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‘White Knight’

What’s surprising here is not that Ackman disagrees with the criticism; it’s how much he struggles with it. He sees himself as one of the good guys. “We are the white knight always on behalf of the owners of the business,” Ackman says. Defenders of Allergan, he says, won’t acknowledge that the company’s research budget was bloated; he points out that soon after he and Valeant went public with their plans, Allergan itself announced cuts in early-stage research.

Billionaire sounds like it’s someone who’s all about the money. The only thing money has meant to me is independence

At one point, in response to a question using the term billionaire, he visibly cringes. “It’s a weird word; I don’t like what it conveys,” says Ackman, who, according to the Bloomberg Billionaires Index, is worth U$1.6 billion. “Billionaire sounds like it’s someone who’s all about the money. The only thing money has meant to me is independence.”

Raised in Chappaqua, a suburb of New York, Ackman grew up with plenty of money — his father was a successful real estate broker — and an ambition to succeed. He bet his father US$2,000, everything he’d saved up, that he could get a perfect score on his SAT. He didn’t. He did, however, get two Harvard degrees (undergraduate and business).

Vindicated

In 1992, at age 26 and right out of business school, he started his first fund, Gotham Partners LP, with Harvard classmate David Berkowitz. The partners had early successes, but a series of misfires caused them to wind down the firm in 2003.

Ackman launched one of his best-known attacks while at Gotham. In 2002, he accused MBIA Inc., a triple-A-rated bond insurer, of being insolvent and shorted the stock. For five years, virtually no one believed him. Finally, in 2007, the financial crisis exposed MBIA’s troubles. The company’s stock collapsed, and Ackman, vindicated, made millions. By then, he was on to Pershing Square, which he had founded in 2003 with US$50 million in seed capital from Leucadia National Corp. Since then, Pershing Square has generated annualized returns of 21%.