Fairfax India new issue

[mananainvesting]

Fairfax India writeup: https://www.latticework.com/p/fairfax-india-well-managed-cheap 

 

you can listen to about 11min for free and download the ppt. 

[Hsmpanl]

1 hour ago, mananainvesting said:

Fairfax India writeup: https://www.latticework.com/p/fairfax-india-well-managed-cheap 

 

you can listen to about 11min for free and download the ppt. 

This is great, thanks for sharing!

[SafetyinNumbers]

On 3/18/2025 at 9:43 AM, jbwent63 said:

I read somewhere that the Indian government is privatizing some airports. Any chance FFHI et al might be involved in a purchase of more airports given the success of BIAL? 

That’s what Anchorage is supposed to do. My understanding is they have been bidding but have so far been unsuccessful. More to come. 

[hardcorevalue]

If Fairfax announced tomorrow that they were buying all of Fairfax India for $30 (1.5x stated book value) would you consider that an acceptable outcome as a FIH and FFH shareholder?

[thowed]

Off top of my head, no - I hope to hold long-term, and hope that BIAL and other stuff once they've IPO'ed will continue to grow, and you can't really find these assets elsewhere.

 

However, given that it we don't know just how long the IPO will take, perhaps if there were other opportunities (e.g. .... add to FFH), it would be worth taking a near-double now.

 

How would you feel?

[Gopinath]

35 minutes ago, hardcorevalue said:

If Fairfax announced tomorrow that they were buying all of Fairfax India for $30 (1.5x stated book value) would you consider that an acceptable outcome as a FIH and FFH shareholder?

Yes, I think its acceptable to me if they pay me in $FFH shares.

[Crip1]

48 minutes ago, hardcorevalue said:

If Fairfax announced tomorrow that they were buying all of Fairfax India for $30 (1.5x stated book value) would you consider that an acceptable outcome as a FIH and FFH shareholder?

It depends a certain amount on how it impacted the share price of FFH but, excluding that, I'd be less than overjoyed. India is an interesting macro market. It is outside of my circle of competence so rather than picking my own stocks to hold, I like the idea of letting a more informed money manager do so for me, hence my FFHI investment.  If this happened, I'd likely get an India Index fund or two.

 

-Crip

[bluedevil]

I would not.

Let BIAL go public, let’s see what market says on that one; and then go from there. 
 

if you invested at beginning, at a 15% return, we should be at $40 now.  I think that is more reflective of true value. 

[TwoCitiesCapital]

1 hour ago, hardcorevalue said:

If Fairfax announced tomorrow that they were buying all of Fairfax India for $30 (1.5x stated book value) would you consider that an acceptable outcome as a FIH and FFH shareholder?

 

1 hour ago, Gopinath said:

Yes, I think its acceptable to me if they pay me in $FFH shares.

/\/\

 

$30 per share in FFH shares would be acceptable to me. My India exposure would be diluted some, but still with reasonably cheap shares, continued exposure the team making the decisions, and the removal of the fee-layer at an immediate 50+% mark-up? I'd take it. 

[gfp]

3 hours ago, Gopinath said:

Yes, I think its acceptable to me if they pay me in $FFH shares.

 

I'm with Gopi on this one.  But I don't see Fairfax offering shares in a deal and people have told me they vowed to keep these two entities separate.  Who knows.  Gotta come up with some capital to grow FIH some kinda way.  Adding complicated GP/LP co-investment structures have worked OK in the past but simple is better

[dartmonkey]

59 minutes ago, gfp said:

I'm with Gopi on this one.  But I don't see Fairfax offering shares in a deal and people have told me they vowed to keep these two entities separate.

I am greedy enough to happily accept a 76% premium, despite also agreeing that it is probably worth a bit more. It would take my CAGR to 12% over 10 years, not brilliant, but a hell of a lot better than the current 5% (or maybe a little higher, since I bought a fair number of shares at $12-14 in the last 2 years). But a bird in hand, and all that.

 

And I couldn't care less whether I get cash or FFH shares; getting cash instead of shares just means I have to spend about 30 seconds more and pay less than $10 in commissions, each of which I can live with. And given my high concentration in both FFH and FIH, I would probably also by a little bit of something else that's down more, like GOOG and IBKR. 

