Bill Gates concentrates 81% of his $48 billion portfolio in four key companies (REUTERS)
Bill Gates He is known worldwide for his role as co-founder of Microsoft and for his philanthropic commitment, but he also stands out as a strategic investor. Through the Bill and Melinda Gates Foundationmanaged to concentrate a large part of his fortune in a select group of companies that reflect both his business vision and his focus on sustainability and technology. Today, 81% of its USD 48 billion portfolio is invested in only four companiesshowing its confidence in certain key sectors.
Despite having investments in more than two dozen companies, four companies concentrate the majority of the investments in the company’s portfolio Bill and Melinda Gates Foundation. Microsoft, Berkshire Hathaway, Waste Management y Canadian National Railway represent the 81% of the total shares. This highly concentrated strategy suggests a preference for established companies with resilient business models, strong dividends and long-term competitive advantages. Gates’ focus appears to be maximizing financial impact to continue nurturing his philanthropic commitment, while ensuring consistent returns through leading companies in their respective sectors.
He 30% of the Foundation’s portfolio is invested in Microsoftthe company that Gates co-founded in 1975. Although Gates stepped down as director of the company in 2000, he remains confident in the growth and evolution of Microsoft. This company transcended its origin as a software manufacturer, expanding into areas such as cloud and the artificial intelligence (AI). Microsoft is currently the second largest cloud infrastructure provider, with its platform Azure at the forefront. Additionally, its AI integration, such as with its digital assistant Copilotis seen as a potential source of income, with analysts projecting an increase of USD 143 billion by 2027 only through these AI-related services.
The company also offers an attractive yield through its dividends, which it has paid consistently since 2004, increasing in value every year since 2011. Despite a 0.8% dividend yield, capital gains increased sharply, with growth share price increase of 202% in the last five years.
Gates trusts Microsoft’s evolution towards the cloud and AI (REUTERS)
Berkshire Hathawaythe company led by the legendary investor Warren Buffett, occupies 23% of Gate’s portfolios. The relationship between Gates and Buffett is not only financial, but also philanthropic. Buffett donated more than USD 43 billion to the Gates Foundation, including USD 5.3 billion in Berkshire shares in 2023.
Berkshire is a strategic investment for Gates as it provides immediate diversification due to the numerous businesses and holdings it owns. Additionally, it generates billions in dividend income annually and maintains a robust liquidity fund of USD 277,000 million. The combination of solid diversification and Buffett’s legendary management ensures that this holding remains a centerpiece of Gates’ investment strategy.
Waste management may not seem like an exciting industry, but Waste Management is a perfect example of a company with pricing power and a recurring revenue stream. This 15% stake in Gates’ portfolio is valued at about USD 7.2 billion. The company is dedicated to garbage collection, recovery and recycling of materials such as glass, paper, metal and plastics, which is driving its expansion towards more sustainable energy sources.
Waste Management proved to be a solid investment, with revenue growth of 5.5% in the second quarter of 2023 and adjusted EBITDA growth of 10%. Added to this is a constant dividend policy since 1998, with 21 consecutive years of payment increaseswhich adds value for long-term investors.
Waste Management is valued at about USD 7.2 billion within Gates’ portfolio (REUTERS)
Railroads are another sector that both Gates and Buffett consider essential pfor the global economy. The Gates Foundation has a stake in 13% in Canadian National Railwaya unique company for being the only transcontinental railway network in North America, connecting the Atlantic coast, the Pacific and the Gulf of Mexico.
Rail transport is more energy efficient than trucks, emitting 75% less greenhouse gasesmaking it a more economical and ecological option for transporting goods. Canadian National has maintained a strong track record of dividend payments since going public in 1995, with a current yield of 2.2% and a strong ability to continue growing its payouts.
