Bill Ackman, founder and CEO of Pershing Square Capital Management, says Howard Hughes’ $2.1 billion acquisition of specialty insurer and reinsurer Vantage Group echoes Warren Buffett’s early moves at Berkshire Hathaway, as the company he backs looks to build a diversified holding company.
Founded in 2020, Vantage has quickly established itself as a global insurer and reinsurer, offering a portfolio of property and casualty products supported by modern infrastructure and advanced analytics.
Following the transaction’s close, Vantage expects an injection of additional capital and an enhanced investment strategy, including an allocation aligned with Pershing Square’s long-term investment approach.
In a recent conference call, Ackman, executive chairman of Howard Hughes, in which Pershing Square holds a roughly 46.9% stake, likened the transaction to Berkshire Hathaway’s early years under Warren Buffett.
He said Buffett prioritised underwriting profitability, took relatively low insurance risk, used far less leverage than typical insurers, and invested a substantial portion of the portfolio in common stocks—creating an insurance operation that generated returns on equity of more than 20% over roughly six decades.
Ackman continued, “Learning from Mr Buffett, we’ve taken a similar approach and began a search either for a management team to build a business around, or for an existing company we could acquire at a price that made sense and use as the core of this platform.
“We’re pleased to report that we’ve done the latter, which was our preferred option, as building from scratch takes time. The company we’re acquiring, Vantage, was itself built from the ground up as a 50-50 joint venture between two highly respected private equity firms, Hellman & Friedman and Carlyle.”
He added, “The acquisition of Vantage is a milestone event in the transformation of Howard Hughes into a diversified holding company. In Vantage, Howard Hughes obtains an exceptional diversified specialty insurance and reinsurance platform managed by an excellent and highly experienced team.
“The combination of Vantage’s insurance expertise and Pershing Square’s investment capabilities creates the opportunity to build a large, highly profitable insurance company and an important source of long-term value creation for Howard Hughes.”
Vantage will reportedly continue to operate under its existing name, brand, and culture, with staff retaining the same roles, teams, and go-to-market strategy.
Greg Hendrick, chief executive officer of Vantage, said, “I’m excited about starting Vantage’s next chapter through this acquisition. With Howard Hughes’ permanent capital and long-term vision, we expect to strengthen our balance sheet and expand opportunities in specialty insurance, reinsurance, and partnership capital.
“After closing, we anticipate enhanced resources to fuel profitable growth, drive innovation, and deliver even greater value to brokers and clients over time.”
About the Author
