Shares of Howard Hughes Holdings (NYSE: HHH) jumped nearly 3% on Monday following news that billionaire investor Bill Ackman has increased his stake in the real estate company, advancing his long-held goal of building a diversified holding firm modeled after legendary investor Warren Buffett’s Berkshire Hathaway (NYSE: BRK.B).
Ackman, through his hedge fund Pershing Square Capital Management, invested an additional $900 million in Howard Hughes, raising his ownership from 37.6% to 46.9%.
The Texas-based developer, known for its master-planned communities in Texas, Hawaii, and Nevada, will now shift focus toward acquiring controlling interests in smaller companies.
“We believe HHH is a superb platform to build a faster-growing, high-returning holding company,” Ackman said, citing Pershing Square’s investment criteria of business quality and durable growth.
The move comes just days after Warren Buffett, a long-time inspiration to Ackman, announced he would step down as CEO of Berkshire Hathaway later this year. Ackman and his team were present at Berkshire’s annual shareholder meeting in Omaha, where the announcement was made.
Ackman, who built his reputation as a corporate activist, was previously on the Howard Hughes board for over a decade and served as chairman until stepping down last year. He will now return as executive chairman. Ryan Israel, a Pershing Square partner and chief investment officer, will also assume the role of CIO at Howard Hughes.
The company had earlier rejected a similar $900 million offer from Ackman for 10 million shares, saying the proposal was “not acceptable in its current form.”
Despite the leadership changes, CEO David O’Reilly will continue in his role with expanded responsibilities, and no changes are planned for the broader employee base. Pershing Square has also agreed to cap its voting power at 40% and limit beneficial ownership to 47%.
In a conference call in February, Ackman assured investors the move won’t affect how Pershing Square manages its other investments. While the hedge fund will continue to buy large stakes in major companies, Howard Hughes will focus on taking control of smaller businesses.
As of the latest update, Howard Hughes Holdings (NYSE: HHH) shares are up 0.97%, trading at $70.07 in pre-market trading.
Maria Reed is a financial journalist with a passion for covering US equities. She joined the ABBO News team in June 2023. Maria holds an M.S. degree in International Economics and Finance from Otto-von-Guericke University in Magdeburg and is a CFA Level 2 candidate. Read Full Bio
