Investing has always been about identifying opportunities and making informed decisions. One of the most successful hedge funds in the industry, Bill Ackman’s Pershing Square Capital Management, offers a masterclass in this approach. With over 56% of its $16.5 billion public portfolio concentrated in three powerful companies—Alphabet, Brookfield, and Uber—Ackman continues to showcase his expertise by betting on undervalued giants with significant growth potential.
Why Alphabet (GOOGL) is Leading the Charge
Alphabet Inc., the parent company of Google, is Pershing Square’s largest holding, making up 22.6% of the fund’s portfolio. Ackman started accumulating shares two and a half years ago when the market undervalued the company due to perceived risks in AI.
Driven by its revolutionary Google Cloud business, which grew 34% year-over-year, Alphabet continues to thrive. The integration of AI models like Gemini has further strengthened their position, improving search engagement and driving profits. Recently, Alphabet partnered with Apple to integrate Gemini AI into Siri, unlocking billions of dollars in potential revenue while creating deeper ties with key industry players.
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Brookfield Corp: A Giant in Asset Management
At 17.7% of Pershing Square’s portfolio, Brookfield Corporation represents the fund’s second-largest position. Known for its dominance in asset management and a rapidly developing insurance business, Brookfield’s growth potential is immense. The company forecasts its earnings from the Wealth Solutions insurance division will triple by 2030.
Most remarkably, its carried interest revenue—a critical profitability metric—soared by 152% in 2023’s third quarter, growing to $154 million. This surge highlights the company’s ability to deliver strong results in a competitive industry. With a focus on long-term value and returns, Brookfield presents a unique opportunity for investors looking to diversify.
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Uber Technologies: The Future of Transportation
As one of the world’s most recognized brands, Uber Technologies represents 15.5% of Ackman’s portfolio. Despite challenges in the evolving autonomous vehicle industry, Ackman’s confidence in Uber’s business model remains unshaken. Uber serves as a foundational infrastructure for self-driving car deployment—partnering with leaders like Waymo and Nvidia while aggregating demand and optimizing fleet management.
In the third quarter of 2023, Uber reported a 17% increase in monthly active users, alongside a 33% spike in adjusted EBITDA. It’s clear that the ride-sharing giant is not only thriving but is also solidifying its future through strategic collaborations in cutting-edge technology.
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The Takeaway: Investing the Ackman Way
Ackman’s concentrated investment strategy is a testament to rigorous research and a commitment to long-term growth. By focusing on undervalued companies with strong fundamentals, Pershing Square Capital Management has managed to consistently outperform the market.
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