Seth Klarman - Baupost Group Portfolio
Seth Klarman - Baupost Group Q3 2024 Portfolio
Baupost Group, a hedge fund managed by Seth Klarman, disclosed 20 security holdings in their SEC 13F filing for the third quarter of 2024, with a total portfolio value of $3,503,742,000
Seth Klarman’s Baupost Group Q3 2024 top 10 portfolio holdings
LBTYK – Liberty Global Ltd CL C
Portfolio Allocation: 26.1%
Recent Activity: No change reported
Shares Held: 42,311,011
Reported Price: $21.61 per share
Value at Reported Price: $914,341,000
Liberty Global Ltd CL C is the largest holding in Klarman’s portfolio, making up over a quarter of the total allocation. Liberty Global is a leading telecommunications and cable company with a presence in multiple markets. This substantial position reflects Klarman’s confidence in Liberty Global’s ability to generate long-term value through its broadband and media assets.
WTW – Willis Towers Watson plc
Portfolio Allocation: 14.97%
Recent Activity: Added 7.78%
Shares Held: 1,781,206
Reported Price: $294.53 per share
Value at Reported Price: $524,619,000
Willis Towers Watson, a global advisory and insurance brokerage firm, is a significant position in Baupost’s portfolio. The increase in shares indicates Klarman’s growing confidence in the company’s potential to thrive in the risk management and consulting sector, benefiting from corporate demand for insurance and advisory services.
CLVT – Clarivate Plc
Portfolio Allocation: 7.89%
Recent Activity: No change reported
Shares Held: 38,929,635
Reported Price: $7.10 per share
Value at Reported Price: $276,400,000
Clarivate, a company specializing in analytics and intellectual property services, remains an important holding. This position reflects Baupost’s interest in data and analytics services, with Clarivate providing tools that are essential for research-intensive industries, including pharmaceuticals and academia.
GOOG – Alphabet Inc. CL C
Portfolio Allocation: 6.99%
Recent Activity: Added 37.02%
Shares Held: 1,465,588
Reported Price: $167.19 per share
Value at Reported Price: $245,032,000
Alphabet’s Class C shares were significantly increased, indicating Klarman’s confidence in the technology giant. Alphabet’s dominance in digital advertising, combined with its investments in cloud computing and AI, aligns well with Baupost’s focus on growth-driven, high-value tech companies.
CRH – CRH plc
Portfolio Allocation: 6.98%
Recent Activity: Reduced 37.62%
Shares Held: 2,636,602
Reported Price: $92.74 per share
Value at Reported Price: $244,518,000
CRH, a major player in building materials, saw a notable reduction in shares. This move could indicate profit-taking or a strategic reallocation within the portfolio. CRH’s strong position in infrastructure and construction materials offers stability and exposure to infrastructure spending globally.
WCC – WESCO International Inc.
Portfolio Allocation: 6.03%
Recent Activity: Added 56.66%
Shares Held: 1,258,000
Reported Price: $167.98 per share
Value at Reported Price: $211,319,000
WESCO International, a provider of electrical and industrial supplies, received a significant boost in allocation. The increase suggests Klarman’s belief in the company’s growth potential, driven by demand for electrical components and supply chain solutions across industries.
DG – Dollar General
Portfolio Allocation: 5.56%
Recent Activity: New Buy
Shares Held: 2,303,800
Reported Price: $84.57 per share
Value at Reported Price: $194,832,000
Dollar General, a prominent discount retailer, is a new addition to the portfolio. This investment may reflect Klarman’s interest in the consumer staples sector, which tends to perform well in economic downturns, offering affordable products to a broad customer base.
LBTYA – Liberty Global Ltd CL A
Portfolio Allocation: 4.33%
Recent Activity: No change reported
Shares Held: 7,194,276
Reported Price: $21.11 per share
Value at Reported Price: $151,871,000
Liberty Global’s Class A shares further solidify Klarman’s commitment to this telecommunications company. The dual holding in both Class A and Class C shares demonstrates a high-conviction bet on Liberty Global’s potential in the evolving telecom landscape.
