Seth Klarman - Baupost Group Portfolio Q2’2025: Top Holdings & Recent Changes
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Seth Klarman, legendary value investor and founder of Baupost Group, continues to showcase his contrarian instincts and disciplined risk management. His Q2’2025 portfolio reflects a series of bold moves, including significant additions to technology, industrials, and healthcare, while tactically reducing exposure to select financials and materials. With $4.13 billion spread across 23 positions, Klarman’s latest filings offer a window into the mindset of one of the market’s most respected deep value investors.
Portfolio Overview: Contrarian Concentration and Tactical Shifts
Portfolio Highlights (Q2’2025): - Market Value: $4,130.0M - Top 10 Holdings: 78.7% - Portfolio Size: 23 +0 - Average Holding Period: 8 quarters - Turnover: 26.1%
Klarman’s Q2’2025 portfolio remains highly concentrated, with nearly 79% of assets in the top 10 holdings. This focus reflects his conviction in a select group of undervalued businesses, a hallmark of Baupost’s approach. The portfolio’s 26.1% turnover signals active management, with notable shifts into technology and industrials, and tactical reductions in insurance and materials.
Despite market volatility, Klarman’s discipline is evident in his average holding period of 8 quarters, underscoring a commitment to long-term value realization. The portfolio size remains steady at 23 positions, balancing concentration with diversification across sectors and geographies. Baupost’s allocation strategy continues to favor asymmetric risk-reward profiles, seeking deep value where others see uncertainty.
Top Holdings Analysis: Aggressive Tech Adds and Defensive Rotations
The portfolio’s backbone is a series of aggressive moves in technology, industrials, and healthcare. Alphabet Inc. stands out at 11.3% of assets, with Klarman adding 26.76% to the position, signaling renewed confidence in the tech giant’s long-term prospects. WESCO International 9.9% also saw a 10.07% increase, highlighting Baupost’s bullishness on industrial distribution.
A notable reduction occurred in WILLIS TOWERS WATSON PLC LTD 9.8%, where Klarman trimmed the stake by 13.86%, possibly reflecting valuation concerns or sector rotation. CRH plc received a substantial 41.98% addition, now comprising 8.5% of the portfolio, as Baupost bets on infrastructure and construction growth.
Financial technology remains a theme, with Fidelity National Information Services 7.5% up 8.5%, and Fiserv 3.7% surging 67.8%. Dollar General 7.4% was boosted by 26.7%, reflecting a defensive tilt amid economic uncertainty.
Healthcare exposure increased dramatically, with Elevance Health 5.8% up 150.41%, marking one of the quarter’s most aggressive bets. Restaurant Brands International 6.5% saw a modest 4.19% addition, while Eagle Materials 3.3% was reduced by 25.66%, suggesting profit-taking or risk management.
Rounding out the top holdings, Liberty Global 6.2% and Ferguson plc 6.0% remained unchanged, indicating steady conviction in these positions.
What the Portfolio Reveals About Current Strategy
- Contrarian Value Focus: Klarman continues to seek out-of-favor sectors and companies, adding aggressively where market pessimism creates opportunity.
- Sector Rotation: Significant moves into technology, industrials, and healthcare suggest a tactical response to macroeconomic shifts and valuation resets.
- Risk Management: Reductions in insurance and materials, alongside selective profit-taking, highlight Baupost’s disciplined approach to downside protection.
- Global Diversification: Positions in CRH plc, Liberty Global, and Ferguson plc reflect a willingness to invest beyond U.S. borders, capturing global value.
- Defensive Tilt: Additions to Dollar General and Elevance Health indicate a hedge against economic uncertainty and consumer weakness.
Portfolio Concentration Analysis
| Position | Value | % of Portfolio | Recent Change |
|---|---|---|---|
| Alphabet Inc. | $467.2M | 11.3% | Add 26.76% |
| WESCO International, Inc. | $408.8M | 9.9% | Add 10.07% |
| WILLIS TOWERS WATSON PLC LTD | $402.8M | 9.8% | Reduce 13.86% |
| CRH plc | $351.2M | 8.5% | Add 41.98% |
| Fidelity National Information Services | $308.5M | 7.5% | Add 8.50% |
| Dollar General Corporation | $305.0M | 7.4% | Add 26.70% |
| Restaurant Brands International Inc. | $268.4M | 6.5% | Add 4.19% |
| Liberty Global plc | $254.2M | 6.2% | No change |
| Ferguson plc | $246.5M | 6.0% | No change |
| Elevance Health Inc. | $239.6M | 5.8% | Add 150.41% |
Baupost’s top 10 holdings account for nearly 79% of total assets, underscoring Klarman’s preference for concentrated bets in high-conviction ideas. The table reveals a bias toward aggressive additions, especially in Alphabet, CRH, Dollar General, and Elevance Health, while only Willis Towers Watson and Eagle Materials saw notable reductions. This concentration amplifies both upside potential and risk, consistent with Klarman’s philosophy of deep research and asymmetric opportunities.
Investment Lessons from Seth Klarman
- Concentration in Conviction: Klarman demonstrates that meaningful returns often come from focusing on a handful of deeply researched ideas.
- Active Risk Management: Tactical reductions and sector rotations show the importance of adapting to changing market conditions.
- Long-Term Patience: An average holding period of 8 quarters reflects the value of patience in realizing intrinsic value.
- Contrarian Mindset: Baupost’s willingness to add aggressively in unpopular sectors is a lesson in exploiting market inefficiency.
- Global Perspective: Diversification across geographies can uncover value overlooked by domestic investors.
Looking Ahead: What Comes Next?
With $4.13 billion deployed and a steady portfolio size, Baupost retains flexibility for future moves. The significant cash reserves and recent aggressive additions suggest Klarman may continue to hunt for bargains in volatile sectors. Technology, healthcare, and industrials remain areas of focus, while defensive consumer plays like Dollar General offer downside protection. Investors should watch for new positions in undervalued global equities and further tactical shifts as macro conditions evolve.
FAQ about Seth Klarman’s Baupost Group Portfolio
Q: Why did Baupost Group add so aggressively to Alphabet and Elevance Health this quarter?
Klarman likely saw compelling valuation and long-term growth prospects in both companies, taking advantage of market pessimism to build positions at attractive prices.
Q: How concentrated is Baupost’s portfolio compared to other superinvestors?
With nearly 79% in the top 10 holdings, Baupost is more concentrated than most, reflecting Klarman’s conviction-driven approach and willingness to take outsized positions in high-confidence ideas.
Q: Does Seth Klarman’s age or succession planning affect Baupost’s strategy?
While Klarman remains actively involved, Baupost’s institutional framework and deep research bench suggest continuity in its disciplined value approach, regardless of future leadership transitions.
Q: What sectors does Baupost favor, and why?
Recent moves show a preference for technology, industrials, and healthcare, likely due to attractive valuations and defensive characteristics amid economic uncertainty.
Q: How can investors track Baupost Group’s moves in real time?
Use ValueSense’s superinvestor tracker and 13F filing analysis to monitor Baupost’s quarterly portfolio changes. Note that 13F filings have a 45-day reporting lag, so moves may not reflect the most current positions.
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