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Bill Ackman is starting a fund for regular investors
Why would anyone own PSHZF (you have to pay $50 to buy at fidelity each time and it has a performance fee) if the above is true? Bill would be managing two closed end funds. Something doesn't add up
As far as I was able to determine PSHZF is a collection (fund? CEF?) of sorts that trades like a stock. There doesn't appear to be any trading fee(s) other than possibly when one sells shares. I'm willing to be corrected.
Alternatively, you could buy it directly on the London Exchange (PSH:GB). But not in a retirement account.
Fidelity charges £9 for the London Exchange transaction. At the current exchange rate of $1.26, that's around $11.35 - a lot cheaper than $50. Though I don't know what sort of stock price you'd get through each mechanism.
"Ackman is waiving the management fee for the first 12 months and after the first year will charge a flat 2% fee."
Not sounding too attractive so far....
I now feel bad for having launched a few jesting pot-shots at GMO when they launched their etf.
I'm not paying 2% unless Bill Ackman come over to the house to sweep up all the fur our border collie sheds. He (Ackman, not the dog) is free to repackage the proceeds as canine-backed derivatives.
Add "regular investor" to that list of phrases that includes "I'm just a country lawyer." That's the list that causes you to place two hands on your wallet.
"Ackman is waiving the management fee for the first 12 months and after the first year will charge a flat 2% fee."
Not sounding too attractive so far....
I now feel bad for having launched a few jesting pot-shots at GMO when they launched their etf.
I'm not paying 2% unless Bill Ackman come over to the house to sweep up all the fur our border collie sheds. He (Ackman, not the dog) is free to repackage the proceeds as canine-backed derivatives.
Add "regular investor" to that list of phrases that includes "I'm just a country lawyer." That's the list that causes you to place two hands on your wallet.
+1
Careful, he may use your canine derivative idea to launch the Derivatively Opportunistic Global Special High Interest Trends CEF next -- with a traditional 2/20 fee structure due to the high levels of dietary management involved with generating such.....returns. You can figure out what the ticker will be on that one.
I have relatives/friends in the advisory business. They a very different mindset about fees as that affects their lively hood. When there is discussion about low-cost mutual funds, they take a pass saying that isn't possible with them involved.
I think that is the revolution that Bogle and Schwab started.
Here we are seeing the worst of both worlds when people like Ackman want to tap into funds model (OEFs/ETFs/CEFs) but with hedge-fund like high fees. But 2/20 structure is forbidden by the SEC in the fund world.
I have relatives/friends in the advisory business. They a very different mindset about fees as that affects their lively hood. When there is discussion about low-cost mutual funds, they take a pass saying that isn't possible with them involved.
I think that is the revolution that Bogle and Schwab started.
Here we are seeing the worst of both worlds when people like Ackman want to tap into funds model (OEFs/ETFs/CEFs) but with hedge-fund like high fees. But 2/20 structure is forbidden by the SEC in the fund world.
Perhaps he'll compensate himself by having this new CEF gated with a limit on redemptions per quarter or something ... IIRC that is allowed for OEFs, so maybe it applies to CEFs too?
@rforno, that would be an interval-fund, a special type of CEF.
OEFs can only suspend redemption temporarily, but may impose redemption fees (like class B loads that have almost gone away now due to paperwork problems).
Nontraded/non-listed funds can do that too. We see that for once popular nontraded REITs such as Blackstone BReit and Starwood SReit - these have been under max redemption (2% per month or 5% per quarter) for over a year now.
2% is quite low by hedge fund standards. I’ll pass on this opportunity. Hedge funds for the filthy rich make some sense. I think as someone noted elsewhere, wealth at the upper level is concentrated in families and passed on generation to generation. Similar to how big pension funds operate. So a 5-10 year bear market and a 30% + haircut doesn’t mean that much. They will survive during the downturn and the generational wealth will eventually recover. Part of the key to high returns is the inability to withdraw assets at will. Otherwise, many might flee at low points in the market and disrupt the very long term strategy.
@sma3- I was going to post your link yesterday, but didn't because of the subscription issue. However I just followed your link and I now see that there is a "free account" option available. That will likely pester you with free "newsletters", but you can always set your email to ignore those.
I subscribe to Bloomberg and got his piece in email too. I am a bit leery for copyright reasons about copying the entire piece here, and got tired before I could sum it up for folks.
He does make a case for buying the Foreign one which trades at a discount to NAV but is leveraged.
