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Cascade Asset Management

Asset management firm owned by Bill Gates and managed by Michael Larson. The firm manages the portfolios of the Bill Gates and Melinda Gates Foundation and other connected entities. It invests in sectors such as hospitality, rail transport, retail, waste
Cascade Asset Management
Leadership team

Bill Gates  (Chairman)

Michael Larson (CIO)

Melinda Gates (co-founder)

Number of Employees
100 - 500
Headquarters
Kirkland, Washington, United States
Established
1994
Social Media
Summary

BMGI (Bill and Melinda Gates Investments) is the private family investment office of Bill and Melinda Gates. It manages the assets of Cascade Investments, which is the primary investment vehicle for the Gates family. Cascade Investments handles both private investments and the management of the family's charitable activities through the Bill and Melinda Gates Foundation Trust endowment.

BMGI and Cascade Investments engage in a diverse range of investment activities across various asset classes. These include global public equities, venture capital, private equity, hedge fund strategies, and investments in fund managers. The investments are made in different sectors and geographies based on the investment preferences and strategies of BMGI and Cascade Investments.

In terms of investor types, BMGI and Cascade Investments encompass a mix of categories such as venture capital, private equity, a single-family office, multi-family office, debt/credit fund, listed equity, pension and sovereign funds, diversified asset managers, fund of funds, hedge funds, corporate investors, and impact funds.

The investment size typically ranges between $25 million and $50 million per deal, although they may go beyond these limits for exceptional opportunities. As of their last reported statistics, BMGI and Cascade Investments manage assets worth $60 billion USD and have a team of three members.


History

Cascade Investments was established in 1994 as a private investment firm. It served as the successor company to Dominion Income Management, which was previously responsible for managing the holdings of Bill Gates. Cascade Investments is headquartered in Kirkland, Washington, United States.

In the early years, Cascade Investments focused on managing Gates's substantial wealth and diversifying his investment portfolio beyond his Microsoft shares. The company has been instrumental in allocating Gates's resources to various asset classes and investment opportunities.

Under the leadership of Michael Larson, who has been the Chief Investment Officer of Cascade Investments, the firm has followed a fundamental, long-term investment approach across different sectors and geographies. Larson's investment strategies have resulted in impressive returns, with an average annual compound return of 11% over a period of twenty years from 1995 to 2014.

Over time, Cascade Investments has expanded its portfolio holdings and diversified into various sectors, including technology, consumer goods, healthcare services, financial services, industrials, media and entertainment, property, infrastructure, resource extraction, agriculture, and more.

Cascade Investment, L.L.C. is a private investment firm and holding company headquartered in Kirkland, Washington, United States. It is primarily controlled by Bill Gates, the co-founder of Microsoft, and is managed by Michael Larson. Cascade Investment serves as the successor company to Dominion Income Management, which was previously responsible for managing Gates's holdings and was operated by Andrew Evans, a convicted felon.

In addition to farmland, Cascade has managed Gates's stake in Canadian National Railway since 2013, which has been one of the investment firm's significant holdings. However, in 2022, Cascade sold stocks worth $940 million, reducing Gates's stake in the company to 1.4 percent. While Cascade manages the assets of the Trust, which funds the Bill & Melinda Gates Foundation, neither Cascade nor the Trust are involved in the grantmaking or operations of the foundation. The foundation's work is separate from the investment activities of Cascade. 


Investment criteria

Cascade Investments follows a set of investment criteria and principles when evaluating potential investment opportunities. While the specific details may vary depending on the circumstances, here are some key factors that Cascade Investments typically considers:

  • Long-Term Perspective: Cascade Investments takes a long-term approach to investing and seeks opportunities with the potential for sustained growth and value creation over time. This perspective aligns with the company's commitment to fundamental analysis and patient capital allocation.
  • Fundamental Analysis: Cascade Investments conducts an in-depth fundamental analysis to assess the financial performance, competitive positioning, and growth prospects of potential investments. This involves evaluating factors such as market dynamics, industry trends, business models, management quality, and financial stability.
  • Diversification: Cascade Investments believes in maintaining a well-diversified portfolio across different asset classes, sectors, and geographies. Diversification helps mitigate risks and capture opportunities across various market conditions.
  • Alignment with Values and Objectives: Cascade Investments seeks investments that align with the values and long-term objectives of the Gates family. This includes considering investments that have a positive societal impact, such as those related to healthcare, education, sustainability, and technology-driven innovation.
  • Experienced Management: The management team behind a potential investment is a critical factor in Cascade's evaluation process. They look for experienced, capable, and visionary leadership that demonstrates a track record of successful execution and value creation.
  • Competitive Advantage: Cascade Investments assesses the competitive advantage of a company or investment opportunity. They seek businesses with strong market positions, unique intellectual property, innovative products or services, and barriers to entry that can sustain long-term profitability.
  • Risk Assessment and Mitigation: Cascade Investments evaluates risks associated with potential investments, including market risks, regulatory risks, operational risks, and financial risks. They aim to identify potential challenges and develop strategies to mitigate them effectively.
  • Financial Performance: Cascade Investments examines the historical financial performance and projected growth potential of a company. They assess key financial metrics, including revenue growth, profitability, cash flow generation, and return on investment.
  • Synergies and Strategic Fit: Cascade Investments considers the strategic fit and potential synergies with existing portfolio holdings. Investments that complement or enhance the overall portfolio strategy may be given greater consideration.

