Over much of the past three decades, ive been an investor. [applause] the highest calling of mankind, ive often thought, was private equity. [laughter] and then i started interviewing. I watched your interviews, so i know how to do some interviewing. [laughter] ive learned from doing my interviews how leaders make it to the top. Jeff i asked him how much he wanted. He said 250. I said fine. I didnt negotiate with him. I did no due diligence. David i have something i would like to sell. [laughter] and how they stay there. You dont feel inadequate now because being only the second wealthiest man in the world, is that right . [laughter] in recent years, one of the most successful wall Street Investors has been bill ackman. He has built Pershing Square into one of the most successful and listened to firms on wall street. But he has been outspoken in a number of other areas including philanthropy and politics. I had a chance to sit down with him to talk about a variety of issues, including his latest bet on where the economy is going. There is general consensus in the United States in some circles that we probably have avoided a recession for the near future, we are going to have a soft landing. That is the consensus. Is that your view as well . Bill that is really hard to predict. I do think the economy is weakening. We are seeing evidence of that in some of our companies. I have some concerns. There has been a huge subsidy in terms of low Interest Rates, and most Companies Fix their rates or their debt at very low rates. Certainly Real Estate Investors did the same. That works until it does not work. What will be interesting is to see what happens when people have to reprice their debt. That could have sort of a clifflike effect. You are certainly seeing that a real estate. David markets are assuming, and markets are not always right, that there will be a fed discount cut some time next year. As we talk now, about the end of november, it is not clear what the fed will do, but some say if the fed were to cut Interest Rates next year, it would help the democrats and therefore be seen as very political. On the other hand some say the fed cannot wait until after the election because the economy might not need a stimulus. Do you have a view on what the fed is likely to do . Bill i think they will cut rates and sooner than people expect. Because what is happening is the real rate of interest, ultimately, which is what impacts the economy, keeps increasing as inflation declines. If the fed keeps rates in the middle 5s, and inflation is trending below 3 , i think that is having a retarding effect on the economy. And then, of course, again many businesses and certainly individuals have the benefit of fixed rate debt, and for companies and commercial real estate, that starts to roll off. So i think there is a risk of a hard landing if the fed does not start cutting rates pretty soon. I think the market expects some time middle of next year. I think it is more likely probably as early as q1. David for the economy itself, do you think it will really make a difference if President Trump is the republican nominee and gets elected or if President Biden is the democratic nominee and gets elected . Bill i do think Leadership Matters enormously in everything from the economy to geopolitics, and i hope we will have a broader selection than trump and biden. I think biden has done a lot of good things, but i think his legacy will not be a good one if he is the nominee. I think the right thing for biden to do is to step aside and say he is not going to run and create the opportunity for some competition of alternative david why do you think that . Bill i think he is past his prime in kind of a meaningful way. It is a bit like the ceo of a major company. It is fulltime job. And you need to be at your you know, you need to be strong. You need to be at your intellectual best. And i dont think biden is there. I do not say that with any derision of the president. I always respect the president and want whoever the president is to be successful, but i think he is clearly past his physical and cognitive peak. David you are a young, experienced investment professional. You ever thought of running for office yourself . Bill i think if the country wanted me at some point, you know, i would be open to it. I think its not my time. I still have a lot of work to do. And, you know, if i ever take that step, i would have to do i would have to find myself at a time in life where i felt ready to take on that kind of responsibility. But it is something the country would have to ask me as opposed to me putting myself out there. David lets talk a moment about the background of yourself, where you grew up, and how you came to this business. Where did you grew up . Bill i grew up in chappaqua, new york. David did you say to your parents, i want to be a Hedge Fund Investor . Bill no. David what did you want to be . Bill i wanted to be a businessman, is probably what i told them. At age 10 or something. I always had entrepreneurial jobs and things like that. David as a young boy, did you have any newspaper routes or things like that . Bill sure. My dad did not believe in allowances. He said if you want to make money, you have to work. Initially, he offered me some job opportunities. One early one was digging a 50footlong sort of ditch as i would describe it to help deal with water flow off of our property and he offered to pay me whatever it was, the dollar an hour or Something Like