Bill Ackman’s $64 billion Universal Music play is part of his strategy to become the next Warren Buffett
Billionaire investor Bill Ackman’s hedge fund, Pershing Square Capital, is planning to buy Universal Music Group (UMG), the world’s largest music company, which represents artists including Taylor Swift, Bad Bunny, Bob Dylan, and the Beatles.
The $64 billion pitch announced Tuesday is Ackman’s latest move to turn Pershing into a “modern-day” Berkshire Hathaway and make him the next Warren Buffett. Pershing currently controls more than 10% of UMG shares, Bloomberg reported. The deal would merge UMG and Ackman’s Pershing Square SPARC Holdings as a joint entity to be listed on the New York Stock Exchange by the end of the year.
“The company’s management have done an excellent job nurturing and continuing to build a world-class artist roster and generating strong business performance,” Ackman said in a statement. “However, UMG’s stock price has languished due to a combination of issues that are unrelated to the performance of its music business, and importantly, all of them can be addressed with this transaction.”
The move comes weeks after Pershing filed to be listed on the New York Stock Exchange, marking Ackman’s latest attempt to go public in the U.S. The hedge fund has a market cap of $11.27 billion, $28 billion in assets under management, and Ackman is worth $8.13 billion.
Ackman, a self-described “Buffett devotee,” is following in his idol’s footsteps by attempting to acquire UMG. The IPO and joint listing with UMG would help Pershing gain access to “permanent capital,” a key part of Buffett’s investing playbook. Investors can pull their money out of a hedge fund quarterly or annually, requiring fund managers to keep cash on hand and putting them at risk of having to sell their holdings. After the IPO, Pershing would have access to capital in its closed-end fund that can’t be directly revoked; investors have to sell their shares on the open market instead.
Pershing declined to comment further on the proposal. Universal Music Group did not immediately respond to Fortune’s request for comment.
‘Be greedy when others are fearful’
Buffett, who has freely shared his investing advice for decades, is best known for one recommendation: “Be greedy when others are fearful and fearful when others are greedy.”
With this deal, it appears Ackman could be following that advice. Before the announcement, UMG’s stock, which is traded on the Euronext Amsterdam exchange, was down about 22% year to date. Today the stock is trading at 19.06 euros ($22.06), up about 2 euros ($2.32).
Pershing laid out what it sees as UMG’s weaknesses in the pitch’s announcement, explaining that the postponement of listing the company on a U.S. exchange, underutilization of the company’s balance sheet, and poor investor relations and communications are reasons for the company’s “underperformance.”
Buffett’s 1988 purchase of Coca-Cola stock stands as an instructive lesson for what Ackman is attempting with Universal Music Group. Buffett moved aggressively into Coca-Cola in the aftermath of the 1987 Black Monday crash, building a $1.3 billion stake in a brand that many investors had soured on. Just as Buffett saw Coca-Cola’s unmatched brand moat and pricing power as advantages that the market was temporarily mispricing, Ackman is betting that UMG’s enduring position in the music industry represents an irreplaceable investment that will reward patient capital.
This is not the first time Ackman has followed Buffett’s advice to take advantage of cheaper stocks, and Ackman has called on others to do the same. Last month, in a post on X, Ackman told investors to get over the war in Iran and buy Fannie Mae and Freddie Mac stocks, the two government-sponsored enterprises designed to prop up the mortgage market.
“Some of the highest quality businesses in the world are trading at extremely cheap prices,” Ackman wrote in the post. “Ignore the MSM [mainstream media]. One of the most one-sided wars in history that will end well for the U.S. and the world. And we have the potential for a large peace dividend.”
When markets opened the next day, Fannie Mae’s stock market climbed as much as 41%, and Freddie Mac surged as much as 34%, the largest single-day moves for each stock since May 2025. Fortune previously reported that Ackman’s tweet was the only obvious driver of the surge.
Learning from the past
Ackman’s play for UMG requires the faith of the company’s investors, something he has fallen short of in the past. He was unable to convince Pershing’s own investors to back the company’s $25 billion IPO goal in 2024 after a series of errors. Ackman downplayed the IPO risks to investors and argued that the company could achieve a “sustained premium” to its net asset value, defying the fund’s regulatory prospectus.
The move was so disastrous that Pershing had to “disclaim” Ackman’s comments and in the following week, Ackman cut the fundraising target from $25 billion to $4 billion to $2 billion, before putting the IPO off completely.
With the hedge fund’s latest attempt, Ackman has tempered his expectations and is aiming to raise between $5 billion and $10 billion. He has changed his approach by trying to list both the closed-end fund and Pershing’s parent company. To encourage investors, every 100 shares of the closed fund they buy will automatically grant them 20 free shares of Pershing Square Capital Management.
This approach is a departure from Ackman’s past head-over-heel dealings. In 2016, Ackman stood by former investor darling Valeant Pharmaceuticals, even as criticism mounted over the company’s aggressive drug price hikes and misleading SEC disclosures. Ackman eventually reversed course and sold the stocks, but not before losing Pershing $3.2 billion.
Ackman is also known for his unrelenting attitude toward his rivals. In 2012, he began a short-selling campaign against Herbalife, which sells weight-loss shakes and vitamins. Ackman accused the company of operating illegally and of being a “pyramid scheme,” and tried to drive the company’s stock price down for five years. In the end, Ackman cut his losses, and Pershing dumped all the stock.
In 2024, six years after the dispute, Ackman relished Herbalife’s stock plunging to a 14-year low.
“It is a very good day for my psychological short on Herbalife,” Ackman wrote in a post on X six years after the dispute. “And it is an even better day for the world to see one of the biggest pyramid schemes fail.”
This story was originally featured on Fortune.com