[Txvestor]

5 hours ago, hardcorevalue said:

If Fairfax announced tomorrow that they were buying all of Fairfax India for $30 (1.5x stated book value) would you consider that an acceptable outcome as a FIH and FFH shareholder?

Only if they paid me in Fairfax shares and avoided me paying capital gains. 

[villainx]

What would be the point of FFH buying FIH?  I guess Anchorage can IPO and also pretty much be stuck with a discount, or trapped in a declining India market?  But there's a plan in place to fund raise for additional investment in infrastructure, airports, etc.  Or is it capital for IDBI or other larger opportunistic plays?

[TwoCitiesCapital]

43 minutes ago, villainx said:

What would be the point of FFH buying FIH?  I guess Anchorage can IPO and also pretty much be stuck with a discount, or trapped in a declining India market?  But there's a plan in place to fund raise for additional investment in infrastructure, airports, etc.  Or is it capital for IDBI or other larger opportunistic plays?

 

They'd get to immediately write up of their Fairfax India and realize a large gain for income statement purposes. Also allows them to consolidate a more complicated structure with potential conflicts of interest to a simpler one.  

 

The downside is they'd lose the ongoing fee income. 

[SafetyinNumbers]

31 minutes ago, TwoCitiesCapital said:

 

They'd get to immediately write up of their Fairfax India and realize a large gain for income statement purposes. Also allows them to consolidate a more complicated structure with potential conflicts of interest to a simpler one.  

 

The downside is they'd lose the ongoing fee income. 

The other downside is the beneficial capital treatment FFH gets in the insurance subsidiaries for owning a publicly traded company vs owning a bunch of private Indian companies directly. 
 

I think Anchorage will give them paper to do deals once it lists. They can also sell some Anchorage to buy back FIH stock to take advantage of the discount.

[This2ShallPass]

If they told me BIAL doesn't IPO for another 2 years, then yes. 

 

What's the diff between getting in FFH shares and cash..just tax treatment?

[Xerxes]

I am at work tomorrow morning so will miss the FIH AGM, please please post notes / comments ... or better yet record it

[gfp]

7 minutes ago, Xerxes said:

I am at work tomorrow morning so will miss the FIH AGM, please please post notes / comments ... or better yet record it

 

What work could possibly be more important than witnessing the birth of the Ben Watsa Era of Fairfax India?!

[Xerxes]

1 hour ago, gfp said:

 

What work could possibly be more important than witnessing the birth of the Ben Watsa Era of Fairfax India?!

 

 

lol ... i was counting on FIH AGM being in the afternoon of Thursday like previous years.

Slight miscalculation 

 

 

[This2ShallPass]

What is a good time to call in if we want to listen to them talk about the investments? I assume there's other AGM business they need to take care as well..

[gfp]

6 hours ago, This2ShallPass said:

What is a good time to call in if we want to listen to them talk about the investments? I assume there's other AGM business they need to take care as well..

 

Sounds like the formal meeting is over and the rest is beginning now

 

( a great time to buy FIH.U shares since all your competition is busy LOL )

Edited April 9, 2025 by gfp

[gfp]

Q&A starting now

[This2ShallPass]

1 hour ago, gfp said:

( a great time to buy FIH.U shares since all your competition is busy LOL )

Haha..good idea.

 

I called in right before Q&A, there was a comment about buybacks. Did they announce any significant buyback?

[gfp]

Just now, This2ShallPass said:

Haha..good idea.

 

I called in right before Q&A, there was a comment about buybacks. Did they announce any significant buyback?

 

No, just more of the same

[gfp]

On Anchorage approval taking so long:

 

- It is taking an unusually long time to get this approval

- Usually the bureaucracy in India has been much more receptive

 

- Holding companies owned by foreign owners gets into a complicated area.

- Given size and nature of the asset - an asset of national importance - adds further to complications

 

- Cabinet committee of economic affairs is the committee responsible for approving this IPO - it is the apex committee of the country, headed by Modi himself

 

- This committee has on its plate: defense, tariffs, geopolitics, internal affairs, etc..  amongst this we have a little item called "IPO of Anchorage" and that is not especially high priority at the moment!  Very low on their priority list of pressing agenda items but we will get there.