Put in $2000, then purchased (with over $1000 dividends):
$300 for APO
$400 for ARES
$300 for BN
$500 for BX
$547.44 for OWL
$500 for HTGS
$500 for PSUS
Not much in the alternative asset managers space except that redemption of the Blackstone flagship private credit funds hit the redemption limit (news). The public market for software companies seemed to be bottoming during the last few weeks. It might help the alts to stabilize, but funds raising would take some time to re-accelerate. I still had a lot of confidence in the alts industry and I just kept buying more.
In the meantime, I started a position in a business development company (BDC) called Hercules Capital (HTGC) that has 35% of its loans exposed to the software industry. It's definitely a big contrarian bet given the market sentiment, but I saw this as a pretty attractive opportunity to invest in this internally managed BDC trading at ~12% dividend yield and around 8x P/NII (net investment income). Although it's trading at a premium to book at around 1.27x P/NAV, its exceptional return on equity at over 15% gave me a lot of comfort. Because it can engage in credit fundings which also come with warrants, the upside from the equity often is more than enough to cover any usual credit losses. I will have a writeup for this company soon.
I also started a position in Pershing Square USA, Ltd (PSUS). It's the new Bill Ackman's investment vehicle that is trading at a 20% discount of NAV. I admire Bill Ackman and I saw this as a good opportunity. It had yet to deploy the capital from the IPO, and I foresaw Bill Ackman can take advantage of the recent weakness in quality companies to earn a good return for some stock picks. I expected to invest more into PSUS if it continues to trade at a 20% discount to NAV. I published a writeup recently.
Transactions
Recent and upcoming dividend distributions
Portfolio performance snapshot
Total return:
One-year return:
Portfolio IRR (calculation): 17.98%
Approximated IRR for an SPY-only portfolio: 20.05%
Individual holdings:
Breakdown by categories (real-time):
Total returns for individual holdings:
Last prices:
Portfolio holdings conviction
The convictions in the table below reflects my current opinions and will guide the future contribution of additional investment to existing holdings. Stocks not inside the table are stocks with subpar return on equity that will be very unlikely to receive more contributions from new money (there can be exceptions for very cheap stocks). All of my writeups can be found here.
Conviction in long-term prospects means how much I believe a company would match or outperform the market (e.g. S&P 500) in the long run. Valuation matters so the conviction generally corresponds to the neutral rating of Valuation. It has the following ratings: weak, moderate, strong
Valuation: greatly overvalued, overvalued, slightly overvalued, neutral, slightly undervalued, undervalued, greatly undervalued
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