Bill Ackman

Ackman is a concentrated, long-hold, activist investor. He typically owns 5–10 positions at a time — sometimes fewer.

Each one involves exhaustive research. If he's buying, he has usually already built a 100-slide deck explaining exactly what's wrong with the company and exactly what needs to change to fix it.

His style is the opposite of index investing. He wants a controlling voice at the table.

He wants to talk to the CEO. He wants the board to change.

That's the "activist" part — he's not just buying a stock and hoping it goes up. He's buying it with a plan to force the thing that will make it go up.

The strategy works until it doesn't. When the thesis is right, he wins massively.

When the thesis is wrong and he's also very public about it, the losses are spectacular.

Seth Klarman

Klarman is the most orthodox value investor of his generation. Pure Graham and Dodd — buy things for significantly less than they''re worth, insist on a large margin of safety, and be patient.

Very patient. He specifically hunts for things that other investors have been forced to sell for non-fundamental reasons: bankruptcies, spin-offs, index fund rebalancings, distressed situations where complexity drives away everyone else.

His book Margin of Safety was published in 1991 in an edition of 5,000 copies, went out of print, and now sells for over $1,000 on the secondary market. Harvard Business School uses it as a course text.

Digital copies circulate informally online. The irony of a book about value investing being itself severely mispriced is not lost on anyone who reads it.

Bill Ackman

Ackman's core belief is that markets frequently misprice assets when the story around them is either too negative or too complicated. He looks for businesses he can understand deeply, with a gap between what the market thinks they're worth and what he thinks they're worth.

He's talked extensively about asymmetric bets — situations where you can be wrong and lose a small amount, but right and make a lot. He believes activist investing works because most company boards are too comfortable and most CEOs have too little accountability.

He thinks public pressure, when backed by real analysis, is a legitimate tool for creating value. Whether that makes him a hero or a villain depends on which company you ask.

Seth Klarman

Three rules he returns to constantly. First: always insist on a margin of safety.

The future is uncertain. If you only buy things that look cheap under pessimistic assumptions, you protect yourself from your own mistakes.

Second: be a long-term owner, not a short-term trader. Price converges to value over time — not tomorrow.

Third: hold cash when you can''t find good opportunities. Cash is not idle.

Cash is optionality — it means you can act decisively when panic creates real bargains.

Bill Ackman

Ackman runs highly concentrated books and uses leverage. That's the opposite of conservative.

He'll put 20–30% of the fund in a single position if he believes in it. He also uses options and credit derivatives — his March 2020 COVID hedge was built using credit default swaps, instruments most retail investors have never heard of.

He famously described his risk approach as: "I only invest when the downside is zero and the upside is unlimited" — which sounds great until you lose $4 billion on one trade. The honest version is: he's a high-conviction investor with a high tolerance for pain on the way to being right.

Seth Klarman

He is the most conservative major hedge fund manager operating today. He has said publicly he would rather earn 6% sitting in cash than take a risk he doesn''t understand.

His view of risk is Graham''s view: the probability of permanent loss of capital. Volatility doesn''t scare him.

Permanent loss does.

He''s also been an outspoken critic of short-term trading culture that treats markets as price-discovery engines rather than ownership stakes in real businesses. He sees most of what passes for investing as speculation dressed up in confident language.

Bill Ackman

Ackman has a taste for the finer things and doesn't pretend otherwise. He owns a large Manhattan apartment, he's been photographed at high-end charity events, and his social circle overlaps with New York media, finance, and political elite.

He and his second wife, Neri Oxman, have a high public profile — she's a former MIT professor and design pioneer. He gave $25 million to Harvard (his alma mater), though the relationship became famously strained in 2023 when he led a very public campaign against Harvard's president over campus antisemitism, ultimately contributing to her resignation.

He is not a guy who stays quiet about anything.

Seth Klarman

He lives in the Boston area. He''s a significant political and philanthropic donor — primarily to causes related to Israel, Holocaust education, and academic institutions.

He''s reportedly deeply private, compartmentalising his professional and personal lives completely. He is, by multiple accounts, obsessive about physical fitness.

He does not seek press coverage and actively avoids it.

Bill Ackman

The COVID hedge in March 2020 is the one. As markets started selling off in late February, Ackman quietly spent $27 million buying credit default swaps — basically insurance on corporate bonds defaulting if the economy collapsed.

He then went on CNBC on March 18, 2020, visibly emotional, and said "hell is coming." The market kept dropping. Three weeks later, he unwound the trade.

The $27 million had turned into $2.6 billion. That's roughly a 100x return in under a month.

He used the proceeds to buy stocks at the market bottom. He then made another fortune as markets recovered.

The whole sequence — hedge, cry on TV, buy the dip, profit — is one of the more remarkable individual trade sequences in recent hedge fund history.

