Pershing Square Holdings debuts ...

[muscleman]

Withholding Taxes

The Fund is not subject to any income or capital gains taxes in Guernsey. The only taxes payable by the

Fund on its income are withholding taxes applicable to certain investment income. As a result, no income

tax liability or expense has been recorded in the accompanying financial statements.

[muscleman]

How to buy this stock in US ?

 

IB and Fidelity offers international trading. :)

[PhatKing]

If you want to invest with Ackman, and don't want the hassle of foreign taxes, or, buying a foreign entity, then investing in PAH should be considered. Ackman recently (last week) increased his position in PAH by about 28%, by subscribing to their offering at $25.59. The stock currently trades below that price, and so you would be getting in at a lower price than him.

 

Disclosure: I am long PAH. 

[muscleman]

If you want to invest with Ackman, and don't want the hassle of foreign taxes, or, buying a foreign entity, then investing in PAH should be considered. Ackman recently (last week) increased his position in PAH by about 28%, by subscribing to their offering at $25.59. The stock currently trades below that price, and so you would be getting in at a lower price than him.

 

Disclosure: I am long PAH.

 

Why will there be foreign taxes if US residents buy PSH? We will only pay tax to IRS when we sell for a profit, right?

[KCLarkin]

Why will there be foreign taxes if US residents buy PSH? We will only pay tax to IRS when we sell for a profit, right?

 

Does anyone know the answer to this for Canadian or US investors? Will be PSH be making capital gains or dividend distributions or will all income be reinvested in the fund tax free?

[Evolveus]

Here is Ackman's first letter to the Public shareholders of PSH

Pershing-Square-Holdings-Ltd_-Q3Investor-Letter.pdf

[peter1234]

Here is Ackman's first letter to the Public shareholders of PSH

 

And here is his pitch for his stock:

Companies which have earned mid- to high-teen returns on equity over this same period also trade at substantial premiums to book value. Doing the same screen for average ROEs of 15% to 20% yields 380 companies with a median market cap of $6.1 billion that trade at a median price to book ratio of 2.7 times.

;)

[Mephistopheles]

Dumb question, but why is the NAV at $2.7 billion ($24.41), and they say the stock is selling at NAV, but at the same time it also has a market cap of $6 billion?

 

Can anyone enlighten me on this?

[peter1234]

Dumb question, but why is the NAV at $2.7 billion ($24.41), and they say the stock is selling at NAV, but at the same time it also has a market cap of $6 billion?

 

Can anyone enlighten me on this?

 

Let me try to enlighten you ...

;)

 

Not sure where you get NAV of $2.7b from?

 

From last letter:

PSH has a market cap of $6.2 billion and currently trades at a 5% discount to the last reported NAV of $26.57 per share.

 

Look at this

http://pershingsquareholdings.com/media/2014/09/PSH-Monthly-CFTC-Statement-10.31.14.pdf

Public Shares: $6b, 239.4M shares, NAV $25

;)

 

 

[Ham Hockers]

Does anyone know how this is treated for tax purposes for U.S. individuals? Most of these structures I have seen are pass throughs.

 

Also, are there any ERISA experts around who can opine on whether or not a personal retirement account would fall under the ERISA restrictions for ownership?

[muscleman]

Does anyone know how this is treated for tax purposes for U.S. individuals? Most of these structures I have seen are pass throughs.

 

Also, are there any ERISA experts around who can opine on whether or not a personal retirement account would fall under the ERISA restrictions for ownership?

 

Are you sure? I thought there would be no tax until you sell. Just like an ordinary stock holding.

[Mephistopheles]

Dumb question, but why is the NAV at $2.7 billion ($24.41), and they say the stock is selling at NAV, but at the same time it also has a market cap of $6 billion?

 

Can anyone enlighten me on this?

 

Let me try to enlighten you ...

;)

 

Not sure where you get NAV of $2.7b from?

 

From last letter:

PSH has a market cap of $6.2 billion and currently trades at a 5% discount to the last reported NAV of $26.57 per share.

