --> 0:06:41.640 does well, I guess legally, is one question. 0:06:41.680 --> 0:06:43.720 But beyond that, well, actually. 0:06:43.400 --> 0:06:45.640 I believe or not, I've been very constrained on social media. 0:06:46.160 --> 0:06:48.640 Maybe you find that a surprise. But with respect to 0:06:48.640 --> 0:06:52.520 talking about Pershing Square, there are a lot of limitations. 0:06:52.360 --> 0:06:53.520 Up until this moment in time. 0:06:54.040 --> 0:06:58.359 Now we have an SEC registered entity, our existing offshore 0:06:58.360 --> 0:06:59.920 clothes and fun, we're not allowed to talk about it 0:07:00.000 --> 0:07:02.480 in America, and that's where I spend the vast majority 0:07:02.480 --> 0:07:04.360 of my time. So it's something we can't talk about. 0:07:04.400 --> 0:07:06.800 The beauty of this entity is we're going to be 0:07:06.800 --> 0:07:08.880 able to make an investment. We can say today we 0:07:08.920 --> 0:07:11.840 bought a ten percent stake in company ABC. Here's why 0:07:11.880 --> 0:07:14.600 we own it, ticker simple ps US and investment. We 0:07:14.640 --> 0:07:17.480 can keep very close touch with our shareholders. And one 0:07:17.520 --> 0:07:19.200 thing that Elon Musk has done very well over a 0:07:19.240 --> 0:07:20.840 long period of time is he built a base of 0:07:20.840 --> 0:07:24.120 followers that you know, we're very supportive of Tesla over 0:07:24.160 --> 0:07:27.160 time reduced the cost of Tesla stock and that's been 0:07:27.200 --> 0:07:29.840 a competitive vantage that Tesla's had over time. We have 0:07:30.040 --> 0:07:33.840 already a very large base of followers in the capital markets. 0:07:34.680 --> 0:07:36.800 They haven't had a way to invest with us until now. 0:07:36.880 --> 0:07:39.400 It does sometimes make for more volatility, though, when a 0:07:39.400 --> 0:07:41.440 post can potentially move around share prices. 0:07:41.920 --> 0:07:43.760 How do you think about that, I. 0:07:43.680 --> 0:07:45.360 Mean, we're only going to post stuff that's true. 0:07:45.720 --> 0:07:48.200 I think that's I think that's a good rule to statify. 0:07:48.480 --> 0:07:48.800 Yes. 0:07:49.200 --> 0:07:51.720 At the same time, you know you've been pretty early 0:07:51.760 --> 0:07:55.160 in some major dislocations in this market, be it COVID, 0:07:55.160 --> 0:07:58.080 be the inflation that followed, and some really successful hedging 0:07:58.120 --> 0:08:01.880 strategies behind that. Do you see any dislocations like that 0:08:01.960 --> 0:08:04.200 at the moment and hedging strategies you'd want to deploy. 0:08:05.440 --> 0:08:09.160 No, Actually, I think we're in a pretty We're heading 0:08:09.200 --> 0:08:12.000 into a very good place. Obviously, we have a war 0:08:12.160 --> 0:08:14.440 still underway, but I think we have by far the 0:08:14.480 --> 0:08:18.280 upper hand. I think the Iran has been denuded of 0:08:18.360 --> 0:08:22.840 military capability and I think it's only a matter of time. Administration, 0:08:22.920 --> 0:08:25.160 I think is move of closing the straight I think 0:08:25.280 --> 0:08:28.960 was a kind of a kung Fu grip ty'd move 0:08:29.040 --> 0:08:31.160 on the part of the president, and I think it's 0:08:31.160 --> 0:08:34.440 putting a huge pressure on Iran. So I think we're 0:08:34.440 --> 0:08:37.160 going to get this resolved in the relative short term. 0:08:37.440 --> 0:08:40.240 I think that's really the biggest overhang on the market, right, 0:08:40.320 --> 0:08:43.640 you know, the you know we close the straight obviously 0:08:43.720 --> 0:08:46.680 has an impact. You