Apple has a cash hoard that is worth more than one hundred and ten billion dollars, but that money doesn’t just sit in a bank collecting interest. Apple invests it, using a Nevada-based asset management corporation called Braeburn Capital. And it might just be the world’s largest hedge fund.
Braeburn was founded in 2006 to help Apple deal with its cash problem, which at the time was only a comparatively paltry $10 billion. Six years later, it’s $117 billion, and growing every day. That beats the assets being managed by Ray Dalio’s Bridgewater, which only has $100 billion.
Despite the fact that Braeburn is so massive, though, little is known about it. The firm’s principals are all Apple men, including Apple’s VP & Treasurer Gary Wipfler. The Braeburn offices are located in Reno, Nevada, which allows Apple to shield those assets from tax officers in California. And Braeburn is a business in its own right: it’s made Apple more than $2.5 billion in interest and dividend income in the last six years.
The most interesting things about Braeburn, as pointed out by Zero Hedge, is that in two years, when Apple’s cash hoard grows to over $200 billion, it’s possible that Braeburn could make Apple “the best capitalized bank, mutual fund or asset manager in the world.”
Despite all of this, though, Braeburn doesn’t have to report much of its activities, since it is by its very nature a private investing fund, which means that it also doesn’t have a lot of the same prohibitions placed upon what kind of assets it can hold as other funds.
Zerohedge puts this into perspective:
Braeburn is not confied by the limitations of being a “long-only”, it is in its full right to hold any assets it feels like, up to and including CDS on housing, puts on Samsung, or Constant Maturity Swaps that pay if the 10 Year collapses. It just doesn’t have to report any of them.
Nobody knows: and that’s the beauty of Braeburn. It is the world’s largest hedge fund that is not really a hedge fund, nobody has heard of, and nobody knows just what assets it holds.
Head on over to Zerohedge for more; it’s a fascinating read even for finance laymen about one of the most mysterious businesses Apple takes part in.Related