Billionaire hedge fund manager Bill Ackerman is known for his aggressive investment approach—and recently, he has also dabbled in politics.
His personal life is equally dramatic. In the mid-2010s, Ackerman experienced an expensive divorce, and his company, Pershing Square Capital Management, lost billions and nearly lost control of the company—all of which happened in just a few short years.
Ackman shared the story Thursday at the Forbes Idol Spoiler Summit in New York.
"I was experiencing a divorce at the time, which brought me huge financial pressure and the fund shrank by more than 30%." He told Forbes editor-in-chief Steve Forbes.
"Then, if you're willing to say that, the entire industry starts uniting against us," he said, shorting stocks held by Pershing Square, longing the fund's short stocks, the most famous of which is Herbalife.
Ackerman closed some of his positions by selling Pershing's shares, in the end resulted in the fund's losses of nearly $4 billion. But backed by JPMorgan’s $300 million loan, he consolidated control of the fund.
Ackerman recalled that it was this special mentality that helped him through those years. He applied the principle of compound interest to his personal life and said, "My method is to work hard to make a little progress every day."
He quipped, "If you make 0.1% progress every day, that doesn't sound like much--but it's calculated on an annual basis!"
So Ackerman reminds himself every day, and he told Forbes. "I'm going to keep improving. I won't look back at the roads that have been gone. If I look back, I'll be discouraged. I'll just focus on the next step, the next step, the next step," he said.
"You won't notice any obvious changes in the first few weeks," he added. "About 90 days, you'll think, 'Okay, I'm here...I'll just keep compounding.'"
Ackerman said the progress curve didn't seem much at first, but soon -- due to compound interest -- it started to take off.
Although Ackerman's career is particularly tragic, he believes his progressive approach can benefit anyone.
"Unfortunately, each of us will have moments like this...it could be a health issue, it could be a fired, your startup failed," he said. "And when you fall from high to low, it's even harder."
After several years of trough, Ackerman is now back to his peak. After a new round of valuation of Pershing Square, his net worth almost doubled to about $8 billion last year. Although his first wife’s divorce was reportedly costing nine figures, Ackerman has now happily remarried with designer Neri Oxman.
