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The Time Has Come...


Parsad
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Dear boardmembers and readers of Corner of Berkshire & Fairfax:

 

Over the next few weeks, I will be providing significant information about our new public company vehicle to interested parties.  Several years ago, Prem told me over lunch to just start my fund with whatever I could raise.  Alnesh and I were fortunate enough to raise four hundred thousand from three unknown, but very trusting partners, and so we slowly but surely started the MPIC Funds!  All three partners are still with us, and one of them is our director Andrew Cooke!

 

Now over 8 years later, and ironically at the same time my friend Mohnish Pabrai is launching his own but far larger vehicle, we have a confluence of activity that has lead to this.  The targeted distressed company is in turnaround mode where we are restoring cash flows from a portion of its business that was inactive.  We have spent several months implementing absent internal controls, that were simply washing the existing cash flows into oblivion, rather than creating any value for shareholders.  A complete change in culture, the board and management was required.

 

We are also set to participate as one of the largest investors in a new Bermuda reinsurance vehicle, with at least one board seat, and it will be run by a well-known insurance executive and a very talented actuary.  We've been fortunate enough to associate with good people, who complement the deficiencies within our own skillset.

 

At the same time, we are in the process of preparing a private placement for the company to increase investment capital.  The first step will be to issue rights to existing shareholders to maintain their ownership.  After that, the remaining participation will come from MPIC partners who will be given the first chance to invest directly into this company, and any interest by those that contact me and ask to be put on our information list when we finally disclose all of the details. 

 

I've been very vocal about management and corporate behavior in the past.  I assure you that this vehicle will be one of the few to live up to the ethical standards of those managers and mentors who we hold in such high regard.  Cost efficiencies, return on investment, and a solid balance sheet will be the long-term objectives as we seek out investments and businesses with a margin of safety.  We will walk the walk as we have with our funds, and we promise to talk the talk...no surprises in compensation here!  And the company will never carry my name!

 

Finally, the MPIC Funds will be the largest investor in the company, and we expect our partners to do very well over the long-term by leveraging captive capital through this enterprise.  Our office address will be changing over the next few months, as I will be at the new company's head office virtually every day. 

 

I thank you all my friends, partners and board members!  Sometimes you are fortunate enough to get to do exactly what you want, and I've been blessed with that luck for the last few years.  Details are forthcoming, but these days...as we've often heard others say...I truly tap dance to work!

 

If you are interested in receiving information about the company and private placement when fully drafted, please email me at cornermarketcapital@gmail.com.  We hope to have the private placement fully closed by the end of November. 

 

Sanjeev Parsad

       

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Hi Sanjeev, just to clarify: When you say "we are set to participate" in the Bermuda vehicle, is that the new public company which is participating or MPIC funds?

 

Public company will be investing directly in Bermuda vehicle.  MPIC Funds will be the largest shareholder in the public company.  All acquisitions of private enterprises will occur through the public company, while MPIC will continue to manage assets as it does. 

 

At some point, Corner Market Capital (MPIC's general partner) will be roled into the company like Hamblin-Watsa was in Fairfax, and it will become another cash flow machine for the pubco.

 

 

congratulations! Is the company going to be listed publicly at some point??

 

cheers

Zorro

 

 

Already a public company.  Press release will go out in the next couple of days.  Will move to a larger listing in the New Year.  Cheers!

 

 

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And the company will never carry my name!

 

I got a chuckle out of that. I guess there will be no Sanjeev Holdings.  :)

 

Congrats!

How about, more simply, Biglunch Holdings.  Congrats Sanjeev. 

 

It's just not the same when you can't personally charge the company for use of your name.

 

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