Author Topic: PSH.L - Pershing Square Holdings  (Read 158182 times)

giofranchi

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PSH.L - Pershing Square Holdings
« on: February 10, 2015, 12:29:26 AM »
Today I have used my cash reserve to invest in Pershing Square Holdings.

I think it has many characteristics that I like in this environment:

1) First of all I think Ackman has learnt an hard lesson about investing in low quality businesses... And from now on he will concentrate on businesses that generate steady free cash flow, with low or no debt. Given the overall environment, that's where I want to be invested too.

2) His activism is much like investing with a catalyst... Another thing I like and look for these days! Not only his targets generate healthy levels of fcf, but (if Ackman is successful) the market will also see new strategies that get implemented to further increase those levels of fcf, and will revalue those companies accordingly.

3) I like very much his way of concentrating capital in just 3-4 ideas each year: it gives him the time needed to pursue and implement the right changes, and gives me the possibility to follow and try to understand each major decision of his. If I find the thesis of his next very large investment too risky or too difficult to understand, hopefully I will be able to get out without losing much capital, and to watch from the sidelines.

4) With $18 billions of AUM (6.5 of which are now permanent capital) Ackman has the firepower to push for changes in any kind of medium and large cap companies. His universe of possible investments is huge, he is only 48, and therefore could go on compounding at high rates of return for many years to come.

5) The share price is trading around NAV, therefore I am not paying a premium due to Ackman's 2014 stellar performance.

Gio
« Last Edit: September 03, 2020, 10:00:08 AM by Parsad »
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moody202

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Re: NL:PSH - Pershing Square Holdings
« Reply #1 on: February 10, 2015, 02:56:16 AM »
How would I buy this in US?
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abyli

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Re: NL:PSH - Pershing Square Holdings
« Reply #2 on: February 10, 2015, 03:01:44 AM »
Use IB, buy in IRA account. :)

moody202

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Re: NL:PSH - Pershing Square Holdings
« Reply #3 on: February 10, 2015, 03:03:26 AM »
Use IB, buy in IRA account. :)

why IRA?
Many shall be revived that now are fallen, and many fall that are now in honor.

abyli

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Re: NL:PSH - Pershing Square Holdings
« Reply #4 on: February 10, 2015, 03:11:42 AM »
It is a foreign closed hedge fund. PSH is listed in Holland because it is illegal for hedge fund to go public in US. Now US has very complicated tax rules about buying foreign funds. Google keyword PFIC.

handycap5

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Re: NL:PSH - Pershing Square Holdings
« Reply #5 on: February 10, 2015, 04:54:24 AM »
could you explain a couple of things that confused me on PSH:
1) what are the fees and expenses the fund will pay?
2) how do the taxes work?

thanks, handy

gfp

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Re: NL:PSH - Pershing Square Holdings
« Reply #6 on: February 10, 2015, 07:04:53 AM »
The fees are lower than the other Pershing Square funds.  Like someone else mentioned, if you are US investor it is best to understand the PFIC rules and hold it in an IRA if your tax adviser says that works for you.

Everything you would want to know is in the prospectus - tax info on page 199, Fees on page 12:

http://pershingsquareholdings.com/media/2014/09/Prospectus-Dated-2-October-2014.pdf

The above homepage also has links to the weekly NAV reports.  It trades at a small discount to last reported NAV.

could you explain a couple of things that confused me on PSH:
1) what are the fees and expenses the fund will pay?
2) how do the taxes work?

thanks, handy
« Last Edit: February 10, 2015, 07:09:31 AM by globalfinancepartners »

giofranchi

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Re: NL:PSH - Pershing Square Holdings
« Reply #7 on: February 10, 2015, 07:13:45 AM »
Handy,
Compensation is the one Ackman asks to any other client of his: I guess it should be the classic 2 and 20. His results net of fees and expenses imo justify such a generous compensation.

As far as taxes are concerned, I have held Third Point Offshore for two years and was very pleased with its fiscal regimen. PSH is based in Guennersey, just like TPOU, therefore I don't expect any difference.

Cheers,

Gio
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merkhet

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Re: NL:PSH - Pershing Square Holdings
« Reply #8 on: February 10, 2015, 07:16:11 AM »
Today I have used my cash reserve to invest in Pershing Square Holdings.

I think it has many characteristics that I like in this environment:

1) First of all I think Ackman has learnt an hard lesson about investing in low quality businesses... And from now on he will concentrate on businesses that generate steady free cash flow, with low or no debt. Given the overall environment, that's where I want to be invested too.

2) His activism is much like investing with a catalyst... Another thing I like and look for these days! Not only his targets generate healthy levels of fcf, but (if Ackman is successful) the market will also see new strategies that get implemented to further increase those levels of fcf, and will revalue those companies accordingly.

3) I like very much his way of concentrating capital in just 3-4 ideas each year: it gives him the time needed to pursue and implement the right changes, and gives me the possibility to follow and try to understand each major decision of his. If I find the thesis of his next very large investment too risky or too difficult to understand, hopefully I will be able to get out without losing much capital, and to watch from the sidelines.

4) With $18 billions of AUM (6.5 of which are now permanent capital) Ackman has the firepower to push for changes in any kind of medium and large cap companies. His universe of possible investments is huge, he is only 48, and therefore could go on compounding at high rates of return for many years to come.

5) The share price is trading around NAV, therefore I am not paying a premium due to Ackman's 2014 stellar performance.

Gio

Unclear whether Ackman was merely talking his book, but in a Bloomberg Europe video, he mentioned that vehicles like this usually trade for 2x+ book value. If that's true, and he can continue his 20% CAGR, then this will be an incredible steal.

giofranchi

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Re: NL:PSH - Pershing Square Holdings
« Reply #9 on: February 10, 2015, 07:17:25 AM »
The fees are lower than the other Pershing Square funds

Ok! Even better! :)

Gio
Portfolio: AAPL, AMZN, BABA, BOSS, BRK.B, FB, FFH, FIH.U, FINX, FWONA, GOOG, IBB, JPM, LBRDA, MKL, NKE, QQQ, SFTBF, SMH, TCEHY, V, XBI, XT