Pershing Square Share Discussion Threads

[liquidtyler] 29/6/2021 16:55

Hi All, just in response to comments.
I'm aware of fund fee structures (I'm involved in fund accounting in the city). So aware of 2-20 and other standard structures. However in his most recent interview with interactive investor; he responded very sharply to the notion that PSH was a hedge fund. He said we are an entity with fixed capital similar to Berkshire Hathaway. So in response to this it begs the question why is the fee structure still in place. Instead it would be more standard to have him on Salary+Bonus the same way a corporate CEO is. The Salary+Bonus would be agreed by the board.
Agreed on the point about the SPAC and how it makes it easier to enter the position. However Bill will be taking fees for himself as a result of the transaction (obviously when he just buys in market place that won't happen). My view is the SPAC is a means for him to take more fees for himself. I would also like to remind people that PSH has underperformed the SP500 for the first 6 months of the year too. In my option we should be clawing back the performance fee from last year to make up for this. Also thanks to the guys who replied I think it is good to share opinions etc on here and get a feel for different view points. Cheers all!

[riskvsreward] 29/6/2021 13:51

Not worried about high fee if it is a result of high performance. Ackman made nearly $3 billion just in one hedge trade. I would be more than happy to pay anyone $600 m if he has made me $3 billion.

I am more disgusted about lots of bad funds that make big losses but still charge fees anywhere between 1 to 5%, such as crs, cip, sigc, tfg etc etc.

[kinbasket] 29/6/2021 13:44

It's a standard hedge fund fee. 2 & 20 has been industry norm for decades so it's lower than a lot of funds. The 20 is based on a high water mark valuation so funds like this can run without performance bonuses for years if they have a draw down.

The NAV is calculated net of accrued performance fees so it's not like there is a hidden surprise coming. I don't understand market reticence in this scenario.

Liquid. The SPAC deal is doing exactly what you ask. He's using the SPAC to buy a decent share of UMG for PSH. Without the SPAC structure he would have to buy it in the market when it lists in September, probably at a higher price.

[thruxie] 29/6/2021 11:55

@Liquid I agree it certainly leaves a bad taste. I suppose the reason for the huge bonus is because the fund had such a great year and we're talking multi billion assets, the performance bonus would be better if it was maybe fixed or capped rather than as a percentage. I think the high fees are probably the no1 reason the discount to NAV is so stubbornly high.

On the other hand this is my best performing trust over the past two years and it's currently @32% of my portfolio so I've done OK by Bill and I'm loath to sell a winner especially as I think UMG is actually a good long term deal.

Here's what they say about the bonus:-

"Fees Under Pershing Square Capital Management
Pershing Square Capital bases its management fees on a percentage of assets under management. Generally, the percentage is 1.5% annually for the core funds. On top of that, the firm collects a performance-based fee, which generally starts at 20% of the increase in net asset value (after the management fee and other losses have been deducted). The firm may negotiate any fees at its discretion."

[liquidtyler] 28/6/2021 18:13

Really disappointed with PSH recently. The $600m incentive fee taken due to last year's performance was very excessive. Also all this time being wasted on SPAC is getting on my nerves too, I wish he would use the funds to invest in another high quality Buffett style business. I sometimes think that all he has on his mind is his inflated ego and constantly being in the news, not to mention lining his own pocket with huge fees.

If these fees keep coming out, over the years investment performance is going to take a hit. Its making me wonder whether PSH is a worthwhile investment. However when compared with the rest of the trash in the FTSE 100, PSH really does stand out; so from that perspective it is hard to sell. A large % of my portfolio is in PSH think I will hold for now, but still some question marks on this.

[kinbasket] 24/6/2021 11:10

SCOTUS ruled on Freddie and Fannie yesterday. Not the outcome punters wanted as can be seen from the share price action in both. It isn't over but it's definitely in the long grass for the foreseeable. It'll be interesting to see if we get any comment from Bill Ackman.

The ruling came in the middle of his epic 3hr presser on the PSTH deal. I listened in and learned a few bits and bobs.

Of interest is the tax treatment of the the UMG spin. Viv shareholders will be taxed on the spin but PSTH holders get theirs tax feee. Not sure how this effects BOL and ODET but I've decided PSTH is the best way to play and added there.

