Meet the man who runs Bill Gates's money
Michael Larson doesn't grant many interviews, and he certainly wasn't talking yesterday. But then again, someone who manages money for the world's richest man and the biggest charitable foundation on the planet probably doesn't need any extra attention.
Mr. Larson, 46, runs Bill Gates Investments, or BGI for short. That includes handling Mr. Gates's personal portfolio, through a company called Cascade Investment LLC, and overseeing investments for the Bill and Melinda Gates Foundation, the largest private charity in the world.
All told, Mr. Larson manages around $50-billion (U.S.), all from a small office outside Seattle identified only as "investments" by a friendly secretary. That amount will jump by at least another $30-billion in a few years once Warren Buffett finishes donating almost his entire fortune to the Gates Foundation.
By all accounts, Mr. Larson appears to be an unassuming man for such a high-powered role. According to the only significant profile of him, in Fortune magazine a couple of years ago, Mr. Larson is so low-key his business cards contain no company name and he rarely mentions his boss while talking to Wall Street investment types.
"He's a nice guy. He's a very pleasant guy. Low-key, smart, very discreet," said Ross Beaty, chairman of Vancouver-based Pan American Silver Corp., which includes Mr. Larson among its directors. "He's not by any means a yes man. If he has something to say he says it, doesn't matter whether he thinks it's going to be well received."
When asked whether Mr. Larson ever throws around Mr. Gates's name, Mr. Beaty replied firmly: "Never."
Mr. Larson was born in North Dakota. He earned a degree in economics from Claremont McKenna College in California and an MBA from the University of Chicago, all by age 21. After graduating, he moved into the investment world and landed a job with Putnam Investments in Boston, according to the profile in Fortune. Mr. Larson left Putnam after two years to form his own firm. But before he could get properly started, he received a phone call from a headhunter searching for an investment professional on behalf of Mr. Gates. Mr. Larson and Mr. Gates hit it off and before long Mr. Larson flew to Seattle to take the reins of BGI. The two keep in constant touch, but Mr. Larson is left to manage the portfolios largely as he sees fit.
According to recent securities filings, Cascade has only a handful of substantial holdings. The largest is almost 31 million shares in Canadian National Railway Co., or roughly 6 per cent of the company, worth about $1.7-billion (Canadian). Cascade is also the second-largest shareholder in Pan American Silver and holds large stakes in Republic Services Inc., Six Flags Inc. and Mexican broadcaster Grupo Televisa SA.
Four Seasons Hotels Inc. has been among Cascade's smaller holdings, accounting for just 620,450 shares, or barely 2 per cent of the firm. But yesterday, Four Seasons announced Cascade and Saudi Prince al-Waleed bin Talal are part of a group that has launched a takeover bid that values the company at $3.4-billion (U.S.). Mr. Larson was not available for comment and Four Seasons had little to say about Cascade other than to note that it first proposed the takeover back in June. It was the second major move in the past few days for Cascade. Last Friday, the firm surfaced as a partner in an electric power venture in New Mexico worth at least $700-million.
Mr. Larson's role in the Gates Foundation is less active. Mr. and Ms. Gates plan to give most of their money away and, therefore, "they have asked BGI to manage [the foundation's assets] fairly conservatively, aiming for a 5-per-cent nominal return each year," the foundation said in its latest annual report. "Since 1999, the portfolio has earned more than that goal -- an average of 8.53 per cent a year."
Many of the Gates Foundation's holdings match those of Cascade. For example, the foundation has holdings in CN, about 4.4 million shares, and Four Seasons, roughly 2 million shares, and holds stakes in Republic and Grupo Televisa.