nwoodman

“1. Sealed Indictment: • The indictment was initially sealed and later unsealed, which is common in grand jury proceedings to protect the investigation’s integrity. 2. Federal Jurisdiction: • The involvement of federal crimes like securities fraud, wire fraud, and violations of the Foreign Corrupt Practices Act (FCPA) typically necessitates a grand jury indictment. 3. Mention of the Grand Jury: • The DOJ notes obstruction of the “grand jury” investigation as part of the charges, reinforcing that a grand jury was integral to the process.”

Good one, happy to have some clarity on this with some filing rigour.

Management is everything for these outliers. As a passive minority investor are we better equiped to handle those risks through diversification than the professionals that are trying to build the 100 year company. It might be a “warm comfy blanket”, but for my money, I am backing sharp risk managers and sharp capital allocators and a culture over an index any day. The more sensible question is your willingness to handle the 50-70% drawdown of the general market, especially in an a “indexing world”. Caveat, Price/Value is everything.

All good, I fumble around in the dark at times on these filings so see the edit above. Can you point me in the direction of the $250m you referenced previously?

It looks like this is disclosed on Page 6 (Note 3) of the Odyssey filing Edit: This seems to be upstreaming, as Newline UK is a sub of Odyssey. Quite confusing as I thought the Chandler Family and Exponent Private Equity were still participating. However if that is no longer the case maybe the 35% and the 250m give the total amount, as other Fairfax insurance subs hold the remaining 64.9%. See Schedule Y: Odyssey Reinsurance Company: 35.06% Crum and Foster United States Fire Insurance Company: 12.68% Zenith Insurance Company: 20.30% Federated Insurance Company of Canada: 1.01% Northbridge General Insurance Corporation: 3.55% Allied World Assurance Company (Europe) dac: 3.55% Allied World Assurance Company (U.S.) Inc.: 4.06% Allied World National Assurance Company: 7.61% Allied World Insurance Company: 4.06% Allied World Specialty Insurance Company: 4.06% Allied World Surplus Lines Insurance Company: 4.06%

Gautam Adani Charged by US Over Alleged $250 Million Bribe Plot US prosecutors charged Gautam Adani, one of the world’s richest people, with participating in a scheme that involved promising to pay more than $250 million in bribes to Indian government officials to secure solar energy contracts. https://www.bloomberg.com/news/articles/2024-11-20/us-prosecutors-indict-gautam-adani-on-bribery-charges?embedded-checkout=true “Gautam Adani can be indicted in the USA because the alleged fraud and bribery scheme involved misleading American investors and financial institutions. U.S. prosecutors claim that Adani and his associates provided false information to secure investments from U.S. and international sources while engaging in bribery to obtain contracts in India. The U.S. legal system has jurisdiction over cases involving fraud that affects American investors, even if the primary activities occurred outside the country.” The Guardian article has a bit more color https://www.theguardian.com/business/2024/nov/20/gautam-adani-charged-alleged-bribes Prosecutors charged the chair of Indian conglomerate Adani Group and two other executives of a renewable energy company with securities fraud and conspiring to commit securities and wire fraud. The US attorney’s office in Brooklyn accused the executives of agreeing to pay hundreds of millions of dollars’ worth of bribes to Indian government officials between 2020 and 2024, in a bid to obtain solar energy supply contracts expected to yield $2bn in profits over 20 years. Separately, the Securities and Exchange Commission (SEC), the US’s top markets watchdog, charged Adani, 62, and two other executives over conduct it said had arisen out of a “massive bribery scheme”…… Prosecutors alleged that, on several occasions, Adani personally met with an Indian government official to advance the bribery scheme. The executives are accused of having frequently discussed efforts to further the scheme, including via a messaging app. One of the defendants, Sagar R Adani, tracked “specific details of the bribes offered and promised to government officials” on his phone, according to prosecutors. DOJ https://www.justice.gov/usao-edny/pr/billionaire-chairman-conglomerate-and-seven-other-senior-business-executives-indicted By way of reference to the Canadian institutional investor: “Also named in the indictment were Ranjit Gupta and Rupesh Agarwal, former executives of Azure Power, and Cyril Cabanes, Saurabh Agarwal, and Deepak Malhotra, former employees of Canadian institutional investor Caisse de Depot et Placement du Quebec.” 1. Indian Renewable Energy Company: • Adani Green Energy Limited (AGEL): A subsidiary of the Adani Group, AGEL is a prominent player in India’s renewable energy sector, focusing on solar and wind power projects. The company has been involved in large-scale solar energy initiatives and has raised substantial capital through international loans and bond offerings. 2. NYSE-Listed Renewable Energy Company: • Azure Power Global Limited: An independent solar power producer that was listed on the New York Stock Exchange (NYSE). Azure Power has developed and operated solar projects across India and has engaged in capital-raising activities through U.S. financial markets. 3. Canadian Institutional Investor: • Caisse de dépôt et placement du Québec (CDPQ): A Canadian institutional investor managing funds primarily for public and parapublic pension and insurance plans. CDPQ has invested in various infrastructure projects globally, including renewable energy ventures in India. Key Individuals and Their Affiliations: • Gautam S. Adani: Chairman of the Adani Group, which includes AGEL. He is a central figure in the conglomerate’s expansion into renewable energy. • Sagar R. Adani: An executive within the Adani Group, closely associated with AGEL’s operations. • Vneet S. Jaain: CEO of AGEL, overseeing the company’s renewable energy projects and strategic initiatives. • Ranjit Gupta: Former CEO of Azure Power Global Limited, responsible for leading the company’s solar power projects and expansion efforts. • Rupesh Agarwal: Former CFO of Azure Power Global Limited, involved in the company’s financial operations and capital-raising activities. • Cyril Cabanes: Former Managing Director of Infrastructure, Asia-Pacific at CDPQ, overseeing infrastructure investments, including renewable energy projects in the region. • Saurabh Agarwal: Former Managing Director of CDPQ India and Managing Director, Infrastructure for South Asia, involved in CDPQ’s investment strategies in the Indian market. • Deepak Malhotra: Former Director, Infrastructure for South Asia at CDPQ, contributing to the firm’s infrastructure investment decisions in the region.

