Cascade Investment

Cascade Investment, L.L.C. is the private investment vehicle and family office for Bill Gates. Created in 1995, it serves as the primary manager of Gates's vast personal wealth, operating completely separately from the philanthropic endeavors of the Bill & Melinda Gates Foundation. Think of it as the engine room of the Gates fortune. While the Foundation gives money away to solve global problems, Cascade's sole mission is to grow that fortune through savvy, long-term investing. The firm is famously secretive, but its strategy, masterminded for decades by the legendary Chief Investment Officer Michael Larson, offers a masterclass in wealth preservation and growth. Cascade's approach is a testament to the power of diversification and patience, spreading its capital across a wide array of assets including public equities, private equity, real estate, energy, and venture capital, making it a powerful and influential force in global markets.

You can't talk about Cascade without talking about Michael Larson. Hired by Bill Gates in 1994 to diversify his wealth beyond Microsoft stock, Larson is the architect of Cascade's success. He is often called the “mystery man” or “the man who runs Bill Gates's money” due to his intensely private, under-the-radar persona. He rarely gives interviews and operates far from the spotlight of Wall Street. Larson's investment philosophy is the bedrock of Cascade's strategy and aligns beautifully with the principles of value investing. His core tenets are:

• Extreme Diversification: Larson's primary mandate was to reduce the risk of having the entire Gates fortune tied up in a single stock. He has since built a portfolio that spans dozens of industries and asset classes worldwide.
• Risk Management: He is known for being deeply risk-averse, using sophisticated hedging strategies to protect the portfolio from market downturns. His goal isn't just to make money, but to not lose it.
• Long-Term Focus: Cascade doesn't chase fleeting trends. It buys and holds high-quality assets for years, and sometimes decades, allowing the power of compounding to work its magic.

Under Larson's steady hand, the Gates fortune has grown exponentially, even as Bill Gates has funneled billions into his foundation.

While the exact portfolio is private, public filings reveal many of Cascade's largest holdings, painting a picture of a firm that favors stable, industry-leading companies with strong competitive advantages.

Cascade's public stock portfolio is a “who's who” of blue-chip, wide-moat businesses. These are typically not flashy tech stocks but the workhorses of the global economy. Key holdings have historically included:

• Industrial and Infrastructure: Major stakes in companies like Canadian National Railway, the backbone of North American logistics, and Deere & Company, the iconic agricultural machinery giant.
• Essential Services: Investments in firms like Waste Management, Inc., the leader in trash collection and recycling, and Ecolab, which provides essential water and hygiene technologies.

These companies share common traits: they are leaders in their respective fields, generate consistent cash flow, and are difficult for competitors to disrupt—the very definition of an economic moat.

A significant portion of Cascade's assets are in private markets, where it can exert more influence and hold for the very long term.

• Hospitality: Cascade is the majority owner of the ultra-luxury Four Seasons Hotels and Resorts, a premier brand with a global footprint.
• Land and Agriculture: It is also one of the largest private owners of farmland in the United States. This is a classic long-term investment in a tangible, productive asset that acts as a hedge against inflation.

While you can't hire Michael Larson, you can absolutely steal his playbook. The principles that guide Cascade are universal and can be applied to any portfolio, no matter its size.

The single most important lesson from Cascade is to avoid concentrating your wealth in one place, whether it's a single stock (even a great one like Microsoft) or a single industry. Spreading your investments across different asset classes (stocks, bonds, real estate) and sectors is your best defense against unexpected shocks.

Cascade's success is built on patience, not timing the market. They buy wonderful businesses and let them grow. For the average investor, this means tuning out the daily market noise, resisting the urge to trade frequently, and focusing on the long-term health of the businesses you own.

Cascade doesn't speculate; it invests. It seeks out high-quality companies with durable competitive advantages and buys them with the intent to hold. Your takeaway: Do your homework. Focus on businesses you understand, that have a strong position in their market, and that are built to last.