[kinbasket] 17/6/2021 20:24

SCOTUS released three opinions today so Collins v. Yellen is the only 2020 case still outstanding. Expect a ruling on Monday. If you're on twitter you can follow this with #fanniegate

[grahamg8] 17/6/2021 07:50

Odet own 64% of Bollore, but then Bollore own 92% of Odet. Sounds a bit incestuous. Share performance over the past year is near identical, well it would be. But has outstripped VIV in recent months. So I will stick with VIV (plus PSH of course) where the sluggish recent performance suggests a bit of catching up may take place. One can but hope.

Inflation in US now 5% so Bill Ackman's interest hedge looks like a wise and potentially profitable move.

[grahamg8] 16/6/2021 18:09

kinbasket, I did indeed look at Bollore. They will end up as minority holders of UMG - 16.2% directly on the distribution plus 2.7% indirectly via VIV. Nothing wrong with that but I didn't fancy the rest of the business, stevedoring in Africa doesn't do it for me.

[arja] 16/6/2021 15:49

grahamg8 ,
thanks for advice on changing to tt and I will try that .
PSH is a bit frustrating to hold but it is trying to steady in 2500 to 2550 area and
has chart support there . Hope it will start to creep higher soon and hold an intra day upward move and not always pullback ! ( wry smile )

[kinbasket] 16/6/2021 11:52

In other news. It looks like the SCOTUS ruling on Freddie/Fannie is coming any day now. We have a pretty fat position trading on a big discount if the recap happens and prefs end up with equity. Very lopsided trade with a big upside on a positive SCOTUS decision.

[rickyl1] 16/6/2021 10:55

Yes they have, it's in place until next spring I believe.

[brwo349] 16/6/2021 08:31

Does anyone know if psh still has a big short position on the markets. I know they made a lot when the markets tanked early 2020. Have they reopened this short now the markets have recovered so strongly?

[kinbasket] 15/6/2021 16:57

If you are happy looking at Viv, then the best play is BOL.FP or possibly ODET.FP which trades at a small discount to its holding in BOL (100% invested in BOL). BOL looks cheap to me on a sum of the parts if UMG moves even a small amount. These are all vehicles of Vincent Bollore who is the puppet master to the UMG deal.

[grahamg8] 14/6/2021 19:55

JP Morgan think VIV is worth 42 Euros per share on disposal of UMG. Looks a bit optimistic but I have bought an initial stake. So now will get UMC shares direct, plus VIV rump, plus UMG via PSH with a small portfolio of USA shares specially selected by Ackman, and of course get a second bite at an IPO via Tontine.

[grahamg8] 11/6/2021 17:40

Vivendi might be a decent punt too. They get 3.5bn Euros to reduce debt or buy into their expanding entertainment and comms business: Canal + Group TV, Havas advertising, Editis publishing, Video games Gameloft and Live performances Vivendi Village. The shares seem to be 11% undervalued by my calculation.

[thruxie] 10/6/2021 17:42

I think the PSTH UMG Remainco PSTH2 deal is complex for some in the market to fathom, they don't seem to like uncertainty. However, I'm also convinced in years to come many will be kicking themselves they didn't buy.

I've bought more PSH today, much as I like PSTH I like the discount to NAV through PSH more. :)

[kinbasket] 10/6/2021 16:40

I bought some Tontine today. I decided I wanted some direct interest outside of PSH. I think the downside is limited as UMG at 14.75 seems cheap. Goldmans has already put a higher value on it and I don't think I'll get a better chance to own a blue chip like UMG at this price. Plus I get the future optionality on all Bills deals at the same price he pays. Feels a bit like a thing I might regret not buying in a few years so I bought a few to tuck away.

[grahamg8] 10/6/2021 07:47

arja don't forget to change the xx to tt. It is possible to read in 'shadow' format without paying the subscription. An even more detailed analysis is on this link

[arja] 09/6/2021 16:20

ok, but if chart shows a short term downtrend that is obviously bearish. Hoping it will turn around soon .

[rickyl1] 07/6/2021 22:12

Quite bullish actually. Sentiment starting to change and hopefully starts to translate in PSH terms soon, depending on market outlook overall obviously.

[arja] 07/6/2021 15:03

can not open link but presumably bearish for share price as down again today ! looking quite bad I guess and a big disappointment

[wish i wasnt in rbs] 07/6/2021 11:36

hxxps://www.barrons.com/articles/bill-ackman-spac-deal-universal-51622833744

[arja] 04/6/2021 19:08

Citywire cites the very high fees charged by the Trust managers is one reason for the huge discount to NAV . Might well be I guess and hoping the share price bounces a bit next week. Nioe weekend all