know, some whever four percentage points 0:08:46.720 --> 0:08:49.280 or something of oil on a daily basis can can 0:08:49.320 --> 0:08:51.680 move a market, and that has an impact causes inflation 0:08:52.000 --> 0:08:53.719 in the short term. But I think it's a short 0:08:53.800 --> 0:08:56.160 term phenomenon, and I think once we're through it, I 0:08:56.200 --> 0:08:57.920 do see, you know, a federal reserve that should be 0:08:57.920 --> 0:09:02.080 able to reduce interest rates. We have massive you know, 0:09:02.760 --> 0:09:05.880 AI spending, we have massive energy spending. We have a 0:09:05.960 --> 0:09:09.520 tax bill that's driving investment every day. There's how many 0:09:09.600 --> 0:09:13.160 deals that are being announced if administration is very supportive 0:09:13.160 --> 0:09:15.599 of transactions as opposed to an FTC. 0:09:15.400 --> 0:09:16.720 Would which would stop everything. 0:09:16.800 --> 0:09:19.120 So there's I think you're going to see lots of 0:09:19.160 --> 0:09:20.800 reasons to be bullish on markets generally. 0:09:21.120 --> 0:09:24.720 You're pretty early in this call posting on X that 0:09:25.520 --> 0:09:27.480 any dips would be short lived, and they were. 0:09:27.520 --> 0:09:32.320 I didn't say any. I basically called a recent bottom. 0:09:32.360 --> 0:09:32.880 Let's put it the up. 0:09:32.880 --> 0:09:35.120 I thought stocks are getting stupidly cheap. So if you 0:09:35.240 --> 0:09:36.000 sort of called it out. 0:09:35.920 --> 0:09:37.920 I didn't even sell off ten percent. I feel like 0:09:37.920 --> 0:09:40.120 some people feel uncomfortable with that. I think oil today 0:09:40.160 --> 0:09:43.559 is trading somewhere around one sixteen, and stocks feel unbothered. 0:09:44.160 --> 0:09:46.600 See, you can't think about stocks. You're thinking about stocks 0:09:46.600 --> 0:09:49.840 from an index perspective. Okay, the index is like looking 0:09:49.880 --> 0:09:52.800 at the surface of the ocean. I mean sorry, the 0:09:52.840 --> 0:09:56.160 index is like looking at inside the ocean. But the 0:09:56.200 --> 0:09:58.040 surface is moving around a lot. And what I mean 0:09:58.080 --> 0:10:01.000 by that is there are you know, a lot of stocks. 0:10:02.320 --> 0:10:06.360 There's enormous disparity in terms, there's enormous volatility. We have 0:10:06.360 --> 0:10:08.080 a lot of earning coming out in the next twenty 0:10:08.120 --> 0:10:09.920 four to forty eight hours, and you can see you 0:10:09.920 --> 0:10:13.920 could see massive moves in different directions. There's so much 0:10:14.000 --> 0:10:19.160 capital leveraged, short term focus, tightly risk managed, which means 0:10:19.160 --> 0:10:21.760 stop losses and things like this. And the result of 0:10:21.760 --> 0:10:23.679 that is that our capital markets you can see massive 0:10:23.720 --> 0:10:25.839 moves and share prices if you have the ability to 0:10:25.880 --> 0:10:28.920 be long term. Every once in a while, you know 0:10:29.000 --> 0:10:31.120 the price of a really high quality company gets stupidly 0:10:31.200 --> 0:10:34.920 cheap because someone gets it's forced to sell because of 0:10:34.960 --> 0:10:38.480 a bad print for the quarter or a guidance change. 