Hedge fund manager Bill Ackman / Facebook
Bill Ackman, the billionaire activist investor who heads Pershing Square Capitol, is concerned about the future outlook for world economies in the face of ongoing political and financial turmoil. Ackman spoke of this in a letter to Pershing’s investors in which he wrote about the recent bank failures, among other things.
“We are operating in one of the most uncertain and risky environments in decades. As of the present moment, we are in the midst of what may be the early stages of a U.S. banking crisis with the potential for it to spread globally with Credit Suisse’s recent demise,” Bill Ackman told investors in his firm’s annual report.
Ackman went on to say that financial institutions are inextricably linked and” one large banking failure can ignite another and so on.”
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“The U.S. economy relies on its large network of community and regional banks to provide access to debt capital, particularly for small and medium-sized companies that do not have access to the public capital markets,” he explained. “These banks also are major providers of real estate and construction loans as the large so-called systemically important banks have for the most part exited these lending categories other than for large capitalization, usually investment grade, corporate borrowers.”
Bill Ackman also warned Pershing Square Capitol investors of how current global geopolitical crises could affect future business dealings saying, “Geopolitical risk remains highly elevated, higher than at any time perhaps in the last 50 years.”
He cited North Korea continuing to test ICBMs and China’s building of deeper ties to Russia including potentially supplying drones and other military assets while remaining intent on taking control of Taiwan, and the war in Ukraine as examples.
Bill Ackman also cited the dangers posed by Iran to world security and how Israel is in the midst of a political crisis while being engaged in stopping Iran from obtaining nuclear capabilities, and the U.S. political system remains highly divisive with the threat of a potential default on its Treasury obligations looming, creating a highly uncertain and risky environment.
According to his official bio, Bill Ackman is an SEC-registered investment adviser founded in 2003. Pershing Square is a concentrated research-intensive fundamental value investor in long and occasionally short investments in the public markets. Prior to forming Pershing Square, Mr. Ackman co-founded Gotham Partners Management Co., LLC, an investment adviser that managed public and private equity hedge fund portfolios. Prior to Gotham Partners, Mr. Ackman began his career in real estate investment banking at Ackman Brothers & Singer, Inc. Mr. Ackman received an MBA from the Harvard Business School and a Bachelor of Arts magna cum laude from Harvard College.