The shift in funding is definitely a sign of strength and signals confidence in future cash flows. Apart from the bottom line impacts, strategically there might be some upside in terms of credit ratings. Lower WACC, improved cashflow, EBITDA margins etc. All very positive Edit: It would impact their capital adequacy ratios as Prefs are Tier 1 and Debt obviously doesn’t count. So they must be seeing the change as neutral in terms of their capital adequacy threshold. I also wonder if it provides some clues in terms of their view on the pricing of debt in general and the direction of rates.

Some coverage on the debt raise for Sleep Country Sleep Country Canada Holdings Inc. is talking to investors about a potential Canadian-dollar bond sale to help finance its C$1.7 billion acquisition by Fairfax Financial Holdings Ltd. in what would be a rare leveraged buyout funded by loonie-denominated bonds, according to a person with knowledge of the matter. The Canadian mattress retailer is holding a call for fixed-income investors on Wednesday, organized by National Bank Financial Markets and Scotia Capital, Bloomberg reported earlier. The company is expected to receive at least one credit rating that's below investment grade, according to the person, who asked not to be identified discussing private matters. https://www.bloomberg.com/news/articles/2024-11-19/sleep-country-mulls-potential-bond-sale-in-rare-leveraged-buyout?srnd=phx-markets

Love these paid to wait deals

Short video of Fokion Karavias discussing the fortunate problem of excess capital. He reiterates comments from the Q3 results i.e. payout ratio raised to 50%. M&A is still on the cards but looking east (Middle East and India). Also discusses their plans to leverage their strong presence in Greece and Cyprus to act as a gateway for corporates from the ME/I to the EU. https://www.bloomberg.com/news/videos/2024-11-18/banks-in-greece-have-excess-capital-eurobank-ceo-says-video

@Hamburg Investor interesting topic and one that I have pondered for Berkshire as well as Fairfax. Obviously value is created when purchases are below IV, but see if the thinking below links ROE to GIVPS. Quasi maths (motherhood statements) to one side the value that has been created through the TRS/Buyback program has been phenomenal. A Charlie Munger “lollapalooza” springs to mind. Formula for Growth in Intrinsic Value Per Share (GIVPS): GIVPS Growth = ROE + BY × (IV / P) Definitions: 1. ROE (Return on Equity): • Definition: The annual return generated on shareholders’ equity. • Importance: Reflects the organic growth rate of equity if all earnings are retained. 2. BY (Buyback Yield): • Definition: The rate of shares repurchased relative to the company’s market cap. • Formula: BY = Buyback Rate / Price Paid per Share (P) • Importance: Indicates how much of the company’s equity is retired annually via buybacks, directly influencing GIVPS. 3. IV (Intrinsic Value per Share): • Definition: The estimated true economic value of a single share. • Importance: Determines whether buybacks create or destroy value, as buybacks below IV are accretive while those above are dilutive. 4. P (Price Paid per Share): • Definition: The market price at which shares are repurchased. • Importance: If P < IV, buybacks amplify intrinsic value growth; if P > IV, they dilute it. 5. Adjustment Factor: • Formula: (IV / P) • Definition: Adjusts the impact of buybacks based on the relationship between intrinsic value and price paid. • Importance: Ensures buybacks’ effect on intrinsic value per share is correctly accounted for. Why These Components Matter: • ROE represents operational performance and sets the baseline for equity growth. • Buyback Yield measures the effect of share reduction on GIVPS. • The relationship between IV and P determines whether buybacks are accretive or dilutive. GIVPS Growth = ROE + Buyback Yield × (Intrinsic Value / Price Paid)

Many thanks

Deserves its own thread! It’s triggering my PTSD

I will accept low double digit returns, given tax considerations may even accept a little lower. I figured we were at the 11%-12% CAGR point at the start of the year in terms of book and price appreciation so good thing I was content with that as an outcome. I have been willing to hold Berkshire on this basis for 15ys+ and personally think the forward prospects for Fairfax are better given exposure to . It’s got to be trading north of 1.5x’s adjusted book to even bother with a calculator these days The index add is more about answering a couple of my own thesis, so more of a curiosity than a line in the sand.