With over $100 billion in the bank, Apple is one of the most profitable entities on the planet. And lest you think that the money is just whittling away in a savings account, think again.
Though it’s not well known, Apple owns the largest hedge fund in the world. Located at 730 Sandhill Road in Reno, Nevada, Bareburn Capital helps manage Apple’s assets.
Braeburn is a subsidiary of another far more famous company, which since 2006 has had one simple task: manage the cash of the parent company.
At Braeburn’s inception, the cash pile was modest, yet absolutely massive in unlevered terms, at just over $10 billion. Fast forward 6 years, and the massive cash pile has now grown to be epically gargantuan. Of course, the parent company in question is none other than Apple, whose publicly reported cash horde at June 30, 2012 was a whopping $117,221,000,000. This is the AUM of Braeburn.
The report goes on to note that there really isn’t much else known about Bareburn. It is interesting though that portfolio manager Ted Mulvaney had previously worked at Apple from 2005 through 2007 as a Project Manager.
Also of note is that Bareburn employs Gary Wipfler, whose LinkedIn lays out that he’s a Treasurer at Apple.
The New York Times profiled Bareburn a few months back and wrote:
In 2006, as Apple’s bank accounts and stock price were rising, company executives came here to Reno and established a subsidiary named Braeburn Capital to manage and invest the company’s cash. Braeburn is a variety of apple that is simultaneously sweet and tart.
Today, Braeburn’s offices are down a narrow hallway inside a bland building that sits across from an abandoned restaurant. Inside, there are posters of candy-colored iPods and a large Apple insignia, as well as a handful of desks and computer terminals.
When someone in the United States buys an iPhone, iPad or other Apple product, a portion of the profits from that sale is often deposited into accounts controlled by Braeburn, and then invested in stocks, bonds or other financial instruments, say company executives. Then, when those investments turn a profit, some of it is shielded from tax authorities in California by virtue of Braeburn’s Nevada address.
Since founding Braeburn, Apple has earned more than $2.5 billion in interest and dividend income on its cash reserves and investments around the globe.