Pershing Square Capital Management, the hedge fund founded by Bill Ackman, has built a significant $2.6bn stake in Toronto-based Brookfield, making it the second-largest position in the firm’s investment, according to a report by the Globe & Mail.
The billion dollar investment reflects confidence in Brookfield’s role as a key player in managing critical global infrastructure.
Pershing Square began investing in Brookfield, the parent company of Brookfield Asset Management, in April 2024 and by 30 September held 32.7 million shares, representing 2.2% of Brookfield’s outstanding stock. This stake now accounts for 10.6% of Pershing Square’s holdings, surpassing investments in well-known companies such as Hilton Worldwide, Chipotle Mexican Grill, and Alphabet.
Brookfield owns and operates assets central to the global economy, including data centres for AI, renewable energy sources, and logistics infrastructure. Ackman described Brookfield’s portfolio as “the backbone of the global economy.” He predicts the company will benefit from its undervaluation compared to peers and from increasing fee-related earnings at Brookfield Asset Management.
Ackman’s connection to Brookfield dates back over a decade, stemming from collaboration on the restructuring of bankrupt mall owner General Growth Properties — a landmark investment for Pershing Square. Despite occasional disagreements, Ackman expressed respect for Brookfield CEO Bruce Flatt and the management team.
Brookfield’s stock has risen over 40% since Pershing Square began its investment, closing at CAD81.45 on Friday on the Toronto Stock Exchange. Pershing Square partner Charles Korn believes the stock still has substantial growth potential, with shares expected to more than double in the coming years. Ackman noted that Brookfield trades at a valuation multiple of 15 times earnings, compared to competitors like KKR (27 times) and Apollo Global (22 times), indicating significant upside potential.
Brookfield remains underrepresented among US institutional investors, a challenge its management is working to address by recently relocating its head office to New York and focusing on improving liquidity and inclusion in major indexes like the S&P 500.
