For half an houron aFriday afternoon, trading on Wall Street came to a virtual standstill. All eyes, says The New York Times, were on the cable channel CNBC, where "a verbal fisticuffs that could rival anything on reality TV" was underway. A decade-long feud between two billionaire investors Carl Icahn and Bill Ackman had erupted into a "taunt-fest royale".
It all but drowned out debate over the subject they had supposedly come on to discuss: namely, whether the nutritional supplements company Herbalife is a dodgy pyramid scheme or a hot growth stock. It was great participatory sport. "Traders on the New York Stock Exchange burst into jeers whenever Icahn threw out an uncensored reference to bovine excrement."
Bill Ackman has often been described as the Carl Icahn of our times, says Bloomberg Businessweek. They're miles apart in terms of appearance and style: Ackman is a Harvard smoothy "who looks rather like a congressman"; Icahn, a bruiser from Queens nicknamed "King Kong" during his 1980s notoriety as a corporate raider. But their speciality is much the same. As "shareholder activists", they take stakes in underperforming or mismanaged firms to strong-arm them into change.
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Born in 1966, Ackman grew up in leafy Chappaqua, a wealthy suburb of New York, the son of a commercial mortgage broker. During high school, he bet his father $2,000 that he would get a perfect score in his exams. "He got one question wrong, but didn't lose any money," relates Businessweek. "He was so sure of himself that his dad withdrew his bet the night before the test."
After graduating from Harvard with an MBA in 1992, Ackman founded a hedge fund, Gotham Partners, with classmate David Berkowitz. He "fancied himself a real-estate expert" and, for a while, cleaned up. But a bad bet on golf courses sealed the fund's fate in 2002.
Within a year, Ackman was back in business with a new fund, Pershing Square, and keen to ride an old hobby-horse. While at Gotham, he'd shorted MBIA, the giant bond insurer, convinced that it was too exposed to risks from derivatives, says BusinessInsider.com. When regulators upheld MBIA's complaint, Ackman had been painted as "a sleazy opportunist". But at Pershing, he resumed his siege, eventually being proved right when MBIA collapsed in 2008. Ackman had called the credit crisis and made his investors millions.
Despite describing Icahn as "a great investor" during their spat ("I can't say the same about you", retorted Icahn), Ackman prefers to model himself on Warren Buffett. He considers his work "benevolent and beneficial", says The New York Observer. A noted health freak, prone to ordering egg-white and spinach omelettes, he's determined to live long enough to beat Buffett's record. There's some way to go.
The greatest moment in financial TV history
"I'm telling you he's like a crybaby in the schoolyard a major loser I rue the day I ever met the guy." Some have called it "the greatest moment in financial TV history", says Julia La Roche on BusinessInsider.com. It was certainly "the greatest hedge fund brawl in ages". But what is it about Bill Ackman that provoked Carl Icahn to lose his cool so dramatically?
Icahn is rumoured to have shares in Herbalife, the target of Ackman's latest shorting crusade. But the feud runs much deeper than that. They first fell out big time ten years ago when a deal over a real-estate company went sour. Icahn has long nursed a grudge.
Ackman can be infuriating, says Devin Leonard in Bloomberg Businessweek. "What really frustrates the managers of his target companies is how charmingly he goes about his business, which makes it hard for them to paint him as a crank and brush him off." But he's made some big mistakes in his time.
In 2009, Pershing Square IV, a fund set up specifically to invest in the Target storegroup, lost its investors $1.8bn when recession scuppered the discount retailer's shares. Pershing investors were also badly burned by a bad bet on Borders bookshops.
When thwarted, observes Joe Nocera in The New York Times, Ackman has a habit of behaving "like a spoiled child unaccustomed to being told no'" a trait that Icahn has clearly picked up on. His investment style is characterised by huge self-belief in the quality of his judgements. You can see it in his private life too, says the New York Observer.
Ackman loves to match-make, regularly hosting "demure" singles parties with his wife Karen at their $26m apartment overlooking Central Park. He claims to have personally "yenta'd" four marriages. He doesn't seem to know when to stop. Almost anyone who has met him "has either been complimented or insulted" on their appearance. "He has been known to stop people on the street corner and give them advice."
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