CNBC Excerpts: Pershing Square CEO Bill Ackman Speaks with CNBC's Andrew Ross Sorkin on 'Squawk Box' Today

CNBC

05-05-2025

WHEN: Today, Monday, May 5, 2025
WHERE: CNBC's "Squawk Box"
Following are excerpts from the unofficial transcript of a CNBC interview with Pershing Square CEO Bill Ackman on CNBC's "Squawk Box" (M-F, 6AM-9AM ET) today, Monday, May 5. Following are links to video on CNBC.com: https://www.cnbc.com/video/2025/05/05/bill-ackman-whats-important-is-that-tariffs-get-resolved-in-the-relative-short-term.html and https://www.cnbc.com/video/2025/05/05/pershing-square-ceo-bill-ackman-i-wouldnt-bet-against-berkshire-post-buffett.html.
All references must be sourced to CNBC.
ACKMAN ON BUFFETT
BILL ACKMAN: Buffett's been my, you know, one of my most important heroes, certainly in business and I would say in life.
ACKMAN ON HOWARD HUGHES
ACKMAN: What we do is we own all the land. We sell lots to homebuilders. Homebuilders build homes, people move in. And then the company over time builds the amenities, builds the community. I call it a bit like SimCity, but in real life. And eventually we build high rise office buildings and, you know, apartment buildings. And it's a great business, but it consumes a lot of capital because you have to keep building the cities. Now, the cities, at a certain point in time get to a level of maturity where they start actually throwing off cash. And that's really where we are with Howard Hughes today.
ACKMAN: Howard Hughes as a real estate company today is not going to throw off a lot of cash to your point, but five years from now, ten years from now, it's going to produce more cash that it can generate.
ACKMAN: Howard Hughes today couldn't afford to hire the 40 odd Pershing Square team members, the eight investment team members. So we're going to bring all the resources of Pershing Square to Howard Hughes, and we're going to charge a 15, we're going to get paid a $15 million fee, and we're going to get paid a incremental fee to the extent that the market cap of Howard Hughes grows at a rate in excess of inflation, we're going to get a 1.5% fee on the increase in market cap, basically above today's market cap. Let me finish for a second. And only if the market cap on a per share basis. So if we issue a bunch of stock to make an acquisition that doesn't increase our fees, it actually reduces the fees as a percentage.
ACKMAN ON LIKELIHOOD OF BUILDING INSURANCE COMPANY
ACKMAN: I think it's more likely that we will build an insurance company. In fact, we have a person that is a phenomenal executive in the industry that we're just beginning a conversation with that's intrigued by what we're doing. And I like the idea of building from scratch because you don't assume a bunch of other people's kind of liabilities. And I think, you know, he's a super talented executive and hopefully we can make a deal with him. But that would be a kind of more intrigued with the idea of building something from a blank sheet of paper.
ACKMAN ON BERKSHIRE HATHAWAY
ACKMAN: Greg Abel is known to be a superb operator and a very good allocator of capital, certainly in the businesses that he's managed. I think it's yet to be proven that the current management team has the, you know, capability that Buffett has had to obviously buy businesses and it's more challenging now because of the scale. So I don't I think for sure the businesses will be run arguably, you know, potentially even better than they've been run historically because now a great real operator focused on that running the company.
ACKMAN: I think they're going to start returning capital.
ANDREW ROSS SORKIN: You do? I think the form of dividends.
ACKMAN: I think they'll, yeah dividends. I think they will be a little bit more aggressive about buying back stock. I don't see Berkshire waking up in six months and Berkshire announcing $100 billion acquisition. I think the new CEO will be and the new board, not the new board, the current new CEO and the current board will be a little bit more careful on the first deals because if Berkshire's first deal turns out not to be a good one, you know, I think that the market will kind of frown upon that. But I think the business will do very well.
ACKMAN: I wouldn't bet against Berkshire.
ACKMAN ON INFLATION
ACKMAN: I think inflation is largely been wrung out of the economy. Right. Price of eggs. I think the price of energy is coming down and it's going to stay down. And I think, you know, obviously very, very good for the economy.
ACKMAN ON TARIFFS & THE FED
ACKMAN: I think tariffs if they were they ultimately get resolved will increase the cost of some by a percent of some products. But it's not like inflation that will compound. It's more like a one-time reset. And then we'll we won't have meaningful inflation from there. And I think that's a backdrop in which the Federal Reserve toward the end of the year, could start. It could have a few kind of rate cuts.
ACKMAN: I think a small cut relatively soon I think makes sense because I think what's happened is, you know, we've we've Q1's benefited by some frontloading of purchases and inventive tariffs. The uncertainty associated with, you know, Liberation Day, so to speak, is caused many businesses to pause and wait to see what's going to happen. And that's going to be reflected in Q2. And so I think you could, you know, there's definitely a deceleration in economy and, you know, now. Absolutely. So the question I think what's important is the tariffs get resolved in the relative short term because I do believe if we're still dealing with the tariff thing is still major headlines.
ACKMAN ON CHINA
ACKMAN: The right thing to do, in my view, is we pause on China. Let's give it a little more time. Maybe it's 180 days because we got we're going to be busy here. What that does is it stabilizes the risk to the US economy and small businesses around the country. But China is now highly incentivized to make a deal. Why? Because because of the shock of 145% of the potential for high tariffs against China, every company that's producing in China and selling to the US is moving their supply chains elsewhere.
ACKMAN ON HARVARD
ACKMAN: Harvard became, over time, a political advocacy organization for one party. When a university goes from being a university to a, you know, affecting, you know, becoming a political advocacy organization, it's not it doesn't deserve nonprofit status. I mean, and they have to Harvard should be a place where students go to learn and the best research gets done. It shouldn't be a place that is allowing pro-terrorist organizations on campus that only allows certain kinds of thinking and speech on campus. That's that's a political advocacy organization. It's not a university. So I don't think we're going to end up there where Harvard loses its tax-exempt status. I want Harvard to succeed. You know, it's been very important to me over time, but really, it got itself to a very bad place. And Alan Garber is a good president, but he's not managing. You know, the mismanagement here is Penny Pritzker. If this were any other kind of corporation, the notion that she's still chairman of Harvard, leading the charge here and in terms of how Harvard managed everything from COVID, I know we have to go, but it's an important topic to the endowment management, to waste, to free speech, to who they hired as president of the university. It's time for a change in leadership in the board at Harvard.