Billionaire Investor Bill Ackman Bets Big and Wins Big. Is a Concentrated Portfolio Approach for Everyone?
Billionaire Bill Ackman is one of the world's most renowned investors. He's a value investor who runs a highly concentrated portfolio, with just 15 stocks as of the end of May. Given his strong long-term track record, it's natural for investors to wonder: "Is a concentrated portfolio right for me?" Among hedge funds, running a concentrated long portfolio isn't unusual. Fund managers are paid based on performance, so they often load up on their highest-conviction ideas. That makes a lot of sense.But let's peel back the onion a bit. I previously worked as an equity analyst at a hedge fund with about $600 million in assets under management. While that sounds like a lot, it's modest compared to Ackman's $18 billion Pershing Square portfolio. Like many others, we ran a concentrated book on the long side, typically 15 to 20 positions.Continue reading
Billionaire Bill Ackman is one of the world's most renowned investors. He's a value investor who runs a highly concentrated portfolio, with just 15 stocks as of the end of May. Given his strong long-term track record, it's natural for investors to wonder: "Is a concentrated portfolio right for me?"
Among hedge funds, running a concentrated long portfolio isn't unusual. Fund managers are paid based on performance, so they often load up on their highest-conviction ideas. That makes a lot of sense.
But let's peel back the onion a bit. I previously worked as an equity analyst at a hedge fund with about $600 million in assets under management. While that sounds like a lot, it's modest compared to Ackman's $18 billion Pershing Square portfolio. Like many others, we ran a concentrated book on the long side, typically 15 to 20 positions.
