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Bill Ackman’s calls for the removal of Harvard University President Claudine Gay were ripped straight out of a corporate raider’s playbook.
It was a natural approach for the billionaire hedge-fund manager who made his name as an aggressive activist investor. For decades, he amassed his fortune by investing in undervalued companies, demanding change and pursuing very public pressure campaigns — often moving to oust a company’s management or board of directors.
But in the case of Harvard, Ackman used posts on X, the social-media platform formerly known as Twitter, rather than filings with the Securities and Exchange Commission, to make his case.
Ackman’s bare-knuckles boardroom tactics in the Gay matter have attracted criticism. The NAACP accused him of racism for going after the first Black president of Americas’ oldest university. Others have charged that he rode an ideologically driven push from the political right against diversity, equity and inclusion measures in academia to get what he wanted.
On Thursday, the Rev. Al Sharpton led a protest outside the offices of Ackman’s fund, Pershing Square Capital Management.
Ackman has denied being driven by racism in his campaign against Gay, countering that efforts to bring more people of color into positions of power, part of the framework known as DEI, are themselves racist because, in his view, they discriminate against white people. Proponents of DEI initiatives say they boost underrepresented groups’ presence in the workplace, create a fairer playing field and foster greater belonging, in addition to being a smart business move.
“DEI is racist because reverse racism is racism, even if it is against white people,” Ackman wrote in a lengthy X post following Gay’s resignation earlier this week. “Racism against white people has become considered acceptable by many not to be racism, or alternatively, it is deemed acceptable racism.”
A spokesman for Ackman said his comments on X speak for themselves.
The Elvis of investing
Ackman made his name through an aggressive approach to investments, building his firm into one of the highest-profile hedge funds in the country, with $18 billion in assets under management. His personal fortune is estimated to be around $4 billion, according to Forbes.
His model has been to focus on a small handful of stock investments, take counterintuitive bets and then make a lot of noise, often putting himself at the center of attention. Among the investor class, he has developed a kind of cult of personality. His research on corporate situations can often be sharp and exhaustive, but sometimes his activist campaigns to shake up corporate boardrooms turn into circuses. He has been called the Elvis of investing.
In some years, Ackman’s fund has outperformed, by huge numbers, many of its rivals and the stock market broadly — for example, making more than $2 billion in profit by shorting the market ahead of the pandemic. His investment in the real-estate investment trust General Growth Properties, in the wake of the 2008 economic crisis, turned into a $3.7 billion profit for his fund. His Pershing Square Holdings returned 26.7% net of fees in 2023, edging out the U.S. stock market, as gauged by the S&P 500
SPX.
Hedge-fund managers like Ackman make money by collecting performance fees, usually 20% of the annual profits generated by investments made in the market. They often also have a significant amount of their own net worth invested in their funds.
Ackman’s brash approach has rubbed many people the wrong way. A decade ago, he lost a fight over a high-profile $1 billion short position he took against the nutrition company Herbalife
HLF,
which he accused of operating as a pyramid scheme, bringing him head-to-head with famed corporate raider Carl Icahn. Ackman lost big money on Herbalife and disastrous activist positions in J.C. Penney and Valeant Pharmaceuticals .
His hedge fund may have averted disaster by raising $2.7 billion of permanent investing capital in an initial public offering of Pershing Square Holdings
NL:PSH
PSHZF
that Ackman conducted on the Euronext Amsterdam Stock Exchange. When investors in Ackman’s hedge fund started pulling their money out amid the Herbalife, Valeant and J.C. Penney losses, Ackman knew the money he had raised in Amsterdam in 2014 was secure.
It wasn’t the first time Ackman had to deal with a serious threat to his business. He shut his first hedge fund, Gotham Partners, in 2002, after making some bad bets on golf courses. He launched Pershing Square Capital Management two years later.
Following the bruising Herbalife period, Ackman said he was taking a new, lower-key approach to investing, after which Pershing Square had some of its strongest years. His current portfolio includes shares in the likes of Google
GOOG,
GOOGL,
Chipotle Mexican Grill
CMG,
and Lowe’s Cos.
LOW,
Ackman is not publicly demanding anything from the people running these companies.
But old habits die hard.
Harvard ouster
A graduate of both Harvard and its graduate business school, Ackman has long been a substantial donor to the school. He has said over the years that he has frequently offered advice on how the university should be run and how to handle its enormous endowment, but that he has often been ignored.
On X, Ackman said he initially supported Gay’s appointment to Harvard’s presidency in late 2022. But after pro-Palestinian protests on Harvard’s campus following the Oct. 7 attacks by Hamas in Israel that left more than 1,200 Israelis dead, Ackman said, he felt Gay didn’t do enough to make Jewish students feel safe.
After a highly criticized appearance before Congress, in which Gay answered questions about whether calling for genocide against Jews was a violation of Harvard’s policies by saying it depended on the context, Ackman more vocally called for her ouster. (Gay said in a New York Times op-ed Wednesday that she had fallen into “a well-laid trap” at the congressional hearing.)
Gay ultimately stepped down on Tuesday, following investigations by conservative groups and media outlets into her academic work that turned up alleged instances of plagiarism.
Now, in keeping with the corporate-raider playbook, Ackman says Harvard’s board of trustees should also step down, and its DEI office should be disbanded.
He is also turning his attention to Massachusetts Institute of Technology’s Sally Kornbluth, the only university president who testified in the congressional antisemitism hearing who has retained her job.
Meanwhile, Business Insider has published a report accusing Ackman’s wife, former MIT professor Neri Oxman, of plagiarism. Oxman acknowledged on X that, in her 330-page Ph.D. dissertation, she did not properly place language in four paragraphs in quotation marks and did not properly provide a citation in another sentence, saying she regretted the errors.
