Author Topic: Fairfax India new issue  (Read 95079 times)

netnet

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 909
Re: Fairfax India new issue
« Reply #10 on: January 30, 2015, 06:25:04 PM »
Did anyone buy in today? There doesn't seem to be a way to value this besides Prem Watsa + India = $$$.

I'm tempted to start a position soon for two reasons.

1) Prem Watsa + India = $$$  ;)

2) This has the faint air of a spinoff of the Fairfax brand. As such it might take time to be recognized properly by the market. The less than explosive debut today reinforces this feeling..

Speculative? I suppose it is since it has no holdings. But it's FFH, how speculative could it be?

Can anyone dissuade me?

This is like buying into an Indian company at book value, i.e. cash on hand. If you believe that Prem Watsa is a great investor, then you are buying in at a fair price, exactly book. It is no more speculative than a mutual fund. It is most certainly not a spinoff unless it trades down versus the cash on hand.  (I suspect it might trade somewhat over book.)
« Last Edit: January 30, 2015, 09:38:54 PM by netnet »


notorious546

  • Hero Member
  • *****
  • Posts: 533
    • Anonymoose Notes
Re: Fairfax India new issue
« Reply #11 on: January 30, 2015, 09:35:28 PM »
Did anyone buy in today? There doesn't seem to be a way to value this besides Prem Watsa + India = $$$.

I'm tempted to start a position soon for two reasons.

1) Prem Watsa + India = $$$  ;)

2) This has the faint air of a spinoff of the Fairfax brand. As such it might take time to be recognized properly by the market. The less than explosive debut today reinforces this feeling.

Speculative? I suppose it is since it has no holdings. But it's FFH, how speculative could it be?

Can anyone dissuade me?
What multiples does it trade at currently?

BlueSkull

  • Newbie
  • *
  • Posts: 2
Re: Fairfax India new issue
« Reply #12 on: February 03, 2015, 04:42:21 PM »
Multiples?  As far as I can tell, they've raised the equivalent of $10/share and it's pricing just below that post-ipo.  But I think it's all just cash now waiting for Watsa, et al. to deploy it.  It does appear to be available to US investors via Fidelity through their international desk, though they basically have to manually route the trade from what I heard.

I'm curious what you all think about the fee structure.  From the prospectus, it looks like a 1.5% on AUM invested, 0.5% on the remaining cash, and 20% of performance above the larger of a high-water mark, or hurdle rate --- which seems to be 5% annualized.  Does that seem like a reasonable fee to hire Prem and his team to manage your Indian investments?

notorious546

  • Hero Member
  • *****
  • Posts: 533
    • Anonymoose Notes
Re: Fairfax India new issue
« Reply #13 on: February 03, 2015, 08:44:15 PM »
Multiples?  As far as I can tell, they've raised the equivalent of $10/share and it's pricing just below that post-ipo.  But I think it's all just cash now waiting for Watsa, et al. to deploy it.  It does appear to be available to US investors via Fidelity through their international desk, though they basically have to manually route the trade from what I heard.

I'm curious what you all think about the fee structure.  From the prospectus, it looks like a 1.5% on AUM invested, 0.5% on the remaining cash, and 20% of performance above the larger of a high-water mark, or hurdle rate --- which seems to be 5% annualized.  Does that seem like a reasonable fee to hire Prem and his team to manage your Indian investments?

on second thought its not so bad you don't pay any fees for a while, until the deploy some capital. I like who they are partnered with in India.
« Last Edit: February 04, 2015, 08:28:28 AM by notorious546 »

satish00

  • Newbie
  • *
  • Posts: 3
Re: Fairfax India new issue
« Reply #14 on: February 03, 2015, 09:09:23 PM »
I read the fee structure as 0.5% for undeployed capital and 1.5% for deployed portion of capital. Also, its accrued and paid 3 years at a time and Fairfax could choose to get paid in stock vs cash.

"The Administration and Advisory Fee will be an amount equal to the sum of: (i) 1.5% of the Net Asset Value of the Company less the aggregate fair value of any Undeployed Capital; and (ii) 0.5% of the aggregate fair value of any Undeployed Capital. "

I did buy a few shares through Fidelity. Yes. I had to call it in since it's US$ traded on Toronto exchange which cannot be handled online by them - they did charge $50 fee for tine international transaction + $7.95 commission (matched online commission since they do not allow this transaction online).


petec

  • Hero Member
  • *****
  • Posts: 1291
Re: Fairfax India new issue
« Reply #15 on: February 04, 2015, 07:09:08 AM »
Is there a conflict of interest here between Fairfax India and TCIL?   Given that TCIL is meant to be buying things in India on Fairfax's behalf?

notorious546

  • Hero Member
  • *****
  • Posts: 533
    • Anonymoose Notes
Re: Fairfax India new issue
« Reply #16 on: February 04, 2015, 08:29:41 AM »
Is there a conflict of interest here between Fairfax India and TCIL?   Given that TCIL is meant to be buying things in India on Fairfax's behalf?

i guess so, but i feel like this is often the case with any investment manager runs multiple portfolio's or entities. ie)Pabrai with Pabrai Funds, Dakshana Foundation, and now Dhandho holdings.

wisdom

  • Hero Member
  • *****
  • Posts: 741
Re: Fairfax India new issue
« Reply #17 on: February 04, 2015, 11:00:19 AM »
I do not have any specific knowledge but recall reading that this fund would be more focused on infrstructure type of projects. I would imagine this would be better for insurance companies or pension funds to invest in.

TCIL is into buying businesses.

netnet

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 909
Re: Fairfax India new issue
« Reply #18 on: February 04, 2015, 01:37:32 PM »
I do not have any specific knowledge but recall reading that this fund would be more focused on infrstructure type of projects. I would imagine this would be better for insurance companies or pension funds to invest in.

TCIL is into buying businesses.

Fairfax India is not restricted to infrastructure.  From the prospectus:

The Company will invest in businesses that are expected to benefit from India’s current pro-business
political environment, its growing middle class and its demographic trends that are expected to underpin strong
growth for several years. Sectors of the Indian economy that the Company believes will benefit most from such
trends include infrastructure, the consumer services and retail sectors and the export sector. The Company,
however, will not be limited to investing solely in these sectors and intends to invest in other sectors as
opportunities arise.

notorious546

  • Hero Member
  • *****
  • Posts: 533
    • Anonymoose Notes
Re: Fairfax India new issue
« Reply #19 on: February 13, 2015, 10:15:02 AM »
does it make sense to pay anything above 10 dollars for this?