Who: Hedge fund manager, Pershing Square Capital Management

House: Lowell

Current Residence: New York, NY

Spotlight: “Young people are bright people. They are not indentured to received wisdom.” That was the rationale behind the monetary support of Martin Peretz, editor of the New Republic, for Gotham Partners, a hedge fund started by two freshly minted HBS grads in 1996. Inexperience didn’t keep Bill Ackman, 26, or David Berkowitz, 31, from jumping on the hedge fund wagon, and neither did it keep investors from putting up $30 million in cash to start one. It did, however, help Gotham Partners, which had grown to $300 million by 2003, implode in a spectacular display of business wrangling and SEC investigations. That, of course, was only the beginning. What’s worse than losing $300 million and having Eliot Spitzer breathing down your neck? Being in Pensions & Investments Magazine’s Hedge Fund Hall of Shame. After Berkowitz decided to return to the less humiliating world of private money management, Ackman picked up the pieces and with his newfound abundance of experience, started another hedge fund in 2004. Since then his fund has grown to nearly $1 billion, according to Barron’s.

Friends: Marty Peretz was Ackman’s advisor in college and one of his first investors. Even after the Gotham debacle, Peretz described Ackman as having an air of “palpable genius.” This relationship of mutual admiration is also part of the Conspiracy to Keep You Poor and Stupid.

Enemies: MBIA, the insurance giant. According to a story in The Edge Singapore, MBIA chairman Jay Brown summoned Ackman and other Gotham associates to a meeting after Gotham published a series of reports criticizing MBIA’s bookkeeping. Brown supposedly accused Ackman of manipulating the market and emphasized that MBIA had “friends in high places”. The meeting ended with Ackman offering a handshake and Brown recoiling. Soon after, the SEC began to investigate Gotham. Ackman bore out the investigations, which found nothing suspect, and eventually used the relationships he developed with the SEC to instigate an investigation into MBIA’s accounting practices. He later enjoyed the sweet, sweet taste of revenge when MBIA was forced to restate six years of earnings, reducing profits by $60 million.

Quotable: “The truth wins out eventually. If I’ve got my idea and basic facts right, I’ll be fine. If nothing else, I’m a persistent cuss.” Never has pursuit of the truth been this (financially) rewarding.

OpenSecrets: Ackman has donated heavily to the Democrats, cumulating in a $10,000 check to the Democratic Senatorial Campaign Committee last year.

Zillowed: When Ackman isn’t living in a $26 million co-op on Central Park West in New York, he spends time in his home on 73rd street, a neighborhood with $4-5 million houses.

*The Rookies' Big Score [Washington Post]
*MBIA - the Mystery of the $890 Billion Insurer [Aquamarine Fund Diary]
*Eliot Spitzer's Hedge Fund Witch Hunt [Slate.com]
*The Hedge Fund Hall of Shame [Pensions and Investments]
*Pershing's Founder Plays to Win [Financial Post (Canada)]
*TheStreet.com - Another Suspicious Connection [The Conspiracy to Keep You Poor and Stupid]