Author Topic: NL:PSH - Pershing Square Holdings  (Read 124880 times)

cherzeca

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Re: NL:PSH - Pershing Square Holdings
« Reply #350 on: July 03, 2019, 10:52:22 AM »
ackman and Berkowitz are similar.  they have outstanding long term records with a great deal of variance.  as for bill, even when he is wrong in outcome, he is often right in process (I would say he correctly analyzed HLF, but misinterpreted what the FTC would do), although not always (valeant was a complete miss). 


thepupil

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Re: NL:PSH - Pershing Square Holdings
« Reply #351 on: December 16, 2019, 05:52:39 AM »
I like PSH NA here at a record 30/31% discount for an IRA of an accredited investor [PFIC].

They are buying back a run rate or so of 4-5% of shares / year, every day in the market, the accretion from that more or less offsets management fees then you get a little moderate leverage from long term bonds  issued by PSH that costs 4.95%. PSH is amazingly back above its high water mark so you'll pay incentive fees. The portfolio quality has improved as the crap has left; major holdings like Berkshire, HHC, Agilent, Starbucks, etc are all "easy to own" at a 30% discount. Ackman is aligned. He owns $700mm of shares, which is meaningful in the context of the money he makes off of the management/incentive fees from external capital. He's acting like an owner rather than parasite by buying back shares.

The "correct" discount is 10-15% in my view. I would expect long term alpha to be -300 to +500 per year and would expect to see discount accretion on a 5 year basis of 300-500 bps as it normalizes. PSH NA is an anomaly in the CEF world in terms of its wide discount with liquid easily understandable balance sheer. So on a 5 year basis, I think one will match the market in a downside case and beat it meaningfully in a base case; there is a wide range of outcomes, but all in I think it's positively skewed. I simply don't see a repeat of the crappiness that was VRX/HLF etc. happening based on the current portfolio. Maybe Fannie Freddie goes to zero and it is actually trading at a tighter discount, but it won't completely impair the portfolio like being loaded to the gills with VRX did.

EricSchleien

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Re: NL:PSH - Pershing Square Holdings
« Reply #352 on: December 16, 2019, 10:47:59 AM »
Can it not be in an IRA of an accredited investor?

I like PSH NA here at a record 30/31% discount for an IRA of an accredited investor [PFIC].

They are buying back a run rate or so of 4-5% of shares / year, every day in the market, the accretion from that more or less offsets management fees then you get a little moderate leverage from long term bonds  issued by PSH that costs 4.95%. PSH is amazingly back above its high water mark so you'll pay incentive fees. The portfolio quality has improved as the crap has left; major holdings like Berkshire, HHC, Agilent, Starbucks, etc are all "easy to own" at a 30% discount. Ackman is aligned. He owns $700mm of shares, which is meaningful in the context of the money he makes off of the management/incentive fees from external capital. He's acting like an owner rather than parasite by buying back shares.

The "correct" discount is 10-15% in my view. I would expect long term alpha to be -300 to +500 per year and would expect to see discount accretion on a 5 year basis of 300-500 bps as it normalizes. PSH NA is an anomaly in the CEF world in terms of its wide discount with liquid easily understandable balance sheer. So on a 5 year basis, I think one will match the market in a downside case and beat it meaningfully in a base case; there is a wide range of outcomes, but all in I think it's positively skewed. I simply don't see a repeat of the crappiness that was VRX/HLF etc. happening based on the current portfolio. Maybe Fannie Freddie goes to zero and it is actually trading at a tighter discount, but it won't completely impair the portfolio like being loaded to the gills with VRX did.

thepupil

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Re: NL:PSH - Pershing Square Holdings
« Reply #353 on: December 16, 2019, 11:24:58 AM »
ownership by US persons is tricky, period. In fact, it's questionable whether an IRA of an accredited person can own it. It would be best to be owned in an IRA that's not a rollover or would not be considered ERISA money.

Owning in a taxable account is a no go unless you want to file PFIC form and have it taxed in an onerous fashion.

One can buy the less liquid ADR in a non rollover IRA of an accredited investor and I think that it's okay from what I've read.