0:10:38.840 --> 0:10:41.600 Really something that doesn't necessarily have any material impact on 0:10:41.640 --> 0:10:43.480 the long term business. And those are the kind of 0:10:43.480 --> 0:10:44.880 dislocations we take advantage of. 0:10:45.160 --> 0:10:47.600 But the dislocations, it sounds like, are over. The stupidly 0:10:47.679 --> 0:10:49.080 cheap moment has come in past. 0:10:49.160 --> 0:10:49.600 Is that fair? 0:10:49.640 --> 0:10:53.440 I would say we're above stupidly cheap bottom, But I 0:10:53.440 --> 0:10:55.079 still think there are a lot of very high quality 0:10:55.160 --> 0:10:57.720 Like the way we sort of model each of our companies, 0:10:57.760 --> 0:11:00.520 we build a model and we were are kind of 0:11:00.880 --> 0:11:03.600 go forward. Next three year IRR was something north of 0:11:03.640 --> 0:11:06.320 thirty percent at the bottom. You don't see that with 0:11:06.360 --> 0:11:09.160 really high quality companies. It's probably now in the mid twenties. 0:11:09.760 --> 0:11:12.199 It's still a very high rate of projective return for 0:11:12.280 --> 0:11:15.400 some of the best businesses in the world. And that's 0:11:15.400 --> 0:11:18.720 suggestive to me. The market's cheap, or at least cheap 0:11:19.400 --> 0:11:21.079 some of the This is a case where the highest 0:11:21.120 --> 0:11:23.480 quality companies are cheap. I'm not saying that energy companies 0:11:23.480 --> 0:11:24.200 are cheap today. 0:11:24.520 --> 0:11:27.240 Sure, so you have to avoid value traps essentially, and 0:11:27.280 --> 0:11:29.720 this market as it stands, that's I think. 0:11:30.679 --> 0:11:32.040 True of any market. 0:11:32.080 --> 0:11:34.960 Fair enough, you know, in this sort of quest to 0:11:35.000 --> 0:11:39.040 build a Berkshire Hathaway type model so you've listed these two. 0:11:39.440 --> 0:11:41.520 Let me clarify because I think it's a little confusion. 0:11:42.080 --> 0:11:45.320 So we're building an asset management firm that has some 0:11:45.360 --> 0:11:48.760 of the similar attributes to a Blackstone car, but it's 0:11:48.800 --> 0:11:53.359 extremely investment centric. We're going to grow this business principally 0:11:53.360 --> 0:11:56.080 by compounding as opposed to raising lots of funds. So 0:11:56.080 --> 0:11:58.920 that's one Buffett was not in the asset management business. 0:11:59.160 --> 0:12:02.040 Buffett was built a corporation over time. We have a 0:12:02.040 --> 0:12:05.480 company called Howard Use Holdings. We bought an incremental stake 0:12:05.520 --> 0:12:08.920 in about a year ago. I became executive chair, our CIO, 0:12:09.000 --> 0:12:11.600 Ryan became CIO. The full persioning Scare team became available 0:12:11.640 --> 0:12:13.920 to the company, and that's the company we talked about 0:12:13.920 --> 0:12:16.840 about building a modern day Berkshire Pathway. And the first 0:12:16.840 --> 0:12:19.240 step we took was we sign an agreement to buy 0:12:19.280 --> 0:12:21.560 a company called Vantage Holdings. That deal is going to 0:12:21.600 --> 0:12:25.680 close in the next you call it sixty days, something 0:12:25.720 --> 0:12:29.240 like this, and we're going to manage the assets of 0:12:29.240 --> 0:12:33.040 that insurer and we're going to work with management to 0:12:33.080 --> 0:12:37.440 make sure they underwrite very high quality, profitable insurance business. 0:12:37.720 --> 0:12:39.520 If you look at Berkshire over the last sixty years, 0:12:39.600 --> 0:12:43.880 it's built most of its value running becoming effectively an 0:12:43.880 --> 0:12:46.199 insurance holding company. That's what Buffett is built over time, 0:12:46.480 --> 0:12:49.320 and it was his successful management of the assets. So 0:12:49.320 --> 0:12:52.640 when you hear Buffett buying Apple, it wasn't Buffet buying Apple. 