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Thursday, August 27, 2026

Late August 2026 Random Ramblings

Higher rates could compress equity multiples and raise AI data center lease costs, while UWMC and Cogent raise questions about CEO-driven capital allocation.

UWMC $2.3B
Yet Another Value Podcast 14 clicks

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@marginofdanger 2 clicks

marginofdanger on X

I pasted two screenshots from $PS's 424B4. If you look at fee paying AUM, it's $16 bn excl HHH which has a de minimis mgmt fee/carry. Add in $PSUS and you are at $21 bn of fee paying AUM. $PS discloses pro forma mgmt fees of $238 mm but that is net of $91 mm of non-cash amort related to the IPO. So I'm going to give them credit for $329 mm of mgmt fees. Assuming a 65% operating margin and a 20% tax rate, that gives me effective fee paying earnings of $171 mm. $PSH.LN has a 16% incentive fee and $PS is entitled to the performance fees on the first 5% (the team gets beyond that). On $15 bn, this is $15 bn * 5% * 16% = $120 mm or $96 mm after tax. Add up the mgmt fee and performance fee share, and I get $267 mm of expected earnings or $0.67/share. Implies $PS is trading at around ~50x EPS vs. $KKR at 17x, $ARES at 20x, $BX at 21x. Of course you can layer in some minor $HHH economics and it takes down the multiple a couple of turns. But you could also layer in a few years of sub 5% returns and that takes away the performance fee too. Certainly a 50x EPS valuation is pretty common for a fast growing higher ROIC biz. But it's by no means cheap. The question is, how will Ackman raise any money from here? $PSH.LN is at a discount to NAV, $PSUS is at a discount to NAV and $HHH is at a discount to NAV. One thing that will allow $PS to grow into its valuation is great results as that will 1) scale up the earnings (as it's based on % of AUM) and 2) facilitate new investors. Another way to contextualize the valuation is to simply look at fee paying AUM of $21 bn and compare that to the equity value of $13 bn. That is pretty unprecedented in the land of asset managers but reflects in part the permanent capital and the limited float (I think its just the 20mm shares given in the IPO). Could easily see a lot of price pressure once the 380mm non-IPO related investors are free to sell.

Investor Letters

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NCLH or her grandma Saga?

Norwegian Cruise Line’s $15 billion debt and 2026-27 capex delay deleveraging, despite fuel-efficient new ships and stronger projected 2028…

NCLH $7.7B
The Oak Bloke 16 clicks

Late August 2026 Random Ramblings

Higher rates threaten equity multiples and AI data-center economics, while UWMC and Cogent raise questions about CEO-driven capital…

UWMC $2.3B
Yet Another Value Blog 2 clicks
RGLD · long 2026-05-29

Royal Gold INC

Royal Gold, a $19 billion precious-metals royalty and streaming company, benefits from mine production without operating mines directly.

RGLD $22B
Value Investors Club 1 click
CC · long 2026-05-29

the chemours inc.

Chemours (CC) is presented as a long investment in its three-segment specialty chemicals business.

CC $2.4B
Value Investors Club 1 click
HGV · long 2026-05-29

Hilton Grand Vacations

Hilton Grand Vacations faces an inflection point in profitability growth and free cash flow generation.

HGV $3.4B
Value Investors Club 1 click
NEXPF · long 2026-05-29

Nexi SpA

Nexi, continental Europe’s largest merchant acquirer, is presented as a long investment using normalized EPS and EBIT that exclude…

NEXPF $6.1B
Value Investors Club

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