Bill and Melinda Gates Investments, the 100-person team managed by Michael Larson that oversees their personal fortune and the endowment of their eponymous foundation, changed its name to Cascade Asset Management Co. on Monday, according to a spokesperson.
Michael Larson has discreetly moved around one of the world’s largest fortunes for over three decades, with one goal in mind: keep his fantastically rich bosses out of the limelight.
The cautious investments, the inconspicuous office, and the investing firm’s generic-sounding name were all deliberately crafted to insulate Bill and Melinda French Gates from criticism and provide consistent, though seeming, profits.
The couple’s divorce was announced last month, shattering the carefully cultivated picture. Unflattering information emerged, including a claim that Larson had harassed and intimidated several of his coworkers.
Bill and Melinda Gates Investments, the 100-person team managed by Larson that oversees their personal fortune and the endowment of their eponymous foundation, changed its name to Cascade Asset Management Co. on Monday, according to a spokesperson. Cascade Investment, which has historically been the component of BMGI that handles the Gateses’ personal money, has a similar title.
The makeover is the next chapter in the narrative of what will happen to one of the world’s most valuable fortunes when Bill and Melinda Gates divorce. Larson was engaged to manage the money of a Microsoft millionaire in the mid-1990s.
According to financial documents and others familiar with the subject, the huge portfolio under his control, estimated to be worth around $170 billion by Bloomberg News, has outperformed the larger stock market by approximately a percentage point over the years.
The track record exemplifies the objectives of the ultrarich’s upper echelon, where investment horizons span decades and riskier risks seldom exceed the value of a good name. Larson’s role included assisting Bill Gates in maintaining his image as a kooky millionaire dedicated to solving the world’s problems rather than making risky actions that may grab attention.
“Some of these men are prepared to pay a hefty price to keep out of the headlines,” Tayyab Mohamed, co-founder of family office recruiting agency Agreus Group, said. The divorce, as well as recent disclosures concerning Cascade’s working culture, which were revealed by the New York Times, raise doubts about Larson’s future plans and the wealth he manages. BMGI is altering its name “to account for the shifting requirements of the Gates family and their charitable activities,” according to a Cascade spokesperson, adding that the group’s investment strategy and organisational structure would remain unchanged.
French Gates, whose name was added to BMGI in 2014, has been in the spotlight after Cascade transferred stock interests worth more than $3 billion to her, causing some in the industry to assume she’s trying to assert even more authority over her part of the wealth. According to the Bloomberg Billionaires Index, their total wealth exceeds $140 billion.
Larson, 61, has confessed to using strong language on occasion, as reported by the New York Times, but he has denied mistreating employees. According to a Cascade spokesman, the issues were investigated and did not merit his firing. Gates’ spokesperson did not reply to a request for comment.
Given his decades-long relationship with Gates and the loyalty it has undoubtedly generated, Mohamed said it’s not surprising that Larson has stayed in his position despite the claims. “Had Larson not had the professional influence he had, it would have been a straightforward yes, he should leave,” said Mohamed, whose firm assists family offices in hiring executives.
Larson, who wears a pink shirt most of the time, avoids the spotlight and only attends a few conferences for family office workers. According to sources acquainted with Cascade who requested not to be identified, he gained Gates’ devotion by producing regular returns and instilled in workers the sense that their major goal was to safeguard their benefactor’s good name.
Gates gave the manager a lot of flexibility when it came to investing decisions, according to both of them. French According to one of the persons acquainted with Cascade’s early days, Gates seldom attended meetings aside from the yearly in-person event, and when she did, she tended to be a passive participant.
Her spokesperson, Courtney Wade, claimed she was ignorant of most of the claims concerning Larson “given her lack of ownership of and management of BMGI.” It’s unknown where French Gates is stashing her cash, including the more than $3 billion she received from Cascade, or whether she’s forming her own family office. She also heads Pivotal Ventures, a gender and racial equality-focused investment and incubation business that employs over 90 people and was formed in 2015.
Being the investment head for one of the world’s wealthiest families may appear to be a dream position for a speculative investor. Fundraising, customer withdrawals, and onerous laws aren’t a concern. However, it frequently entails merely maintaining a stable level of wealth. Larson’s major objective, apart from diverting attention away from the Gateses, has been to invest prudently.
According to Raphael Amit, professor of management at the University of Pennsylvania’s Wharton School, this represents the usual investing practises of large family offices and foundations. “The primary goal is capital preservation,” he added, noting that this is why family office portfolios are so varied, encompassing not only public stocks but also fixed income, commodities, and assets like art.
Larson said that much of his technique boiled down to offsetting the fluctuations in Microsoft shares in a Fortune piece from two decades ago. Bonds dominated the foundation’s and Gates’ personal portfolios at the time, with some investments on private equity, commodities, Florida real estate, and British hotels thrown in for good measure.
According to the Property Report, Cascade also controls about 270,000 acres of land, making it the single largest owner of agriculture in the United States. The company has also dabbled in currency and commodities trading, venture finance, and the construction of a downtown Tampa property complex.