Bill Ackman & Howard Hughes: A Berkshire Hathaway Successor?
Bill Ackman is making a bold move, aiming to transform Howard hughes Holdings (HHH) into a Berkshire Hathaway-style conglomerate after a $900 million investment in May 2025. This strategy, which mirrors Warren BuffettS approach, involves building an insurance business to generate the “float” needed for further acquisitions. Though, turning a $4.1 billion real estate developer into a trillion-dollar empire isn’t without challenges, including high capital costs and investor skepticism. Ackman, now executive chair with significant voting power, is betting on HHH’s potential despite market undervaluation.News Directory 3 provides the latest insights into Ackman’s ambitious plan. Could lightning strike twice in the world of real estate? Discover what’s next …
Ackman Aims to Transform Howard Hughes Into Next Berkshire Hathaway
Updated june 06, 2025
bill Ackman’s $900 million investment seeks to reshape Howard Hughes holdings Inc. (HHH) into a conglomerate akin to Berkshire Hathaway Inc. Ackman believes HHH’s current standing is “vastly superior” to Berkshire’s when Warren Buffett took the reins in the 1960s. However, turning the $4.1 billion real estate developer into a trillion-dollar empire faces considerable obstacles, including high capital costs and investor doubts.
Ackman, now executive chair after a $900 million investment, secured 40% of the voting power. The investment, made through 9 million newly issued shares at $100 each, boosts Pershing Square’s ownership from 37.6% to 46.9% and adds cash to the company’s balance sheet. He previously held the executive chair position from 2010 to 2024.
HHH reported net income from continuing operations of $0.21 per diluted share for the frist quarter of 2025,a turnaround from the previous year’s loss,with $72 million in quarterly net operating income. Despite this, Ackman told the Financial Times that Wall Street undervalues the company, assigning it a high cost of capital due to its below-investment-grade rating.
“It’s not a business that Wall Street has assigned an appropriate value to. We’re a below-investment-grade company today to wich equity investors have assigned a high cost of capital,” Ackman told the Financial Times.
The Berkshire Blueprint: Insurance First
Ackman intends to replicate Buffett’s strategy by first acquiring or building an insurance business for HHH. He told CNBC he prefers building from scratch to avoid inheriting existing liabilities.Insurance provides access to “float”—premiums collected before claims are paid—offering investable capital that fueled Berkshire Hathaway’s expansion.
can Lightning Strike Twice in Real Estate Progress?
Howard Hughes Holdings in the mid-2020s differs significantly from Berkshire Hathaway in the 1960s. HHH already has a $4.1 billion market cap, making exponential growth more challenging. Its below-investment-grade credit rating increases financing costs for acquisitions, though Ackman’s investment aims to improve this. Unlike Berkshire, Pershing Square will collect a quarterly fee of $15 million, plus 1.5% of market cap increases above inflation.