This weekend BARRON'S ran a wonderful profile by Jon Laing of hedge-fund manager Bill Ackman's PERSHING SQUARE CAPITAL MANAGEMENT titled, "The Happy Warrior". However, it was the cover title that caught my eye, "America's Amiable Activist".
The term "Activist" in investment circles usually conjures up the stereotype of the liberal gadfly railing against the corporate machine to change their ways, not kill snail-darters and butterflies, ceasing making bullets, booze, cigarettes, or only employee union workers. Here, however, the term "activist" really means "rational investor". For what Bill Ackman has done is engage companies he and his investors have "invested in" and coached, prodded, and charmed the coporate boards and managements of these firms to make better use of their corporate capital.
As some mutual fund managers might say, "In his doing this, he has essentially given other investors in these very same companies a free ride; his actions have not only lifted Pershing Capital's boat, but every fund manager who has invested in these same companies." Imagine if more professional investors acted more like Bill Ackman and, in turn, their actions in engaging corporate managers and boards created the kind of success and returns Bill Ackman's clients enjoy.
Acting more like an interested and concerned investor just might lead to better returns for everyone and even a more robust economy. I thought this is what Capitalism was all about.