VSAT – Viasat Inc.
Portfolio Allocation: 4.17%
Recent Activity: Reduced 11.17%
Shares Held: 12,222,590
Reported Price: $11.94 per share
Value at Reported Price: $145,938,000
Viasat, a satellite communications company, saw a slight reduction in shares. Viasat’s focus on satellite broadband aligns with Klarman’s interest in technology and communications, though the reduction may suggest some caution amid market conditions.
EXP – Eagle Materials Inc.
Portfolio Allocation: 4.11%
Recent Activity: Added 46.24%
Shares Held: 500,273
Reported Price: $287.65 per share
Value at Reported Price: $143,904,000
Eagle Materials, a supplier of building materials such as cement and gypsum, was significantly increased. This addition suggests Klarman’s interest in infrastructure and construction-related industries, which may benefit from ongoing development and spending in the U.S. construction sector.
Analysis of Seth Klarman’s Q3 2024 Portfolio Strategy
1. High-Conviction Position in Liberty Global
Liberty Global remains the largest holding in Klarman’s portfolio, with both Class A and Class C shares making up a significant portion. This concentrated position reflects a strong belief in the company’s long-term value within the telecommunications industry.
2. Strategic Additions in Key Sectors
The increased positions in Willis Towers Watson, Alphabet, WESCO International, and Eagle Materials highlight a focus on diverse growth sectors, from insurance and advisory services to technology, industrial supplies, and building materials. These additions indicate a balanced approach to growth and stability.
3. Defensive Positioning in Consumer Staples
The new position in Dollar General suggests an interest in consumer staples, a sector that can offer resilience during economic slowdowns. This aligns with Klarman’s value-oriented approach, positioning the portfolio to withstand potential market downturns.
Conclusion
Seth Klarman’s Q3 2024 portfolio for Baupost Group demonstrates a high-conviction, value-driven strategy with substantial investments in Liberty Global, complemented by strategic positions in technology, industrials, and consumer staples. The portfolio reflects a blend of growth and stability, positioning Baupost Group to capitalize on both economic resilience and industry-specific growth opportunities.
Who is Seth Klarman ?
1957:
Born on May 21, 1957, in New York City, USA.
1979:
Graduates from Cornell University with a degree in economics.
1979-1981:
Works as an analyst at the Mutual Shares fund.
1982:
Founding of Baupost Group: After working at several financial firms, Klarman founded Baupost Group with just $27 million in assets under management.
1991:
Publication of “Margin of Safety”: Seth Klarman authored a book titled “Margin of Safety: Risk-Averse Value Investing Strategies for the Thoughtful Investor.” The book is highly regarded among value investors and became a sought-after, rare collector’s item due to its limited print run.
1995:
Klarman Becomes chair of Facing History and Ourselves, an educational organization that promotes tolerance and understanding.
2008:
Klarman is selected as lead editor of the sixth edition of Security Analysis, a seminal work on value investing by Benjamin Graham and David Dodd.
2008 Financial Crisis:
During the 2008 financial crisis, Baupost Group performed exceptionally well, achieving positive returns while many other funds suffered significant losses.
2011:
Klarman receives the Alumni Achievement Award from Harvard Business School.
2020:
Klarman is elected to the American Academy of Arts and Sciences.
Interesting Facts
Klarman is known for his deep value investing approach, focusing on undervalued assets, distressed securities, and special situations.
He values privacy and operates with a conservative approach in managing Baupost Group.
Seth Klarman is actively involved in philanthropy, supporting various causes and organizations, including education, medical research, and social services.
Klarman is often compared to value investing legends such as Warren Buffett and Benjamin Graham.
Seth Klarman's Investing Principles
The single greatest edge an investor can have is a long-term orientation
Over the long run, the crowd is always wrong
Value investing requires a great deal of hard work, unusually strict discipline, and a long-term investment horizon
Once you adopt a value-investment strategy, any other investment behavior starts to seem like gambling
Investing is the intersection of economics and psychology
The stock market is the story of cycles and of the human behavior that is responsible for overreactions in both directions