Bill Gates loves trash
A big $28bn bet on a dirty future
Well, not Bill Gates per se, but his family office, Cascade. And not trash in the metaphorical sense of very speculative assets but actual, honest-to-God trash. Or trash management at least.
Oxford University’s Martin Schmaltz has drawn our attention to the somewhat weird allocations of Gates’s private investment firm, which, depending on your source, seems to manage either $70bn, $120bn or $170bn.
Here’s what Refinitiv lists as Cascade’s 10 biggest position in dollar terms.
The combined $16bn holdings of Republic Services and Waste Management — the two biggest waste disposal companies in the US — make up almost half of Cascade’s disclosed equity portfolio.
If you include water purification and pest control giant Ecolab as kinda in the same business (getting rid of unwanted stuff, whether germs, garbage or bedbugs) then the sector accounts for 52.5 per cent of Cascade’s public book, or $21.1bn in total.
That’s not all! The actual Bill & Melinda Gates Foundation — which owns Gates’s remaining Microsoft shares — owns another $5.6bn stake in Waste Management, $703mn in Ecolab and $290mn in Waste Connections, a different trash disposal company. So that’s $27.69bn in total for the sector.
Some caveats are in order. All these holdings are mostly from filings made in 2021-22, so there may be some changes (but neither Cascade nor the Foundation are high turnover investors). There will be other stuff that doesn’t need to be disclosed, so this will never be more than a partial snapshot. Cascade also owns most of the Four Seasons Hotels and Resorts, for example.
Still, it’s an interesting portfolio. It basically looks like a massive near-$28bn bet on a grimy future where sanitation will be the in-demand service. Mad Max, but with even more garbage.
Cascade has been managed by Michael Larson since 1994. He’s kept remarkably under the radar, with the exception of a 1999 article in Fortune, and a less flattering NYT piece in 2021 on the “culture of fear at the firm that manages Bill Gates’s fortune”.
The other top Cascade holdings are also a bit bizarre for a technology billionaire’s family office. Agricultural machinery company John Deere and Diageo make up the rest of the top five, while further down we find Canada’s national railway system; car seller AutoNation; Spanish construction company FCC; Otter Tail, a Minnesota utility, and Ginkgo Bioworks, a biotech SPAC.
Last one excepted it’s all very old-economy, which appears to be the long-term strategy. Gates’s biggest UK investments, for example, have been in retailer Carpetright, jet servicing group Signature Aviation and Bunzl, a distributor of disposable cutlery. Given the still-big chunk of Microsoft shares sitting in the Foundation’s books, perhaps low-tech is the point?