0:12:52.679 --> 0:12:54.959 It wasn't even Berkshire buying Apple. It was the Berkshire 0:12:54.960 --> 0:12:57.400 insurance subsidiaries buying Apple. And we're going to do the 0:12:57.400 --> 0:12:59.600 same thing. We're going to manage this. So the goal 0:12:59.600 --> 0:13:02.760 of Howard is to build a long term divers fight 0:13:02.800 --> 0:13:06.200 holding company akin to what Buffett is done over a 0:13:06.200 --> 0:13:06.760 long period of. 0:13:06.679 --> 0:13:09.160 Time, and in sort of defining what you know, your 0:13:09.200 --> 0:13:11.720 various holdings and your investments look like and what they're not. 0:13:11.840 --> 0:13:14.240 I know, one distinction you've made very clear, because there 0:13:14.240 --> 0:13:17.120 have been these nerves around retail funds, but it's been 0:13:17.120 --> 0:13:20.000 really centered around BDC's in private credit. You've really drawn 0:13:20.040 --> 0:13:23.439 a distinct line that these are not there's no exposure there. 0:13:23.640 --> 0:13:25.079 I wonder if part of that, though. 0:13:25.040 --> 0:13:27.800 Is skepticism of the asset class itself. 0:13:28.520 --> 0:13:30.840 Is there any skepticism of that asset class. 0:13:30.559 --> 0:13:31.200 Of private credit? 0:13:31.320 --> 0:13:35.200 Generally yes, Look, anytime you have an asset class grow 0:13:35.360 --> 0:13:38.280 very very quickly, with a lot of participants competing, you know, 0:13:38.960 --> 0:13:41.760 return you either have to accept lower returns or more risk. 0:13:41.960 --> 0:13:43.400 That's the only way you can kind of grow in 0:13:43.400 --> 0:13:46.400 that environment. And there's, like everything else, there's a continuum 0:13:46.440 --> 0:13:49.560 of quality in terms of sponsorship. I don't think there's 0:13:49.559 --> 0:13:52.319 inherently something wrong with private credit. I think the one 0:13:52.760 --> 0:13:57.319 thing I would say is investing in ill liquid assets, 0:13:58.200 --> 0:14:01.960 you really should have very long term capital or permanent capital. 0:14:02.520 --> 0:14:04.640 And here you are on your quest to obtaining more 0:14:04.720 --> 0:14:05.680 more permanent capital. 0:14:05.840 --> 0:14:10.160 Is so much capital is managed where the underlying asset 0:14:10.240 --> 0:14:12.679 is long term. A company, a stock is a long 0:14:12.760 --> 0:14:16.520 term asset. The vast majority what's caused the stock market 0:14:16.520 --> 0:14:19.240 to behave the way it does is the vast majority 0:14:19.280 --> 0:14:21.880 of asset management firms have very short term money. They 0:14:21.880 --> 0:14:24.360 have money that can leave in a minute an etf 0:14:24.400 --> 0:14:26.760 they have money that can leave overnight in a mutual 0:14:26.800 --> 0:14:28.440 fund or even a hedge fund. 0:14:28.640 --> 0:14:31.600 You know, when we local assets. 0:14:31.360 --> 0:14:34.040 Or hedge funds, about half the money can leave every year. 0:14:34.520 --> 0:14:36.400 It's hard to be a long term investor if your 0:14:36.440 --> 0:14:37.360 money can leave overnight. 0:14:37.640 --> 0:14:41.280 So one of the arguments for that though, of being 0:14:41.320 --> 0:14:42.200 able to redeem, is. 0:14:42.160 --> 0:14:45.280 Just your accountable to shareholders. How do you keep that? 0:14:45.320 --> 0:14:48.000 How do you keep accountability to shareholders when they're not 0:14:48.080 --> 0:14:49.840 able to redeem assets out of the fund. 0:14:50.360 --> 0:14:52.720 The shareholders have more liquid than they do in any 0:14:52.720 --> 0:14:54.200 fund because they have a stock that trades and they 0:14:54.240 --> 0:14:55.480 can buy and sell over time. 0:14:55.560 --> 0:14:57.400 What needs to go right on the flywheel because if 0:14:57.400 --> 0:14:59.280 you do have any sort of discount, nap, does that 0:14:59.280 --> 0:15:00.000 make it more difficult? 