**Bill Ackman, one of the most successful and well-known hedge fund managers in the world, has a remarkable approach to investing that is rooted in his ability to generate market-beating returns through a select few high-conviction stocks.**

Bill Ackman likes to keep his hedge fund, Pershing Square Capital, invested in just a few high-conviction companies. This strategy contrasts with the typical diversified investment portfolio as it allows him and his team to focus their efforts on a small number of companies that Ackman genuinely believes will achieve significant growth and returns. Investors can learn from this approach by focusing on selectivity and avoiding the pitfalls of spreading resources too thinly. As such, Pershing Square's investor updates and quarterly disclosures with regulatory bodies offer valuable insights into investing ideas.

Ackman prefers to accumulate a large amount of shares in his top choices over an extended period. This enables him to achieve higher returns and avoid unnecessary risks associated with frequent buying and selling transactions. The publicly disclosed holdings often provide early warnings for other potential investors, illustrating how significant the positions are.

Let us examine three of Ackman's high-conviction investments in more detail:

One key holding is Uber (19.7% of Pershing Square's portfolio). Prior to announcing this position, Bill Ackman accumulated 30.3 million shares at the start of 2025, and it was revealed by Pershing Square's first-quarter filing with regulatory bodies as their largest position overall. Since then, the stock has witnessed a significant surge and is now trading near an all-time high.

Uber counts over 170 million total monthly active users as of Q1 2025, and despite emerging risks from self-driving technology, this presents both a challenge and opportunity for Uber due to its extensive user base offering access through various platforms. Uber has inked partnerships, including one with Alphabet's Waymo in multiple cities, providing an additional potential source of revenue.

Operating results are also promising, with gross bookings up 14% last quarter. The resulting operating leverage allowed EBITDA growth of 35%, and an impressive increase in free cash flow conversion rates to over 100%.

**In spite of the substantial price gain, the current valuation remains attractive at around 23 times forward EBITDA estimates as of writing due to its growth prospects exceeding 30% annually for the next few years. **Management's financial objectives are within target, which underpins Uber's value today compared with other listed peers in a fair trading environment.

In another significant holding, Ackman has invested in Brookfield Corporation (18.4% of Pershing Square). This company offers diverse businesses and management expertise beyond traditional asset managers like asset management itself, real estate segments. The substantial cash generation enables it to invest further capital through its operating portfolio and return more funds to investors by doing buybacks.

Brookfield's wealth solutions business also allows additional capital through float management strategies, which are often used effectively in investment endeavors as demonstrated by their consistent performance over the past five years with a growth rate of 19% on average during that period. A 16 compound annual growth rate for the next four years is estimated, providing excellent return possibilities.

A fair evaluation of the price-to-equity valuation gives an undervalued outcome at around 14 times trailing earnings compared to comparable companies under similar circumstances.

Furthermore, Howard Hughes Holdings (HHH) is seen in Ackman's portfolio due to the significant increase in ownership after a deal was struck. This gave Ackman executive chairman status for its board and economic influence of about $900 million into Pershing Square and more than 40% control over voting rights.

As stated by management, Howard Hughes' business has growth potential and is undervalued at a market cap under its estimated net value calculated as over $5 billion but listed as such at around $4 billion, a low assessment. Ackman's investment creates an opportunity for investors to gain exposure to the diversified holding company structure that follows Warren Buffett's Berkshire Hathaway model. The current valuation based on estimated earnings per share gives good value and is relatively low compared with its own net asset value expected over the next few years.

The introduction of Pershing Square Holdings' incentive fee, as an additional revenue stream to grow the business value above inflation, presents a further potential upside by generating a direct return for investors. Involvement through investment here will allow average investors participation directly into private deals made by Ackman.

However, some drawbacks come with this new structure due to quarterly payouts of $3.75 million and a 0.375% incentive fee on value increases above inflation rates set by regulatory bodies – the advantages far outweigh potential negatives such as having control, access through direct engagement, and trading slightly under net assets value compared to market capitalization.

Investors could potentially buy shares of this company but should consider their goals and suitability before making a final investment decision.

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The key is understanding how selectivity in investing combined with growth-oriented investments can create enormous value, which serves as an essential lesson from Bill Ackman’s investment approach. This underlines why he stands out among financial experts with such successful results achieved by leveraging a few strong convictions instead of spreading thin the distribution.

Investors can mirror the stock composition in smaller and more manageable portions to gain the rewards that large diversified portfolios typically seek but cannot attain due to limited access, knowledge, or constraints imposed upon individual choices.

This provides a clearer understanding for any individual seeking exposure to specific sectors and growth investment strategies in which significant value potential has been proven through real-world performances demonstrated by its application.