Take one philanthropist plus one hedge fund

By Emma Boyd (Financial Times) – Business schools seem to be doing well out of hedge funds  of late. Just three months after Brevan Howard gave £20.1m to Imperial  College Business School, the Pershing Square Foundation has announced a gift  of £4.5m to Saïd  Business School at Oxford university.

The Pershing Square Foundation was set up by Bill and  Karen Ackman in 2006. Mr Ackman is the prominent activist hedge fund manager and  founder of Pershing Square Capital Management. He is making a name for himself  not only as a philanthropist but also in influencing  big companies and with his public battle with activist investor Carl Icahn.

The gift will fund up to five scholars a year on Saïd’s “1+1” programme,  which allows students to study an MBA and an Oxford university specialist  master’s degree in two years. The gift will be matched by a further £3m from the  Oxford Graduate Scholarship Matched Fund.

Mr Ackman has a strong history of philanthropy. He is a  signatory to The  Giving Pledge under which many of the world’s wealthiest individuals – including Jeff Skoll, whose endowment founded the Skoll Centre for Social  Entrepreneurship at Saïd – publicly commit to dedicating the majority of their  wealth to philanthropy. The Pershing Square Foundation invests in organisations  that “use innovative and scalable solutions to attack the compounding roots of  poverty: poor health, injustice, substandard education, economic limitations and  isolated communities”.

Mr Ackman discussed the endowment with the Financial Times.

Why are you funding these scholarships when the scholars have clearly  not had a substandard education?

The way that this scholarship helps the mission is not by helping a student  get into Saïd. We’re looking to train a new batch of social entrepreneurs.

How strongly are you involved in the choices that your foundation  makes? Very.

Why did you choose Saïd’s 1+1 programme?

The purpose of the scholarships is to train the next  Andrew Youn [founder of the One  Acre Fund, which provides small loans to farmers in Africa in the form of  seed and fertiliser, gives training and helps sell the harvest. It takes a share  of the profit as repayment on the loan.]

One of the problems with a lot of social entrepreneurs in non-profits is they  don’t have a business background. The idea of the scholarships is we don’t want  someone to be forced to work for an investment bank when they graduate, the idea  is that we subsidise someone’s education so that they can afford to pursue a  career which can have a meaningful social impact. I like the 1+1 programme  because it delivers a graduate with more specific knowledge.

Why have you made this donation to Saïd rather than Harvard Business School,  where you studied? The reason is Peter Tufano, the dean of Saïd. He was my  finance professor at HBS and when I was in London a year ago we met and he  explained what he had been doing and I really liked the sound of the 1+1  programme.

Should business schools be doing more to prepare students for the  hedge fund world?

I didn’t go to business school to train to be a hedge fund manager. Business  schools should be training future business leaders.

What long-term benefits do you expect to see from the endowment?

The programme is unique because it will select candidates who are able to  demonstrate, through experience, an aptitude and commitment to addressing global  challenges. The scholars will have to pledge to serve the greater good following  graduation and to donate back the value of the scholarship should their means  allow.

You have received a lot of good press, but there has also been some  criticism of some of the investment stances you have taken and also your trading  techniques, specifically the short selling. In a way, your philanthropy does not  seem to fit with how you live your professional life. How would you respond to  that assertion?

I think we’ve accomplished more for society in our for-profit activities than  in our not-for-profit activities. My work with the Foundation is a continuum of  what I do in my professional life. When the Foundation sees a problem we always  ask if there is a business solution. I think most of the criticisms you have  heard relate to my position on Herbalife. If I manage to close down that company  I will consider it the greatest achievement of my life.

[Herbalife has become a battlefield between Mr Ackman and rival billionaire  activist investor Carl Icahn. Mr Icahn has bought up 16.5 per cent of the  nutrition group since Mr Ackman announced in December last year that he was  shorting Herbalife because he considered it no better than a pyramid scheme – a  charge the company strongly denies.]


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