0:15:00.000 --> 0:15:01.880 Well to list other vehicles like this. 0:15:02.560 --> 0:15:05.240 We're going to focus on doing great job for the 0:15:05.240 --> 0:15:07.520 PSUs shareholders, and if we do a great job, we 0:15:07.560 --> 0:15:09.720 communicate to them, well we deliver the kind of performance 0:15:09.760 --> 0:15:12.000 we have over time, we deserve to trade it a 0:15:12.000 --> 0:15:13.360 premium as opposed to discount. 0:15:13.520 --> 0:15:15.720 Right again, the average. 0:15:15.320 --> 0:15:17.960 Clothes and fund, the second the best performing closed then 0:15:17.960 --> 0:15:20.320 fun over the last eight years, generated a fourteen and 0:15:20.360 --> 0:15:23.000 a half percent return. As time we generated a twenty 0:15:23.000 --> 0:15:24.120 four point nine percent return. 0:15:24.600 --> 0:15:25.920 That's a huge disparity. 0:15:25.920 --> 0:15:27.400 And by the way, that fund trades at a fifteen 0:15:27.400 --> 0:15:30.040 percent discount, sorry, fifteen percent premium. 0:15:30.120 --> 0:15:31.720 Do you think you could trade it at premium? 0:15:32.280 --> 0:15:35.280 Here's my argument, right, business, that's that earn the kind 0:15:35.320 --> 0:15:38.000 of return that we've generated over time, traded two to 0:15:38.040 --> 0:15:41.040 three times book value. Should we trade it a discount 0:15:41.080 --> 0:15:42.960 book value? It makes no sense. And we have a 0:15:43.000 --> 0:15:46.120 tax advantage, right, we have a favorable corporate structure, much 0:15:46.120 --> 0:15:49.800 more flexible, much more tax efficient liquid listen New York 0:15:49.800 --> 0:15:50.560 stocks change. 0:15:50.640 --> 0:15:51.200 I mean put. 0:15:51.080 --> 0:15:52.880 Aside, I don't know what happens in the first couple 0:15:52.880 --> 0:15:56.520 of days after an offering, you know, but with good 0:15:56.520 --> 0:16:00.480 shareholder communication, keep people informed, good performance, this can become 0:16:00.520 --> 0:16:02.400 a core holding. And by the way, the bulk of 0:16:03.120 --> 0:16:07.360 this entity is sold to very long term holders, and 0:16:07.440 --> 0:16:10.800 so now with so much of the stock held by 0:16:10.800 --> 0:16:13.280 long term holders, it's the marginal buyer and seller that 0:16:13.280 --> 0:16:14.240 will move the price around. 0:16:15.800 --> 0:16:17.520 By the way, are you as excited as everyone else 0:16:17.560 --> 0:16:19.160 is about getting to hear from you quarterly now when 0:16:19.160 --> 0:16:20.120 you give quarterly updates? 0:16:20.880 --> 0:16:23.160 Or do you wish it was semi annually? 0:16:23.280 --> 0:16:23.400 No? 0:16:23.400 --> 0:16:27.280 No, I'm very happy to enjoy communicating, and I certainly 0:16:27.320 --> 0:16:31.680 enjoy communicating with people who've entrusted their future to us. 0:16:32.920 --> 0:16:33.880 We actually operate. 0:16:34.000 --> 0:16:36.240 You're not as aware of this, but today we do 0:16:36.320 --> 0:16:39.480 quarterly conference calls for our existing vehicle. We're not going 0:16:39.480 --> 0:16:41.480 to be able to do them on shore. We're able 0:16:41.480 --> 0:16:43.800 to answer questions from shareholders the way that you would 0:16:43.840 --> 0:16:45.000 want those questions to be answered. 0:16:45.120 --> 0:16:46.680 Very much so looking forward to that. Bill, Thank you 0:16:46.720 --> 0:16:48.680 so much for your time this morning. We appreciate it. 0:16:48.760 --> 0:16:51.720 Bill Ackman, CEO and founder of Pershing Square