I will see if we can compare it to some of the other large cap funds we like here
I am not sure I will continue my Bloomberg subscription. Levine is the best thing there but I don't find a lot of their articles terribly insightful. Even as a shadow of it's former self, WSJ seems to be better, but I refuse to give Murdoch any $. I can read it at the library
@davfor- being in our 80's we are now at the consolidation/protection stage, so most of the financial info that I post on MFO is hopefully of some interest to younger MFO-ers still playing the game.
That's a long way of admitting that because of the unusual length of that particular email newsletter I didn't really read it all the way through. Like you, I started to try and edit it down as I frequently do with these things, but gave up because it was just too damned much work.
Like you, I get his email version, which seems to be identical to the on-line Bloomberg version, and most of the time read it or at least skim it. It's always fun when he's detailing the foibles of humanity, which is actually most of the time. There was an absolutely hilarious column a week or so ago: "Pastor Got His Crypto Scam Audited" (God told me to do it).
Actually I'm not sure how I get Levine's email- I don't remember signing up at Bloomberg, but it was a long time ago, and my brainpan has developed substantial corrosion and leakage.
Comments
Fidelity charges £9 for the London Exchange transaction. At the current exchange rate of $1.26, that's around $11.35 - a lot cheaper than $50. Though I don't know what sort of stock price you'd get through each mechanism.
https://www.fidelity.com/stock-trading/faqs-international
https://www.fidelity.com/bin-public/060_www_fidelity_com/documents/Brokerage_Commissions_Fee_Schedule.pdf
https://www.reddit.com/r/fidelityinvestments/comments/pjvwvg/why_fidelity_charges_5000_foreign_settlement_fee/
"Ackman is waiving the management fee for the first 12 months and after the first year will charge a flat 2% fee."
Not sounding too attractive so far....
I'm not paying 2% unless Bill Ackman come over to the house to sweep up all the fur our border collie sheds. He (Ackman, not the dog) is free to repackage the proceeds as canine-backed derivatives.
Add "regular investor" to that list of phrases that includes "I'm just a country lawyer." That's the list that causes you to place two hands on your wallet.
Careful, he may use your canine derivative idea to launch the Derivatively Opportunistic Global Special High Interest Trends CEF next -- with a traditional 2/20 fee structure due to the high levels of dietary management involved with generating such.....returns. You can figure out what the ticker will be on that one.
I think that is the revolution that Bogle and Schwab started.
Here we are seeing the worst of both worlds when people like Ackman want to tap into funds model (OEFs/ETFs/CEFs) but with hedge-fund like high fees. But 2/20 structure is forbidden by the SEC in the fund world.
OEFs can only suspend redemption temporarily, but may impose redemption fees (like class B loads that have almost gone away now due to paperwork problems).
Nontraded/non-listed funds can do that too. We see that for once popular nontraded REITs such as Blackstone BReit and Starwood SReit - these have been under max redemption (2% per month or 5% per quarter) for over a year now.
Is there any reason why he couldn't have started an ETF and charged 2%?
From the article in the OP, i am not able to tell how this fund is materially from his existing fund, which I thought was also a CEF.
https://www.bloomberg.com/opinion/articles/2024-02-08/bill-ackman-wants-your-money?srnd=undefined&sref=OzMbRRMQ
I am not sure you can open it without subscription
What did you think of the piece?
I subscribe to Bloomberg and got his piece in email too. I am a bit leery for copyright reasons about copying the entire piece here, and got tired before I could sum it up for folks.
He does make a case for buying the Foreign one which trades at a discount to NAV but is leveraged.
I will see if we can compare it to some of the other large cap funds we like here
I am not sure I will continue my Bloomberg subscription. Levine is the best thing there but I don't find a lot of their articles terribly insightful. Even as a shadow of it's former self, WSJ seems to be better, but I refuse to give Murdoch any $. I can read it at the library
That's a long way of admitting that because of the unusual length of that particular email newsletter I didn't really read it all the way through. Like you, I started to try and edit it down as I frequently do with these things, but gave up because it was just too damned much work.
Like you, I get his email version, which seems to be identical to the on-line Bloomberg version, and most of the time read it or at least skim it. It's always fun when he's detailing the foibles of humanity, which is actually most of the time. There was an absolutely hilarious column a week or so ago: "Pastor Got His Crypto Scam Audited" (God told me to do it).
Actually I'm not sure how I get Levine's email- I don't remember signing up at Bloomberg, but it was a long time ago, and my brainpan has developed substantial corrosion and leakage.
OJ