 

Look at this

http://pershingsquareholdings.com/media/2014/09/PSH-Monthly-CFTC-Statement-10.31.14.pdf

Public Shares: $6b, 239.4M shares, NAV $25

;)

 

 

 

Thanks! I'm not sure why but when they did the IPO there were some articles equating the $2.7 billion raised to the NAV. That's where I got the # from, $2.7 billion is what they raised in the IPO.

[berkshire101]

Ackman is having quite a year in 2015.  I can see why people are suddenly interested in the IPO.  I would happily let Ackman invest my money.  Too bad there's a wall to climb to do so for US investors.

[Morgan]

If I remember correctly from a Charlie Rose interview, Ackman was getting tough questions on his recent activist investment that had done poorly (JcPenny I think), and Ackman said he'd invested in 24 companies and only three have done poorly. 21 for 24. That is one seriously good record. I wish I could fail as badly as Mr. Ackman. Certainly I'd never bet against him and he is definitely smart and hardworking. You don't become a self made billionaire because you're stupid that's for sure. More on topic though, I won't be buying any of this, but I wish him all the best.

[no_thanks]

If I remember correctly from a Charlie Rose interview, Ackman was getting tough questions on his recent activist investment that had done poorly (JcPenny I think), and Ackman said he'd invested in 24 companies and only three have done poorly. 21 for 24. That is one seriously good record. I wish I could fail as badly as Mr. Ackman. Certainly I'd never bet against him and he is definitely smart and hardworking. You don't become a self made billionaire because you're stupid that's for sure. More on topic though, I won't be buying any of this, but I wish him all the best.

 

Not really trying to knock him, as I think he is a good investor, but I just saw the other day that supposedly his parents are billionaires as well, maybe.  Hard to call it completely self made then, but he definitely seems smart and hardworking. 

[muscleman]

Too bad there's a wall to climb to do so for US investors.

 

Why is that? I use IB and I could buy the PSH shares with no problem at very low cost. Fidelity can do it too but would charge you a pretty big commission.

[oddballstocks]

Does anyone know how this is treated for tax purposes for U.S. individuals? Most of these structures I have seen are pass throughs.

 

Also, are there any ERISA experts around who can opine on whether or not a personal retirement account would fall under the ERISA restrictions for ownership?

 

Are you sure? I thought there would be no tax until you sell. Just like an ordinary stock holding.

 

Or even worse a PFIC.  That's a separate level of hell altogether...  If this is a PFIC and you're in the US avoid investing in this in a taxable account unless you have a killer accountant, or want to mess with the taxes on this on your own.

 

If this is a PFIC (from some Googling I believe it is) you have to pay taxes on the increase in NCAV over the year regardless of your holding period.  For example, if the fund trades at $10 on Jan 1st and $12 Dec 31st you have to pay taxes on the 20% gain even if you purchased at $11.  If you purchase at $11 and sell at $10 you still pay taxes even though you lost money.

 

Brokerage fees aren't the issue here, it's the tax classification.  For many investors this is stuffed in a trust, or in a fund where the manager/custodian doesn't worry about these issues.  For individuals it's a different story.  This is why many fund companies list the management company to get around these restrictions.

[berkshire101]

Too bad there's a wall to climb to do so for US investors.

 

Why is that? I use IB and I could buy the PSH shares with no problem at very low cost. Fidelity can do it too but would charge you a pretty big commission.

 

I'm with Schwab and PSH doesn't even show up in their database.  Lame, I should switch brokers.

[jay21]

Too bad there's a wall to climb to do so for US investors.

 

Why is that? I use IB and I could buy the PSH shares with no problem at very low cost. Fidelity can do it too but would charge you a pretty big commission.

 

I'm with Schwab and PSH doesn't even show up in their database.  Lame, I should switch brokers.

 

Call them or use the chat feature. I think they will find a way to take your money.

[oddballstocks]

Too bad there's a wall to climb to do so for US investors.

 

Why is that? I use IB and I could buy the PSH shares with no problem at very low cost. Fidelity can do it too but would charge you a pretty big commission.

 

I'm with Schwab and PSH doesn't even show up in their database.  Lame, I should switch brokers.