this. And it was a good lesson that i did not want to get paid per hour. The next time he gave me a project, i said let me price the project. And then it does not matter how quickly i get it done. I dont want to be paid on an hourly basis. So those were some of the early things. I would not call them entrepreneurial, but they earned me some spending money. In terms of early life job experiences, one of the most valuable ones was actually when i was a harvard student. There was something called the lets go travel guides, which were books students wrote about budget travel. And a friend of mine, whitney tilson, and i, who became a friend, sold advertising for those guides around the world, working out of the basement of a dorm room. We sold hundreds of thousands of dollars of advertising for those books, and we got a commission for doing so. I got a 15 promote for selling advertising. And that kind of led to this hedge fund thing. David you did pretty well at harvard. Bill yes. David when you graduated, you then did what . Bill i graduated and worked for my dad. My grandfather and his brother started a firm for financing real estate developers, what you might call a commercial mortgage brokerage. And also raised Equity Financing for developers, sold property. And i went to work there. I spent a little under two years there before going to Business School. David you went to Business School at harvard . Bill i did. David after you graduated from harvard Business School, what did you do . Bill that is when i started a hedge fund. David you said, i am out of harvard Business School, i do not need any more experience . Im just going to start a hedge fund . Bill yes. I had started investing in Business School with a classmate. Actually, i went to harvard with a plan so i could someday be an investor, and there were no courses on investing in harvard, but there were courses on finance and accounting and competitive strategy with michael porter. That was the backdrop for my education about investing. I said i would open a brokerage account. I made a little money in my real estate commissions, and this would be another year of if i lose it all, its another year of harvard Business School. If i learn something from it, maybe its a career. And i kind of fell in love with investing. It is something you can figure out whether you are good at or not in a coupleyear period of time. David so you started Pershing Square after that or right away . Bill i started with a firm called gotham partners with a friend called David Berkowitz from Business School. We started in september 1992. And, yes, we had no experience. What was interesting is none of the people who knew me in high school parents, my friends had no interest because they thought of me as a kid, but we raised money from mostly people who were themselves good investors, and i think they could see in us i guess some potential. David so you then transformed that into Pershing Square a year or two later . Bill no. So gotham was a decade. And we did kind of public equity and private equity and some Venture Capital and actually had a pretty challenging period that led to a decision to wind up gotham, and then i launched Pershing Square in january 2004, almost 20 years ago. David you specialize in picking stocks. You were not a macro investor then, were you . You were a stock picker . Bill yes, i would say we were an activist stock picker. We would buy a pretty concentrated portfolio, buy large stakes in companies that we thought were great businesses or had great assets but were undermanaged. David when you are an activist of course, that word has different meanings to different meanings to different people, but did you call management and say we would like to be on the board, tell them how to run the company . Did you do that . Was that intimidating to do that . Bill that is not exactly what we said, because again, we were young and inexperienced, but it was more that we would find a company one of the early investments was wendys, the hamburger chain, and wendys owned 100 of tim hortons in canada. And tim hortons was a profitable, successful coffee doughnut chain principally in canada. You could fairly clearly see that business was worth about 5 billion at least. It had about 450 million of operating income. It was probably worth more than that. But you could buy all of wendys for 5 billion. So literally the market was ascribing zero value to the wendys franchise and our advice to the ceo was just spin off tim hortons and focus on fixing wendys, but you can create enormous value by separating the two companies. So it was a bit like Investment Banking where we did not charge a fee. And actually, back then, because we could not get a return phone call, because we were a tiny little fund circa 2004, we hired blackstone, which had an Investment Bank at the time and we hired them to put together a fairness opinion, if you will, of what wendys would be worth if they spun off tim hortons. We wrote a letter to the board. We attached the blackstone valuation, which was nearly double where the stock was trading, and then, six weeks later, magically, they spun off tim hortons. David you did that with other companies. And being an activist was consistent with your personality to do this . Because you have to be a tough guy to call up ceos and they, i have a better idea about how to run your company than you do. Bill it was consistent with my personality. I have always been some form of an activist, yes. David and today, your focus is on activist investing or have you stopped that . Bill when no one knows who you are and you are trying to effect change in a company, you have to sort of be an activist. You have to use the media and the public platform to in some cases shame a company into doing the right thing. 