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  1. This might be better for the BAM thread, but can you give an example of no3? I do not think investors get a free ride simply because they are sharing the risk. They share the risk in a fund also, but pay a fee to have BAM manage the asset. I think that would be the same with co-investments. The only way I would imagine investors don't pay a fee is if they bring something to the table in terms of managing/improving the asset. But if it is BAM doing that, my guess is they always charge a fee. I assume the same goes for Anchorage. Either it will have its own management/investment team, or
  2. I don’t really understand the distinction you’re trying to make. BAM absolutely charges fees when investors invest alongside them. My guess - and it is only a guess at this point - is that Anchorage will pay fees to FIH in the same way that FIH pays fees to FFH (and BIP pays fees to BAM). If so, OMERS (and any other shareholder in Anchorage) will effectively pay a fee to FIH in the same way that any of us, owning shares in FIH, effectively pays a fee to FFH. I could obviously be wrong about this, but only if Anchorage pays its own investment team. If FIH makes the investment dec
  3. Yes, I’ve read those. I’m skeptical that expanding steel making is part of Stelco’s plans for the land. It’s not something they’ve mentioned in calls and it doesn’t seem to be in the partitioning plan that got approved last year. All the commentary on the calls has been about development, square feet under roof, lease values, and cap rates. It’s pretty clear where they’re going. I know Stelco is protected from the costs of environmental remediation. I think this means they can’t be forced to clean up the land. I don’t think it means they can force someone else to clean up the land
  4. Been working on the land value. LOTS of assumptions in the workings below - please point out where I am wide of the mark. - 2017: Initially didn't want the land, which effectively became a pension asset rented by Stelco. - 2018: Did a 180 and bought 760 acres at Hamilton and 2300 at Nanticoke for $114m, paid with a 25 year 8% mortgage to the pension. Hamilton city described this as a sweetheart deal. Bad blood - city wants employment and taxes and wants to know Stelco doesn't just want lease revenue. Says Stelco hasn't responded to their requests to talk. - 2019: Bought 37 acres at Ha
  5. On reflection I think the right number for year end is 508, which is the 712m by which the fair value of investments in associates exceeds the carrying value less the 204m by which the carrying value of consolidated common equities exceeded market value. In other words if you were trying to calculate year end BVPS at fair/market value you’d add 508m or about $19 per share, and then you can add the $33 per share from marking Digit to the January valuation on a fully diluted basis. Clearly you can debate the fair value measure, especially for BIAL (though hopefully that debate is settled
  6. Petec, just so you know I think you are comparing some apples and oranges figures (this is due to the way FFH presents things). The $662 million FFH refers to is the market value of the common equities at 12/31 being less than the fair value by $662 million as laid out by Prem on page 10 of the annual report (due mainly to Eurobank and Quess). The $712 million figure that was mentioned by Jen Allen on the call corresponds to the Investment in Associates fair value over carrying value at 12/31/20 as laid out on page 72 of the annual. The biggest driver between these tables is the privat
  7. Hi all. Can anyone give me an informed estimate of construction costs for industrial and logistics real estate in North America? Ideally this would include buildings and services such as access roads and drainage, but not the cost of the land. Many thanks P
  8. For what they are worth, my notes on the call and letter. Haven't dissected the AR yet. Sorry about the formatting - doesn't paste well... ○ BVPS $478 and adjusted BVPS could be $535 by end Feb 2021. Letter says yearend carrying value exceeded market value by $662m or $25 per share, but on the call they said that after the early 2021 rally, fair exceeds carrying by $712m or $27 per share. In addition they own 74% of Digit on a fully converted basis, worth $1406m at the Jan 2021 mark, but carried at $517m for a gap of $889m or $33 per share. ○ 2020 a real stress test, yet they managed to:
  9. On Digit, my understanding is that 1) they currently own 49% at a carrying value of $900 for 100%, implying an asset of c. $450m. 2) recent fundraising was done at a value of $1.9bn for 100%. 3) Fairfax own convertibles that get them to 74% without injecting additional capital. In other words, you could argue that their $450m asset is actually worth 74%*1900=$1400, an unrealised and unbooked gain of $950m or $35 per share. Is this right? Edit: their cost is actually $42+$475 = $517 so the bvps gap is more like $33.
  10. You guys are overthinking this. FIH wants to invest in infrastructure in India. That's better done in a separate entity. This is a huge market so with any luck they will need to raise a lot of capital for this venture, and a dedicated infrastructure platform will almost certainly have a lower cost of capital than a general value-oriented closed-end fund like FIH. The advantage for FIH shareholders is that they probably get to charge a fee stream on what could be a substantial amount of third party capital in 5 or 10 years. That's very valuable, and comes at a higher ROIC than it would i
  11. I think that’s exactly right. I’d add that management making good decisions leading to relatively small advantages in efficiency, safety, customer service, capital allocation, cost of capital etc...in a highly levered cyclical business all this adds up to the difference between compounding at a reasonable rate and going bankrupt.
  12. Somewhat related, the last couple of Aercap calls have interesting comments on the moats that can be built in leasing. Obviously the markets are different but I found them interesting.
  13. Sounds like they might get a shot at the GHIAL stake too, and the Anchorage IPO is the ideal opportunity to raise the funds.
  14. No, I think that time for Fairfax was back in 2003. The decision that we are no longer going to buy crappy insurers and turn them around led to the group of quality insurers they have today. The second part of that was making Andy Barnard in charge of all of the insurers. Even with Fairfax's more eclectic style of investing, the real culprit behind their underperformance has been due to betting against and shorting the market after 2009. They took advantage of the 50% correction, but started hedging and that really hurt their performance. Even with minimal exposure to the stock market,
  15. I should add that the timing thing allows management to game the announced IRR. It's great if the equity concerned can be realised from some other high-return use just in time to be allocated to this one. But if the cash just sits on the BS doing nothing until it is needed, then the IRR on the ship is arguably overstated. To get the right IRR you'd need to include the time the cash sat there waiting to be deployed, but management is unlikely to do this because they like to look clever.
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