The Placing Shares have not been and will not be registered under the applicable securities laws of the United States, Australia, Canada, Japan, New Zealand or South Africa. Subject to
certain exceptions, the Placing Shares may not be offered or sold within the United States, Australia, Canada, Japan, New Zealand or South Africa or into any other jurisdiction where to
do so would constitute a violation of applicable laws or regulations of such other jurisdiction or to any national, resident or citizen thereof. The Placing Shares may not be offered or sold to
or for the account or benefit of U.S. persons (‘‘U.S. Persons’’) as defined in Regulation S (‘‘Regulation S’’) under the U.S. Securities Act of 1933, as amended (the ‘‘Securities Act’’).
The Placing Shares are being offered and sold only to non-U.S. Persons in the Netherlands and selected other jurisdictions in offshore transactions in reliance on Regulation S, provided
such persons are also Qualified Eligible Persons (‘‘QEPs’’) under U.S. Commodity Futures Trading Commission (‘‘CFTC’’) Rule 4.7.
Neither the U.S. Securities and Exchange Commission (the ‘‘SEC’’) nor any U.S. state securities commission has approved or disapproved of the Placing Shares, nor have they passed upon
or endorsed the merit of the Placing or the accuracy or completeness of this Prospectus. Any representation to the contrary is a criminal offence in the United States. The Company has not
registered as an investment company under the U.S. Investment Company Act of 1940, as amended (the ‘‘Investment Company Act’’), and investors will not be entitled to the benefits of
that Act.
The Placing Shares may not be acquired by: (i) investors using assets of: (A) an ‘‘employee benefit plan’’ as defined in Section 3(3) of the U.S. Employee Retirement Income Security Act
of 1974, as amended from time to time (together with the applicable regulations thereunder, ‘‘ERISA’’), that is subject to Title I of ERISA; (B) a ‘‘plan’’ as defined in Section 4975 of the
U.S. Internal Revenue Code (the ‘‘IRC’’), including an individual retirement account or other arrangement that is subject to Section 4975 of the IRC; or (C) an entity which is deemed to
hold the assets of any of the foregoing types of plans, accounts or arrangements that is subject to Title I of ERISA or Section 4975 of the IRC (‘‘ERISA Plans’’); or (ii) a governmental,
church, non-U.S. or other employee benefit plan that is subject to any federal, state, local or non-U.S. law that is substantially similar to the provisions of Title I of ERISA or Section 4975
of the IRC.
Each Manager is acting exclusively

thowed

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Re: NL:PSH - Pershing Square Holdings
« Reply #354 on: December 16, 2019, 04:01:47 PM »
Cheers for this - it's good to hear an opposing view.  I felt like I was 'too late' on this given the performance YTD.  But the discount has been impressively stubborn - after the 1-2 Valeant / Herbalife hubris, I suppose it will take a while for people to fully regain confidence in him.

But it's a good point - it's a pretty solid portfolio of decent liquid stocks - and arguably in a bad case scenario acts as a S&P500 tracker at a hefty discount.

I still don't like the idea of him, as a textbook example of the smug 'Christopher Wool' owning class.  But this is the sort of thing that is fairly obvious in retrospect, and I often miss out on.

Next - is it too late to buy UK Smlr Cos Investment Trusts......






Liberty

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ukvalueinvestment

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Re: NL:PSH - Pershing Square Holdings
« Reply #356 on: February 05, 2020, 11:40:16 PM »
I think this is deserving of a large discount given Ackman's history and high fee structure, but the discount is a somewhat too high.  I would own this as an alternative to an S&P tracker.  But that's not to say I want to own too much of the S&P right now.
@ukvalueinv

thowed

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Re: NL:PSH - Pershing Square Holdings
« Reply #357 on: February 06, 2020, 05:00:07 AM »
Should point to UK people e.g. UKValueInvestor that this is not an ideal purchase as they no longer have UK Reporting Fund status, so if you have Capital Gains they'll be taxed at Income Tax rates. 

Don't know reason for doing this, no small funds have a problem with it, so it comes across as another case of idiot, shareholder-unfriendly behaviour from the Ackmann camp.

On a pure stock level though, agree that it's still probably attractive at such a big discount.

For further unfriendly behaviour, see here:
https://citywire.co.uk/investment-trust-insider/news/avi-attacks-ackman-s-pershing-square-over-outrageous-borrowing/a1250697