Bill Ackman bounds onto the stage in the ballroom of the Crowne Plaza Hotel in midtown Manhattan in front of hundreds of his peers: the crème de la crème of hedge funds, law firms, endowments and large pension funds. It’s early April, and Ackman is determined to give the Active-Passive Investor Summit a preview of what he internally calls “Pershing Square 2.0”³: his rebirth as a kinder, gentler investor, more focused on building companies that last than on making quick trading profits.
The ballroom responds with a yawn.
So, after a pause, the billionaire poster boy for activist investing–the more polite name for what used to be dubbed corporate raiding–pivots back to his comfort zone, unleashing a barrage of accusations about one of his most infamous and controversial positions, Herbalife, the supplements seller that he’s bet $1 billion against and calls a pyramid scheme. “We know they have been or are looking to hire criminal defense counsel,” he says cryptically of Herbalife's top executives, as Twitter lights up like a Christmas tree. (Herbalife denies Ackman’s claims.)
Headlines soon appear across the Internet and on CNBC: “Ackman: HLF Execs Hiring Own Lawyers an Ominous Sign.” After-hours volume in Herbalife stock heats up, but the shares fall only 0.3%.
What about Pershing Square 2.0? Not a mention, even though the biggest move for last year’s hottest money manager–his hedge fund was up 37% (versus 2% for the average hedge fund), nearly doubling his net worth to $2.5 billion–hides in plain sight, 10 miles west of the Las Vegas Strip.
Take a trip out there via U.S. Highway 215, toward the breathtaking but desolate beauty of Red Rock Canyon National Conservation Area, and you’ll find the largest retail development in the nation since the financial crisis, rising up from the sagebrush. Some 1.4 million square feet of shops, offices and restaurants ranging from Macy’s to Apple, Trader Joe’s to Wolfgang Puck’s–the kinds of offerings that hark back to the days before the great mall die-off. From speakers submerged beneath the sidewalks of the city’s outdoor mall you can hear Frank Sinatra’s “The Best Is Yet to Come.”
And it will: Potential customers are filling the thousands of McMansions and townhomes being thrown up around the mall by the likes of Lennar, Pulte and Toll Brothers. Water crisis? Apparently not in Summerlin, Nev., a planned community where new golf courses, swimming pools, bike trails, schools and churches dot the palm-lined streets and cul de sacs in neighborhoods with names like Segovia, Aspenglen and Sterling Ridge that spread across 35 square miles.
Summerlin is a key asset for a real estate company with a legendary provenance and a low profile: the Howard Hughes Corp. HHC +3.18%, 26% owned by its chairman, Ackman. But it’s far from the only asset: Summerlin is one of four planned communities and 30 real estate properties owned by Howard Hughes, which in 2014 reported $635 million in revenues and $190 million in operating profits on $5.1 billion in assets, with 45 million square feet of retail, commercial and residential land in its development pipeline, from Houston to the exurbs of Washington, D.C. Howard Hughes is rebuilding New York’s South Street Seaport and owns 60 acres of beachfront property in Honolulu that should yield nearly two dozen luxury towers.
“Howard Hughes is the only company that I am, in effect, an executive of,” says Ackman, who has agreements that render him unable to invest directly in real estate or any other private companies through his hedge fund, Pershing Square. “It is the one we have the most control and influence over, and the most amount of reputational equity invested.”
Well, not much yet. The real estate community almost never talks about Howard Hughes. Nor does Ackman. But that will change, as he uses it as a holding company for his Pershing Square reinvention. Just as Summerlin offers families, mostly refugees from bustling big cities like L.A., Chicago and New York, a chance for low taxes and a fresh, highly curated start, Howard Hughes offers Ackman a chance to change his reputation from the modern-day corporate raider everyone loves to hate into a corporate empire builder.
continue reading: http://www.forbes.com/sites/antoinegara/2015/05/06/bill-ackman-baby-buffett-howard-hughes/
