A relative unknown in the financial world has served as Bill Gates‘s banker for more than two decades. His name is Michael Larson. Sources say that Larson has nurtured gates fortune from a mere $5 billion in 1994 to more than $82 billion today, producing a greater than 11% annual return during the period.
Michael Larson is a graduate of Claremont McKenna College, and worked for a mergers-and-acquisitions firm and ran bond funds for Putnam Investments before striking out on his own as a money manager. He decided to “drop off the radar” after being hired by Gates.
Statements on Michael Larson from Bill Gates
According to a September 19th article in the Wall Street Journal by Anupreeta Das and Craig Karmin , during a recent party celebrating Michael Larson’s two decades of employment, Gates waxed eloquent in saying Larson has his “complete trust and faith.”
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“Melinda and I are free to pursue our vision of a healthier and better-educated world because of what Michael has done” for the past 20 years, sources say Gates told around 40 dinner guests. In his prepared remarks, Gates went so far to say he sleeps well at night because of Larson.
Larson has complete autonomy
Michael Larson runs Bill Gates financial empire through a firm called Cascade Investment LLC. The entire operation is highly secretive and the two plan to keep it that way. In most cases, investments, such as the Charles Hotel in Cambridge, Mass. and 490-acre ranch in Wyoming, are set up under the ownership of firms with nondescript names so the deals can’t be traced directly back to Gates.
According to the WSJ article, Cascade’s headquarters are in an unassuming, unnamed building in the Seattle suburb of Kirkland. Sources note that Michael Larson has the reputation of being so protective of his boss that he was nicknamed “the Gateskeeper.” Employees who leave are typically required confidentiality agreements barring them from talking about Cascade in order to collect severance and bnefits, people with knowledge of the matter say.
As well as Cascade, which represents the majority of Gates’s personal fortune, Larson also manages the Bill & Melinda Gates Foundation‘s $41 billion endowment.
Details on Gates assets
The WSJ article put together an overview of Gates’s investments from interviews with many people familiar with Cascade, securities filings that detail some pf the holdings as well as real-estate records. Almost none of Cascade’s investments or divestments have been publicly announced.
The Wyoming ranch purchase seems to be another part of a bet by Cascade on a rebound in real-estate prices since the financial crisis. Records show cascade owns at least 100,000 acres of farmland in California, Illinois, Iowa, Louisiana and several other states.
The WSJ sources also indicates that Cascade also owns more than $24 billion of shares in companies such as Canadian National Railway (NYSE:CNI) (TSE:CNR), AutoNation, Inc. (NYSE:AN), and Republic Services, Inc. (NYSE:RSG). It’s obvious that most of the equity assets are selected using Larson’s value-conscious, buy-and-hold philosophy.
Michael Larson has also put a significant amount of Gates’s fortune into private equity and other types alternative assets, according to the sources. Gates exposure to the bond markets is relatively small at the current time.