- Mohnish Pabrai is the principle investor and is a classic value investor in the tradition of Warren Buffett and Charlie Munger
- Pabari Funds ( PF1 through 4 ) have a combined capital of $690 Million under management
- Inception : 2000
Value Proposition :
- No Leverage / No Margin / No Short Positions
- No management fees, only performance fees. ( typical expense ratio of Pabrai funds are between 0.04% to 0.08% )
- Pabrai family is the second largest investor.
Dhandho Holdings :
- Founded in Q4 2013
- Raised $152.4 Million
- Setup as a SPAC ( Special purpose acquisition vehicle )
- Flexible vehicle – Ability to buy and hold fully owned subsidiaries for long term and portfolio of stocks
- Time limit (sunset) to invest funds raised from investors in proposed investment (Stone Trust Insurance )
- Headquartered in Porte Rico – for tax benefits
- First acquisition : Stone Trust Insurance
- Proposed date for IPO : 2015
Stone Trust Insurance – quick facts :
- Mutual insurance company with 5000+ policy holders
- Primarily into workers comp insurance
- Serving five starts in U.S in 2014 ( expected to expand to ten or fifteen stats in ten years )
- Earned $70 million in annual premium ( compared to $20 million in premiums in 2009 and $10 million in premiums 2004 )
- Expect combined ratio of 95 or lower over long term
- Dandho Holdings will infuse a capital of $30 million after acquiring Stone Trust Insurance for $35 million
Dhandho + Stone Trust Advantage :
- Dhandho’s cash surplus and backing will allow Stone Trust Insurance to grow without capital constraints.
- Boost’s Stone Trust’s credit rating from B+ to A- post acquisition
- Single investor ( Mohnish Pabrai himself ) managing investments for Stone Trust ( Clone of Buffet’s model for Berkshire )
- Environment where the focus is on under writing discipline and not growth
- Dhandho will provide a non-institutional environment, which is important for success in insurance business
Full article here http://bitsbusiness.com/investing-2/pabrai-investment-funds-annual-meeting-notes-2014/