20 years later, having had a meaningful number of successful engagements with companies, we dont really have to do that anymore. A lot of the stuff we have done recently has been buying into company that has great leadership. And we are happy to share ideas. In some cases, there needs to be a change in leadership, but we are able to get things done without what you might call activism. More like engaged owners of businesses. David you have done three extremely successful macro bets, one during the period of time of the housing crisis of 20072008. And that one was extremely successful. You did one again during the covid period of time, which was i think maybe your best investment ever. You made 94 times your money investment. Bill 100 times, actually. Yes. We bet that credit spreads would widen because we have to shut down the global economy. That was basically what happened. David did people say, do you have any more deals like that when when you did that one . Bill yes. David and those are hard to find. Bill the three black swan events of the last 20 years, we have been able to make big, profitable bets on, but these kind of black swan type of things hopefully occur only every seven years. Lets say. David when Interest Rates started going up, you made another macro bet that turned out to be pretty successful as well. So do you have any other macro bets you can mention now or nothing you can mention . Bill we have another one on as we speak. Actually, we are betting the Federal Reserve will have to cut rates more quickly than people expect. That is the current macro bet. David you are going to continue to be involved in this issue and try to push harvard into doing what you think they should be doing . Bill yes, im an activist, but my activism today is probably not in the corporate boardroom. Its on campus. David some hedge funds have delegated money decisionmaking to many different people in the firm. You make all the final decisions yourself . Bill we have an eight person investment team. Each idea is one that a twoperson team will do a deep dive on. I do less of a deep dive. I read the public filings. I wont be the person that talks to former employees, that kind of thing. And then we talk about every idea as a team. Ultimately, the team collectively, we dont do things that we dont have collective buyin on. At the end of the day, i retain the ultimate veto, yea or nay, and the ultimate decision on sizing. One big change i made in the last couple of years, i appointed a cio who has been with the firm about 14 years. And ryan is exceptional and has taken a real leadership role among that eightperson team. I use the word team often here because thats how the place operates. David what type of people would get a job here . You are looking for people who are smart, good academic credentials, driven . What is it you look for when you interview people . Bill it depends what role, but people on the investment team, generally, yes, they have graduated top of their class at wharton. They have always been interested in business and investing. They went to work at apollo, kkr, carlisle. We like people that get private equity experience. We think thats the best background for what we do. We are really private Equity Investors investing in the public markets. The sort of temperament of a typical private equity person fits well here. We only own really eight companies. They dont change that often. So this is not a place where a typical Hedge Fund Firm is people cycling through the idea of the week or idea of the month. Here, we may do one new idea a year. David another area investors have been very interested in lately is Artificial Intelligence. Are you investing in things related to Artificial Intelligence . Bill the most direct investment we have in ai i would say is google or alphabet. David you are a shareholder of alphabet . Bill we are a small shareholder. It is a large company. Actually, it was ai that created the opportunity for us to buy google at an attractive price. Basically, microsoft and openai had a very powerful demonstration at the launch of a product, and googles launch was a bit of a disaster. The stock got crushed on the basis of the fear that google was behind in ai. And their advertising franchise more than covered the value of the company. You got whatever they were doing in ai, if you will, for free. In our view, based on the work we had done, was that google was neck and neck if not ahead of openai in terms of business progress. David one of the pluses people would say of being a successful investor is you make a fair amount of money and you have the opportunity to be a philanthropist. You were one of the early signers of the giving pledge. Why did you do that . Why did you commit to give away half of your net worth . Bill you commit to half or more. That was my plan anyway. One day, Warren Buffett calls up and says, i want you to sign the giving pledge. So he i think it is a i have learned a lot about philanthropy. I started the Pershing Square foundation i think 17 years ago. My personal Business Plan was always to be super successful and then take the resources i dont need and redeploy them in a way that i thought was