 

Do you have the Schwab International account?  I believe you can buy on Amsterdam there without an issue.  I purchased some stocks in Japan with them easily.  It's a separate product though (international trading).

[Ham Hockers]

Does anyone know how this is treated for tax purposes for U.S. individuals? Most of these structures I have seen are pass throughs.

 

Also, are there any ERISA experts around who can opine on whether or not a personal retirement account would fall under the ERISA restrictions for ownership?

 

Are you sure? I thought there would be no tax until you sell. Just like an ordinary stock holding.

 

Or even worse a PFIC.  That's a separate level of hell altogether...  If this is a PFIC and you're in the US avoid investing in this in a taxable account unless you have a killer accountant, or want to mess with the taxes on this on your own.

 

If this is a PFIC (from some Googling I believe it is) you have to pay taxes on the increase in NCAV over the year regardless of your holding period.  For example, if the fund trades at $10 on Jan 1st and $12 Dec 31st you have to pay taxes on the 20% gain even if you purchased at $11.  If you purchase at $11 and sell at $10 you still pay taxes even though you lost money.

 

Brokerage fees aren't the issue here, it's the tax classification.  For many investors this is stuffed in a trust, or in a fund where the manager/custodian doesn't worry about these issues.  For individuals it's a different story.  This is why many fund companies list the management company to get around these restrictions.

 

Yes that would be bad, but any type of pass through would be annoying if PSH didn't distribute everything.

 

And I would hesitate to buy this in a retirement account without fully understanding the ERISA restrictions (as I don't). I suggest people read the prospectus ...

[muscleman]

Does anyone know how this is treated for tax purposes for U.S. individuals? Most of these structures I have seen are pass throughs.

 

Also, are there any ERISA experts around who can opine on whether or not a personal retirement account would fall under the ERISA restrictions for ownership?

 

Are you sure? I thought there would be no tax until you sell. Just like an ordinary stock holding.

 

Or even worse a PFIC.  That's a separate level of hell altogether...  If this is a PFIC and you're in the US avoid investing in this in a taxable account unless you have a killer accountant, or want to mess with the taxes on this on your own.

 

If this is a PFIC (from some Googling I believe it is) you have to pay taxes on the increase in NCAV over the year regardless of your holding period.  For example, if the fund trades at $10 on Jan 1st and $12 Dec 31st you have to pay taxes on the 20% gain even if you purchased at $11.  If you purchase at $11 and sell at $10 you still pay taxes even though you lost money.

 

Brokerage fees aren't the issue here, it's the tax classification.  For many investors this is stuffed in a trust, or in a fund where the manager/custodian doesn't worry about these issues.  For individuals it's a different story.  This is why many fund companies list the management company to get around these restrictions.

 

Yes that would be bad, but any type of pass through would be annoying if PSH didn't distribute everything.

 

And I would hesitate to buy this in a retirement account without fully understanding the ERISA restrictions (as I don't). I suggest people read the prospectus ...

 

I read through the prospectus but didn't see any mention of PFIC. If this is indeed incorporated as a PFIC, I would at least expect some mention of that in the prospectus. Weird....

http://pershingsquareholdings.com/media/2014/09/Prospectus-Dated-2-October-2014.pdf

 

So what you are saying is that if this is a PFIC, and someone bought in January and sold in Feburary to another guy. The NAV increased from $10 on Jan 1st to $12 on Dec 31st. Then at year end, both persons are subject to paying that 20% increase in NAV?

[Ham Hockers]

Does anyone know how this is treated for tax purposes for U.S. individuals? Most of these structures I have seen are pass throughs.

 

Also, are there any ERISA experts around who can opine on whether or not a personal retirement account would fall under the ERISA restrictions for ownership?

 

Are you sure? I thought there would be no tax until you sell. Just like an ordinary stock holding.

 

Or even worse a PFIC.  That's a separate level of hell altogether...  If this is a PFIC and you're in the US avoid investing in this in a taxable account unless you have a killer accountant, or want to mess with the taxes on this on your own.

