Salient to Investors:

  • Armen Karamanian at Admire Capital said you can replicate Bill Ackman’s portfolio very easily and for free and with immediate liquidity without the headline risk, and Ackman’s focus on a small number of large investments makes Pershing Square easier to replicate. Karamanian said the public hedge funds’ target buyers are European money managers, probably wealth managers, allocating capital for individuals who invest outside the US and are not wealthy enough to buy into the hedge funds directly or get exposure to activists.
  • Bill Ackman said the first day rise in the stock price of an activist target often represents only a small percentage of the ultimate increase achieved by a successful activist – in 26 out of 30 of his activist commitments the day-after price was still a bargain price versus the ultimate price achieved from our involvement with a company.
  • Hedge Fund Research said hedge funds globally charged an average management fee of 1.52% in Q2 2014 and an average incentive fee of 17.96%. Since inception in 2004, Ackman’s Pershing Square LP’s gross return was 1,199.1% but 626.7% net of all fees.
  • Ken Squire at 13D Activist Fund said Ackman’s public stock allows another whole part of the investment world to get access to activism.
  • Chris Donegan at Azure Wealth said public hedge funds provide certainty of capital and for investors a higher degree of transparency and benefits from the manager’s ability to take measured actions without regard to redemption periods. The hedge fund manager likes no panic redemptions or providing liquidity to the market.

Read the full article at http://www.bloomberg.com/news/2014-09-22/you-too-can-clone-bill-ackman-without-buying-his-new-fund.html

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