best for society. I do think that philanthropy is often not the best way to solve problems. I do think that capitalism and forprofit Business Models are generally the best way to solve problems, but there are still problems, societal ones, that cannot be solved in traditional capital markets. There is sort of a gap so those are the areas we tend to focus on. David one of the institutions you have been philanthropic with is your alma mater, harvard. Recently, you have been public about your criticism, the way harvard handled the events of october 7 and their aftermath. Could you talk about that now . Bill the first reaction of a group of 34 harvard student clubs on the morning after october 7 was to put out a statement saying that israel was 100 responsible for the acts of hamas. And my view on that was, you know, thats ridiculous, and thats more than ridiculous, i would say. And these students need to have some judgment and perspective. You can come out and say, look, im very unhappy about israels treatment of palestinians in the west bank or you can say we can talk about the gaza strip, but you cannot support terrorists, particularly terrorists that rape and pillage and murder and burn and take hostages. And so my first point there was not so much directed at harvard, but, you know, love to know i got actually a text from a ceo in my industry. Hes like, bill, we would like to know who the students are behind these clubs so i make sure i dont inadvertently hire them, so i tweeted out, sort of made that point, and caused a bit of a firestorm. I got a lot of pushback. Why are you picking on students . I said, look, you cannot hide behind a corporate entity if you are going to support terrorism. Thats a major decision. So that was sort of my first initiative, if you will, at harvard. And then there were protests on campus and the protests were supportive of terrorism and supportive of things like a group of students shouting intafada. Free palestine and from the river to the sea. I raised this issue. Harvard says they have a commitment to free speech. There is certain speech that is certainly permissible under the first amendment, and then there is certain speech that i would say is undesirable on a campus. David have you said you are not going to donate to harvard anymore . Have you said you are not going to hire these Harvard Students anymore . Or people like those people . Bill no. Number one, we are not going to hire anyone that supports terrorism at Pershing Square. I have not made any statements about economic support for harvard. I want harvard to do the right thing. I dont want to threaten one way or another. Thats not my approach. But i do think harvard needs to do a deep examination of, one, theres been a rise of antisemitic incidents on campus. And the university has done very little. Their reaction was, lets form a task force. And i think, again, had this been another ethnic group where this kind of activity took place, harvard would be suspending the people involved. Not disallowing david you are going to continue to be involved in this issue and try to put harvard to do what you think they should be doing . Bill absolutely. I wrote a pretty thoughtful letter that was you know, i think 25 Million People saw it on twitter, and remarkably, i did not get a response, which, to me, is a very bad and weak approach. Literally no response. No acknowledgment. No, dear bill, i hear what you are saying. Nothing. So im an activist, but my activism today is probably not in the corporate boardroom. It is on campus, and this is not just a harvard problem. And it is an nyu problem. It is a university of pennsylvania problem. It you know, the more i examine the issue, the more woke, the more leftleaning the institution, the more antisemitism, which is a very unfortunate thing. David you built pershing from nothing to what it is today, a very successful hedge fund. What makes you most proud, having done that from the start or other things you have done in your philanthropic life . What are you most proud of having achieved in your life so far . Bill a number of things. I love having a company where i believe pretty much everyone here is excited to come in to work every day. I think we have made a meaningful contribution to a capitalist system and the functioning of how probably the most Significant Impact weve had we were sort of an early activist, and as you probably know, the nature of boardrooms 20 years ago is meaningfully different today, and a big part of that is the rise of shareholder activism. I think we played an Important Role there. I think that has led to the u. S. Capital markets and the u. S. Stock market being one of the bestperforming markets in the world, and that has a huge impact on peoples pensions, peoples savings, peoples livelihood, on u. S. Competitiveness, on our national security. And so, i think the good news about my day job is it is fun. It is profitable. It benefits our investors, but it also benefits the market generally. So i think that is an important and good contribution. Philanthropically, we have invested 600odd Million Dollars in a wide range of initiatives. And, you know, a number of those it is a bit like investing. Hopefully you have a few googles. And we have a couple of those a number of those philanthropically, and i do feel like we have invested money on which society has earned an attractive return. Jonathan today, we are in conversation with the authors of permacrisis a plan to fix a fractured wor