 

If this is a PFIC (from some Googling I believe it is) you have to pay taxes on the increase in NCAV over the year regardless of your holding period.  For example, if the fund trades at $10 on Jan 1st and $12 Dec 31st you have to pay taxes on the 20% gain even if you purchased at $11.  If you purchase at $11 and sell at $10 you still pay taxes even though you lost money.

 

Brokerage fees aren't the issue here, it's the tax classification.  For many investors this is stuffed in a trust, or in a fund where the manager/custodian doesn't worry about these issues.  For individuals it's a different story.  This is why many fund companies list the management company to get around these restrictions.

 

Yes that would be bad, but any type of pass through would be annoying if PSH didn't distribute everything.

 

And I would hesitate to buy this in a retirement account without fully understanding the ERISA restrictions (as I don't). I suggest people read the prospectus ...

 

I read through the prospectus but didn't see any mention of PFIC. If this is indeed incorporated as a PFIC, I would at least expect some mention of that in the prospectus. Weird....

http://pershingsquareholdings.com/media/2014/09/Prospectus-Dated-2-October-2014.pdf

 

So what you are saying is that if this is a PFIC, and someone bought in January and sold in Feburary to another guy. The NAV increased from $10 on Jan 1st to $12 on Dec 31st. Then at year end, both persons are subject to paying that 20% increase in NAV?

 

I was suggesting reading the prospectus for the ERISA stuff.

 

There's nothing in there about U.S. tax treatment because I believe they specifically avoided selling IPO shares to U.S. individuals.

[Morgan]

Not really trying to knock him, as I think he is a good investor, but I just saw the other day that supposedly his parents are billionaires as well, maybe.  Hard to call it completely self made then, but he definitely seems smart and hardworking.

 

Hm. Interesting. I've never read that. Do you happen to remember where you saw that? I imagine they were fairly well off, but not $100m+ family when he was growing up. Thanks!

[muscleman]

Does anyone know how this is treated for tax purposes for U.S. individuals? Most of these structures I have seen are pass throughs.

 

Also, are there any ERISA experts around who can opine on whether or not a personal retirement account would fall under the ERISA restrictions for ownership?

 

Are you sure? I thought there would be no tax until you sell. Just like an ordinary stock holding.

 

Or even worse a PFIC.  That's a separate level of hell altogether...  If this is a PFIC and you're in the US avoid investing in this in a taxable account unless you have a killer accountant, or want to mess with the taxes on this on your own.

 

If this is a PFIC (from some Googling I believe it is) you have to pay taxes on the increase in NCAV over the year regardless of your holding period.  For example, if the fund trades at $10 on Jan 1st and $12 Dec 31st you have to pay taxes on the 20% gain even if you purchased at $11.  If you purchase at $11 and sell at $10 you still pay taxes even though you lost money.

 

Brokerage fees aren't the issue here, it's the tax classification.  For many investors this is stuffed in a trust, or in a fund where the manager/custodian doesn't worry about these issues.  For individuals it's a different story.  This is why many fund companies list the management company to get around these restrictions.

 

Yes that would be bad, but any type of pass through would be annoying if PSH didn't distribute everything.

 

And I would hesitate to buy this in a retirement account without fully understanding the ERISA restrictions (as I don't). I suggest people read the prospectus ...

 

I read through the prospectus but didn't see any mention of PFIC. If this is indeed incorporated as a PFIC, I would at least expect some mention of that in the prospectus. Weird....

http://pershingsquareholdings.com/media/2014/09/Prospectus-Dated-2-October-2014.pdf

 

So what you are saying is that if this is a PFIC, and someone bought in January and sold in Feburary to another guy. The NAV increased from $10 on Jan 1st to $12 on Dec 31st. Then at year end, both persons are subject to paying that 20% increase in NAV?

 

I was suggesting reading the prospectus for the ERISA stuff.

 

There's nothing in there about U.S. tax treatment because I believe they specifically avoided selling IPO shares to U.S. individuals.

 

Oh... I see. PSH NAV increased a lot this year. Does this mean if I hold it through year end, I have  to pay the tax on the NAV increase from Jan 1st to Dec 31st? What if I sell now?