I'm using Handbreak with a setting linked below. It's working for me. A quality of a converted video looks good but I have no way to compare it with the original H265 video.
https://www.reddit.com/r/PSVR/comments/6n3u8r/suggested_handbrake_settings_for_psvr_sideloading/
http://s000.tinyupload.com/?file_id=30044310178063578087
https://www.reddit.com/r/PSVR/comments/6n3u8r/suggested_handbrake_settings_for_psvr_sideloading/
http://s000.tinyupload.com/?file_id=30044310178063578087
I use Brorsoft Video Converter (pretty sure you can easily find a crack) to convert videos for PSVR and the results seem pretty good.