Can Bill Ackman Make Howard Hughes Holdings Into the Next Berkshire Hathaway?

Bill Acman’s investment of $ 900 million in Howard Hughes Holdings Inc. (HHH) is to convert the real estate developer of $ 900 million to Berkshire Hathaway Inc. (BRK.A; BRK.B) in a group. Acman says HHH’s position is “much better” for the introduction of Berkshire under Warren Buffett in the 1960s. However, the construction of the next trillion-dollar empire faces significant obstacles, including high capital costs and doubtful investors.

Bill Acman and Howard Hughes Holdings

It was a failed textile business when Buffett began acquiring shares of Berkshire Hathaway in 1962; It will take several decades to convert it into a group of trillion-dollars. Ekman says he can follow a similar route with Howard Hughes Holdings, a real estate developer focused on master-planned communities with a market cap of May 2025, which is around $ 4.1 billion.

Although HHH has often fought, for the first quarter of 2025, it reported net income from continuous operation of $ 0.21 per thin shares, with the loss of the previous year, with a quarterly net operating income of $ 72 million. Ackman’s investment of $ 900 million per share per share for $ 900 million per share added cash to the company’s balance sheet, while Persing Square’s stake increased from 37.6% to 46.9%.

The deal gives Ackman 40% voting power and returns it to the role of an executive president – his position in the firm until retired in 2024 to 2024.

“It’s not a business that Wall Street has assigned a fair price. We are a lower-two-country company today, for which equity investors have assigned a high cost of capital,” he said that financial Times,

The Berkshire Blown: Insurance First

Ackman says he is looking to get or create an insurance business for HHH for the first time. “I like the idea of ​​construction from scratches, as you don’t consider a group of liabilities of other people,” Ekman told CNBC.

It follows Buffett’s playbook properly: Insurance provides access to investable capital through “float” (premium collected before paying claims), which became a foundation for the growth of Berkshire Hathaway.

Can electricity strike twice?

In the mid -2020s, Howard Hughs Holdings are in a very different position compared to Berkshire Hathaway in the 1960s:

• Different start: Unlike the onset of Hambler of Berkshire, HHH already has a market cap of $ 4.1 billion, making it difficult to achieve the same rate of growth.
• Capital cost: Howard Hughes has a below-investment-grade credit rating, which will make the acquisition more expensive to finance. Acman hopes that his cash infusion will improve the company’s credit profiles.
• Cut -down: Unlike Berkshire, who does not charge any management fee, the purse square will collect a quarterly fee of more than $ 15 million of any increase in the market cap above inflation.
• A different time: Even Buffett cannot be buffett. If it is starting today, hedge funds and an army of private equity firms are facing fierce competition. The famous price investor can find it very difficult to present the companies that promote Berkshire’s growth.

AcMan Cipport Sinkhole

While Ekman has had successes such as the Burger King-Time Hortmen merger, he also had great failures, by losing billions on Valent Pharmaceuticals and First Union Real Estate. In addition to this mixed record, when Ackman served as an HH chair from 2010 to 2024, the company made a devastating bet on changing the South Street Cottage of New York, burning through $ 1 billion with alleged little returns.

A major Howard Hughes shareholder said, “I don’t think there is evidence that Ekman has done a good job suggesting things for Howard Hughes.” financial Times,

Bottom line

Ekman’s plan to mold the havard hauzes holdings into a diverse group in the vein of Berkshire Hathaway faces difficult possibilities, including the challenge to score high capital costs and a company of $ 4.1 billion. They will also need to prove that the “Buffet Playbook” can still flourish in today’s different markets.