Values

Cascade Investments operates based on a set of core values that guide its investment philosophy and decision-making process. These values reflect the principles and beliefs held by the company and its leadership. While specific details of Cascade Investments' values are not publicly disclosed, the following are general principles that are commonly associated with the firm:

  • Long-Term Focus: Cascade Investments emphasizes a long-term perspective in its investment approach. It seeks investments that have the potential for sustainable growth and value creation over an extended period, rather than pursuing short-term gains.
  • Integrity and Ethics: Integrity and ethical conduct are fundamental to Cascade Investments' operations. The company is committed to upholding the highest standards of professional and personal integrity in all aspects of its business, including dealings with partners, stakeholders, and portfolio companies.
  • Responsible Stewardship: Cascade Investments recognizes the importance of responsible stewardship of the assets it manages. The company strives to make informed investment decisions that consider the long-term interests of its stakeholders, including investors, employees, and the broader community.
  • Social Impact: Cascade Investments values investments that have a positive social impact. It may seek opportunities that align with its mission to support initiatives related to healthcare, education, sustainability, and technology-driven innovation, among other areas.
  • Sustainability: Environmental and social sustainability is an important consideration for Cascade Investments. The company may evaluate investments based on their alignment with sustainable practices, responsible resource management, and mitigating negative environmental impacts.
  • Collaboration and Partnership: Cascade Investments recognizes the value of collaboration and seeks to build strong partnerships with like-minded individuals, organizations, and businesses. It may actively engage with portfolio companies and other stakeholders to foster long-term relationships and drive mutual success.
  • Prudent Risk Management: Cascade Investments prioritizes prudent risk management in its investment decisions. The company conducts thorough due diligence and risk assessment to identify potential risks and develop strategies for risk mitigation.
  • Commitment to Excellence: Cascade Investments strives for excellence in all aspects of its operations. It seeks to maintain a high level of professionalism, expertise, and diligence in evaluating investment opportunities and managing its portfolio.

Mission

Cascade Investments does not publicly disclose its mission statement. However, based on its investment activities and the principles it operates upon, we can infer a broad mission for the firm. The following statement captures the essence of Cascade Investments' mission:

"Cascade Investments seeks to generate sustainable long-term growth and value by strategically allocating capital to investments that align with its core values, provide strong financial returns, and have a positive impact on society."


Portfolio

Based on the latest quarterly 13F-HR filing of Cascade Investment Advisors, here is an overview of their portfolio holdings as of March 2023:

  • Apple (AAPL): Cascade Investment Advisors holds approximately 3.6 million shares of Apple, valued at around $4.5 million. This represents 1.6% of their stock portfolio.
  • Microsoft Corporation (MSFT): Cascade Investment Advisors has approximately 2.7 million shares of Microsoft, with a value of about $3.4 million. The position increased by 3% compared to the previous filing.
  • US Bancorp Del Com New (USB): Cascade Investment Advisors holds around 63,000 shares of US Bancorp, valued at approximately $2.3 million.
  • Novartis Sponsored ADR (NVS): Cascade Investment Advisors has approximately 23,000 shares of Novartis, with a value of around $2.1 million.
  • Applied Materials (AMAT): Cascade Investment Advisors holds around 17,000 shares of Applied Materials, valued at approximately $2.1 million. The position decreased by 3% compared to the previous filing.
  • Jabil Circuit (JBL): Cascade Investment Advisors holds approximately 24,000 shares of Jabil Circuit, with a value of around $2.1 million. The position decreased by 26% compared to the previous filing.
  • Microchip Technology (MCHP): Cascade Investment Advisors holds approximately 24,000 shares of Microchip Technology, valued at around $2.0 million.
  • Regeneron Pharmaceuticals (REGN): Cascade Investment Advisors has approximately 2,300 shares of Regeneron Pharmaceuticals, with a value of around $1.9 million.
  • Paccar (PCAR): Cascade Investment Advisors holds around 25,000 shares of Paccar, valued at approximately $1.8 million. The position increased by 50% compared to the previous filing.
  • Alphabet Inc Cap Stk Cl A (GOOGL): Cascade Investment Advisors holds approximately 18,000 shares of Alphabet Inc, with a value of around $1.8 million. The position increased by 12% compared to the previous filing.

These are just some of the top holdings in Cascade Investment Advisors' portfolio, representing a portion of their overall holdings. It's important to note that the portfolio composition can change over time as positions are adjusted or new investments are made.


References
Cascade Asset Management
Leadership team

Bill Gates  (Chairman)

Michael Larson (CIO)

Melinda Gates (co-founder)

Number of Employees
100 - 500
Headquarters
Kirkland, Washington, United States
Established
1994
Social Media