Ackman Bets Big on Fee-Collecting Giants Visa, Mastercard, S&P Global

Pershing Square, led by Bill Ackman, recently disclosed new stakes in Visa, Mastercard, and S&P Global. The fund bought approximately $1.1 billion worth of each company's stock, with a total value of about $3.3 billion at the end of the second quarter.

The three purchases share a common trait: each company collects fees on transactions they don't originate or take risk on. Visa processed 71.7 billion transactions last quarter, up 10% year over year, and Mastercard's gross dollar volume rose 8% in the same period.

S&P Global runs a similar model by collecting credit rating fees from companies when they issue debt, as well as licensing fees from index fund managers. The company's ratings revenue rose 17% year over year in the second quarter, with transaction fees up 25%. Ackman's bet on these companies may be based on their durability and ability to grow with total spending, borrowing, and investing.