Who's going to one day fill Warren Buffett's shoes? If we're talking about Berkshire Hathaway (BRK.A -1.00%) (BRK.B -0.76%), the answer is easy. Buffett again confirmed in his latest annual letter to Berkshire shareholders that Greg Abel, who currently serves as CEO of Berkshire Hathaway Energy, is his successor.
But it's a tougher question about who might take Buffett's place in the investing world. Could Bill Ackman become the next Warren Buffett?
Some similarities
Ackman and Buffett share several common denominators. Probably the most obvious one is that they're both billionaire investors. Although Ackman's net worth of $9.4 billion is only a fraction of Buffett's net worth of $155 billion, he's also much younger at 58 versus Buffett's 94.
Buffett's mentor was Benjamin Graham, who is often called the father of value investing. To be sure, Buffett doesn't adhere to as strict of a standard of value investing as he did in the past. However, he still puts valuation near the top of his criteria for buying a stock.
Ackman was heavily influenced by Graham as well. Graham's The Intelligent Investor was the first investing book Ackman read. A quick look at Ackman's portfolio reveals that he focuses primarily on stocks with attractive valuations.
There are distinct differences between the two men, of course. Ackman has been an activist investor, something Buffett never found appealing. Since 1965, Buffett has used Berkshire Hathaway as the channel for his investing. Ackman's investment vehicle has been his Pershing Square Capital Management hedge fund.
Ackman's "modern-day Berkshire Hathaway"
But that distinction between Ackman and Buffett could go by the wayside. Ackman recently posted on X, formerly known as Twitter, that he wants to make Howard Hughes Holdings (HHH -4.01%) the "next Berkshire Hathaway."
NYSE: HHH
Key Data Points
Howard Hughes Holdings currently focuses on real estate. The company owns office, retail, and multi-family housing properties in five states. It also has around 35,000 acres of land that it can use for development.
Ackman plans to turn Howard Hughes Holdings into a diversified holding company similar to Berkshire Hathaway. His strategy is reminiscent of the one Buffett took years ago. Berkshire was a struggling textile company before Buffett converted it into a holding company for his investments.
Pershing Square already owns nearly 18.9 million shares of Howard Hughes Holdings. Ackman wants his hedge fund to acquire another 10 million shares at $90 per share. This would boost Pershing Square's stake in the company to 48%. Ackman would then become Howard Hughes Holdings' chairman and CEO. The new holding company would invest in both private and public companies that align with Ackman's selection criteria.
Should you buy Howard Hughes Holdings stock?
If Ackman indeed becomes the next Buffett, you'll want to buy Howard Hughes Holdings stock hand over fist. After all, Buffett's approach with Berkshire Hathaway resulted in an average annual gain of 19.9% over six decades.
However, I wouldn't rush to invest in Howard Hughes Holdings just yet. For one thing, the real estate company's board of directors hasn't agreed to Ackman's proposal. Howard Hughes Holdings issued a press release stating that its board formed a Special Committee to evaluate the proposal. So far, there's no word on what recommendation the committee will make. The press release did say, though, "There can be no assurance that the Company will pursue this proposed transaction or any other strategic outcome."
Even if the deal goes through, though, I'm not sold on Howard Hughes Holdings as a great pick for investors. It makes sense to wait and see how the holding company's portfolio will be built.
Just because Ackman wants to copy Buffett's strategy with Berkshire Hathaway doesn't mean he will be nearly as successful. I don't think he will. No one will fill Buffett's shoes in terms of his impact on investing, in my opinion. There will never be "the next Warren Buffett" for a simple reason: He is, and always will be, one of a kind.
