Bill Ackman Just Bought Visa, Mastercard, and S&P Global Stock. Each One Collects a Toll on Somebody Else's Sale.

Bill Ackman doesn't buy much. Pershing Square (NYSE:PS) runs one of the most concentrated portfolios in fund management (just 14 companies as of June 30), and new names show up rarely.

So a quarter in which the fund opened three positions of about $1.1 billion each is unusual. That's what Pershing Square's latest 13F filing, which landed in mid-August, revealed. The fund bought Visa (NYSE:V), Mastercard (NYSE:MA), and S&P Global (NYSE:SPGI) during the second quarter -- three stakes worth about $3.3 billion at quarter-end.

And the three purchases share one trait. Each company collects a small fee on transactions it doesn't originate, fund, or take risk on.

Together, the trio accounted for about 17% of Pershing Square's $19.5 billion U.S. stock portfolio. At quarter-end, that was a bigger allocation than any single position Ackman held, and it's the most telling thing in the filing, in my view.

Image source: Getty Images.

A $3.3 billion cluster

The sizing looks deliberate. Visa came in at about $1.1 billion, or 5.8% of the portfolio. Mastercard was about $1.1 billion, at 5.6%. And S&P Global was about $1.1 billion, or 5.4%.

The filing also shows Pershing Square sold out of Alphabet, a smaller position worth about $99 million at the end of March.

It also reported roughly a quarter fewer Amazon shares than it held three months earlier, though Amazon remains a top-five holding even after the trim. And the fund returned to Netflix with a stake of about $934 million, four years after selling its previous position.

For scale, the largest single holding in the filing, Uber Technologies, represented about 13% of the portfolio. The new trio, taken together, was bigger.

None of them takes the credit risk

Visa and Mastercard run the rails that move money between a shopper's bank and a merchant's bank, and they keep a small fee from nearly every swipe. Capturing the sheer scale of those rails, Visa processed 71.7 billion individual transactions in its fiscal third quarter (the period ended June 30), up 10% year over year, with payments volume growing 10% on a constant-dollar basis. All of that swiping converted into $11.6 billion of net revenue, up 14%, at an operating margin near 60%. And Mastercard's second-quarter gross dollar volume rose 8% on a local-currency basis to $2.9 trillion, with net revenue also up 14%.

Notably, neither company carries the loans behind those purchases. The banks that issue the cards take the credit losses. The networks collect their fee either way.

S&P Global runs the same model on different rails. When a company issues debt, it pays S&P for a credit rating -- a toll on somebody else's borrowing. S&P Global's ratings revenue rose 17% year over year in the second quarter, to $1.34 billion, with the transaction piece (fees for rating newly issued debt and bank loans) up 25%. And when investors buy index funds, the fund managers pay licensing fees, too. The company's indices revenue rose 20% during the quarter, including 22% growth in fees tied to the assets sitting in funds that track its indexes.

In other words, all three get paid on activity they don't have to create. The volume comes from everyone else.

The bet is durability, not price

The through-line, arguably, is staying power. Fee collectors like these grow with total spending, borrowing, and investing rather than with any single product cycle, and they do it with little capital at risk. A recession can slow the volumes. It's much harder to stop using the networks entirely. And the model throws off cash: Visa alone returned $6.2 billion to shareholders through buybacks and dividends last quarter.

Of course, durability like that rarely comes cheap. Visa trades within about 1% of its 52-week high as of this writing, at a forward price-to-earnings ratio of about 26.

That's a premium price for a business the market already knows is excellent, and a starting valuation like that could cap near-term returns. The same goes for Mastercard. S&P Global is the exception, trading about 20% below its own 52-week high.

Sure, none of the three is a bargain. But I don't think Ackman was hunting for bargains.

About a sixth of the portfolio ended the quarter in companies that get paid no matter which bank, borrower, or fund manager comes out ahead. After all, that fee gets collected in good markets and bad. I find it easy to see why he wanted all three at once.

Daniel Sparks and his clients do not have positions in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Mastercard, Netflix, S&P Global, and Visa. The Motley Fool recommends Uber Technologies. The Motley Fool has a disclosure policy.