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From the article: My view has long been that the essential skill of a hedge fund manager is not picking the right stocks, but rather continuing to run a hedg

From the article: My view has long been that the essential skill of a hedge fund manager is not picking the right stocks, but rather continuing to run a hedge fund: Picking the right stocks is a good way to keep running a hedge fund, but it is not the only one, and locking up capital permanently is in some ways even better. But that is even more true for outside investors: They are looking to own a company for the long term, and they can’t be sure that you will always pick the right stocks. But if they’re sure that your capital can’t leave, that helps. This predictability — of assets and fees — is not the only thing to Pershing Square’s pitch. There’s also the cost structure.

asdasdsddd 2y ago
I'm referring to this part of the article > That's cheap! It’s cheap in the sense that you can run Pershing Square with a relatively small staff; you only need so many analysts to pick 12 stocks. It’s also cheap in the sense that you can scale up easily: If PSUS really does raise $25 billion of new money, it will just put that money into the same 12 stocks. It won’t take any more analytical work (they’ve already picked the stocks), and it probably won’t be that expensive (these are liquid large-cap stocks so the trades have more capacity). Charging 2% management fees on a low-turnover portfolio of large liquid public stocks seems like a better business model than charging 2% and picking new stocks each day. This is non sensical since most of the work they do is convincing board members to enact their changes and figuring out how to fix the company. Its obvious that Matt Levine thinks they just pick stocks and sleep
- intuitionist 2y ago
  Ackman’s done a lot less (public) activism over the last few years than he used to. Other than Canadian Pacific I don’t think he’s launched a proxy fight at any of his current portfolio companies, and the CP thing was over a decade ago. He’s certainly heavily involved at Howard Hughes and RBI, but it’s pretty much impossible to go activist on Google. Also, I don’t know why it would take a lot more people to talk to the company boards than to be passive investors?
  - asdasdsddd 2y ago
    I just think it's weird to frame the article around this stuff when Ackman's claim to fame has nothing to do picking stocks. It would be like writing an article on Jane Street's 13f holdings.

asdasdsddd 2y ago

I'm referring to this part of the article > That's cheap! It’s cheap in the sense that you can run Pershing Square with a relatively small staff; you only need so many analysts to pick 12 stocks. It’s also cheap in the sense that you can scale up easily: If PSUS really does raise $25 billion of new money, it will just put that money into the same 12 stocks. It won’t take any more analytical work (they’ve already picked the stocks), and it probably won’t be that expensive (these are liquid large-cap stocks so the trades have more capacity). Charging 2% management fees on a low-turnover portfolio of large liquid public stocks seems like a better business model than charging 2% and picking new stocks each day. This is non sensical since most of the work they do is convincing board members to enact their changes and figuring out how to fix the company. Its obvious that Matt Levine thinks they just pick stocks and sleep

intuitionist 2y ago
Ackman’s done a lot less (public) activism over the last few years than he used to. Other than Canadian Pacific I don’t think he’s launched a proxy fight at any of his current portfolio companies, and the CP thing was over a decade ago. He’s certainly heavily involved at Howard Hughes and RBI, but it’s pretty much impossible to go activist on Google. Also, I don’t know why it would take a lot more people to talk to the company boards than to be passive investors?
- asdasdsddd 2y ago
  I just think it's weird to frame the article around this stuff when Ackman's claim to fame has nothing to do picking stocks. It would be like writing an article on Jane Street's 13f holdings.