Seth Klarman

His 40-year sustained performance is the win. There''s no single flashy trade that defined his career — which is itself kind of the point.

During the 2008 financial crisis, Baupost deployed significant capital into distressed mortgage securities and bank debt, buying things that were trading at catastrophic discounts because forced sellers had to liquidate. The returns on those positions were exceptional.

He was ready because he''d been holding cash waiting for exactly this type of opportunity.

Bill Ackman

The Valeant Pharmaceuticals disaster is the one. Ackman built a massive position in Valeant starting in 2015, eventually owning about $4 billion worth of shares.

His thesis was that Valeant's model — aggressively raising drug prices and cutting R&D — was brilliant. Congress, journalists, and eventually the SEC had a different view.

The stock collapsed from $260 to under $10. Ackman spent months publicly defending the position, appearing on CNBC repeatedly to explain why it would recover.

It didn't. He finally sold in 2017 at a loss of approximately $4 billion.

It's the most expensive public loss in hedge fund activism history. The lesson he's cited: don't get emotionally attached to a position, and be faster to recognize when the fundamental thesis has broken.

Seth Klarman

By his own account, his biggest mistakes have been not buying enough when he was confident. He''s written about passing on things he understood and believed in because he was waiting for a slightly better price that never came.

The classic value investor error of omission.

He''s also been early — and expensive — on some macro concerns. He has been warning about Federal Reserve policy and deficit spending for over a decade.

He''s probably right about the underlying risks. The timing has cost him relative returns.

Bill Ackman

Bill Ackman grew up in Chappaqua, New York, the son of a real estate finance chairman. He was a history major at Harvard — class of 1988 — then went straight to Harvard Business School.

His first venture was Gotham Partners, a real estate and value investing fund he started in 1992 with a Harvard classmate. It was a disaster.

The fund made concentrated bets on illiquid real estate and had to be wound down by 2003 under serious investor pressure and SEC scrutiny.

He didn't quit. In 2004 he launched Pershing Square Capital Management, this time with a clearer focus: take large stakes in companies, go public with his thesis, and use activist pressure to force management changes.

The approach worked. His reputation was built on detailed, public investment presentations — sometimes running 100+ slides — that became must-reads on Wall Street.

He turned activist investing into something that felt more like journalism than finance: research a company, find what's broken, publish everything, and bet heavily on being right.

Seth Klarman

Seth Klarman grew up in Baltimore, Maryland. He studied economics at Cornell, then got his MBA from Harvard Business School in 1982.

He went straight from Harvard to work for Max Heine and Michael Price at Mutual Series Fund — two of the best value investors of that era. After two years he co-founded Baupost Group in 1983 with $27 million from four Harvard endowment families.

He was 25. He has been running it ever since.

Baupost is based in Boston and has consistently avoided the publicity-seeking behaviour of most large hedge funds. Klarman doesn''t do television.

He doesn''t do conferences. He gives very few interviews.

His annual letters to investors circulate informally because investors share them despite the confidentiality agreements. He has been compared to Warren Buffett more than almost any other living investor — in both style and the quality of his thinking.

Bill Ackman

Pershing Square Capital Management is his flagship hedge fund, managing around $16 billion. His most famous public positions have included Canadian Pacific Railway, where he pushed successfully for a new CEO and a turnaround that made Pershing Square hundreds of millions.

He held a massive position in Valeant Pharmaceuticals from 2015 to 2017 — which will come up again. He took a huge bet on General Growth Properties during the 2008 financial crisis when no one else would touch it.

That one returned over $1 billion.

He has also done business on the other side: Pershing Square Holdings is his publicly listed vehicle on Euronext Amsterdam, which lets retail investors access his fund — unusual for a hedge fund of this size. He's been a major Burger King and Restaurant Brands International investor, and he backed Fannie Mae and Freddie Mac preferred shares in a long-running legal battle with the government.

Seth Klarman

Baupost Group is the whole story. Founded in 1983 with $27 million, it now manages around $30 billion.

The fund focuses on distressed securities, special situations, bankruptcies, and assets where other investors can''t or won''t participate — either because of regulatory constraints, illiquidity, or sheer complexity.

He''s famously kept 30–50% of the portfolio in cash during periods when he can''t find attractively priced opportunities. Most fund managers feel pressure to be fully invested at all times.

Klarman has explicitly said that holding cash is an active decision — not a failure to deploy, but a choice to wait for real value.

Bill Ackman

Harvard College, BA in History, 1988. Harvard Business School, MBA, 1992.

He's been a major Harvard donor — and major Harvard critic — throughout his career. The irony of his most public fight being with his own alma mater was not lost on anyone.

Seth Klarman

Cornell University, BA in Economics, 1979. Harvard Business School, MBA, 1982.

Went straight from Harvard to join Max Heine and Michael Price at Mutual Series Fund — two of the most important value investors of that generation. That two-year apprenticeship shaped everything.