Presenting The World's Biggest Hedge Fund You Have Never Heard Of

Tyler Durden's picture

The world's largest hedge fund is not located in the top floor of some shiny, floor-to-ceiling glass clad skyscraper in New York, London, Hong Kong or Shanghai. It isn't in some sprawling mansion in Greenwich or Stamford which houses a state of the art trading desk behind a crocodile-filled moat. Instead it can be found in tiny, nondescript office in Suite 225 located on 730 Sandhill Road in Reno, Nevada.

"That's not possible" one may say - the world's largest hedge fund is Ray Dalio's Bridgewater, which at last check had about $100 billion in AUM (and which has so far had a less than stellar performance in 2012, underperforming the S&P by a substantial margin). Turns out it is: the fund which was at $117.2 billion as of June 30, and which has lately been growing at a pace of about $15 billion per quarter (which would put it at about $130 billion currently), is none other than Braeburn Capital, a Nevada-based asset management corporation.

Who is Braeburn?

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.

Any substantial follow up diligence on Braeburn will not reveal much if anything.

CapitalIQ has the following description of the firm: "Braeburn Capital Inc. is the asset management arm of Apple Inc. The firm invests in the public equity markets. Braeburn Capital Inc. was founded in 2006 and is based in Reno, Nevada." And that's it - there is no breakdown of which "public equity market" investments Braeburn is invested in, as is to be expected.

Bloomberg provides the following minimalist information:

Some more useful information cn be found in the Nevada Annual Report of tax-filing entities:

  • Filing Status: Active    
  • Date Filed: 10/03/2005
  • Type: Domestic Corporation    
  • File Number: E0667452005-7

It also lists the firm's principals:

Gary Wipfler
730 Sandhill Road
Suite 225
Reno, NV 89521

Gene Levoff
730 Sandhill Road
Suite 225
Reno, NV 89521

Michael Shapiro
730 Sandhill Road
Suite 225
Reno, NV 89521

The LinkedIn profile of Braeburn CIO Steve Johnson is also rather bland:

As is that of Braeburn Portfolio Manager Ted Mulvaney, who before taking over capital allocation of tens of billions worked at a fund named for a Douglas Adams planet.

Oddly enough, the only actual personnel link between Braeburn and Apple can be found in the profile of principal Gary Wipfler who just happens to be the official Treasurer, and thus as expected, the person responsible for the mega cash stash of the behemoth tech company.

For some other clues on Braeburn one has to go to the NYT, and a certain article discussing AAPL's ability to legally and quite successfully bypass American corporate tax laws.

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.

Naturally, Apple is less than eager to discuss the role of its Nevada asset manager:

Apple declined to comment on its Nevada operations. Privately, some executives said it was unfair to criticize the company for reducing its tax bill when thousands of other companies acted similarly. If Apple volunteered to pay more in taxes, it would put itself at a competitive disadvantage, they argued, and do a disservice to its shareholders.

There is much more in the NYT article, but in short, while Apple for now uses Braeburn primarily in its capacity to find legal tax loophole all around the world and avoid paying taxes, there is no denying that with a cash balance that in a two years may be well over $200 billion, applying even a modest amount of leverage would make AAPL the best capitalized bank, mutual fund or asset manager in the world.

What's more, Braeburn has no reporting obligations: there is no Investment Advisor Public Disclosure (IAPD) entry on Braeburn for the logical reason that it is not an investment advisor: it merely manages an ungodly amount of cash for AAPL's millions of shareholders. There is also no SEC filing 13-F filing on Braeburn's holdings. As such, 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.

Which is precisely what Apple wants. Incidentally, what Apple probably wants more is to keep the status quo as is. However, with the topic of finding effective tax loopholes which are perfectly legal, yet which apparently are unfair, serving as the basis of the entire presidential race to date, what Apple can be absolutely certain of is that once the farce culminating on November 6 is over, the government's eye will finally turn to minimizing "externalities" among such companies which have been able to pass through corporate tax savings to end consumers by abiding within the legal system that countless other muppet congressmen, senators and presidents have developed over the ages.

Because while AAPL may have built the iPhone, very soon it will be only fair that it share its profits acquired over the years, and thus its cash balance, which at last check was double that of the US Treasury, with the general public.

At that point Braeburn will almost certainly be a household name.

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agent default's picture

When I read the title I though the article was going to be about the FED.

Popo's picture

... and I thought the words "tax evasion" would be used more frequently.

CPL's picture

I know Ted from the universe.  He is/was a good tech and had the annoying habit of being right a lot.  lol  I can see why braeburn does well.  Ted is a sharp dude.  The rest of them are lawyers probably hovering around him collecting crumbs and attempting to understand logic and reason.  He's good people and tech.  Funny as well, has lots of war stories.

Buckaroo Banzai's picture

He worked at Ariba. That's funny.

Dr Benway's picture

So can this fund buy AAPL? I mean, that would be the logical course of action if you have CONfidence in your company. Eat your own load, so to speak.

In Australia we have companies doing just that, check out my slideshow:

hedgeless_horseman's picture



...puts on Samsung...

Funny.  Probably true, but still funny.

Oh regional Indian's picture

OT'ish but really interesting story...


India unlocks treasure trove of gold as farmers sell

Laxmibai Karanure sifts through the heavy bangles and necklaces that make up her life savings, working out which pieces to sell from the 100 grams of gold she holds to tide her family over during the drought at their farm.


The 55-year-old Karanure's heirlooms will add to a booming recycling trade, which could account for up to half of India's consumption this year and boost a fledgling refining industry.


The surge in recycling also comes as India looks set to be overtaken by China as the world's biggest consumer of gold, after a hike in import duties in March and a rapidly weakening rupee pushed local gold prices to record highs....


Interesting times indeed.


Dalago's picture

Biggest hedge fund?  Trying to dodge taxes.  There's an ap for that.  iHedge.

HedgingTexas's picture

it just got bought by SAP AG for $4.3 billion. Sounds like it was a decently-sized company. 

Buckaroo Banzai's picture

Hey CPL, why don't you tell your friend Ted to start buying gold. A LOT of gold.

And silver too, while he's at it.

CPL's picture

He's not where the buck stops, he makes sure the people with money don't buy turkey's.  

A Portfolio manager is the same as Product Manager, you are air traffic control.  Allow things in, allow things out.  It's the brains of the business.  Everything around the man can be replaced but him because he would be the Alpha and Omega of business planning.  CEO's. CIO's...worthless without brains.  

Ted would qualify for that.  He's seen a lot of bad ideas walking through the crucible of  He's got the pedigree and the training in pragmatic thought processes to make a good purchase decision.  We all, well anyone old enough, watched a lot of people get badly hurt in  Braeburn has been releasing quite a bit of information on inflationary hedges and silver/gold are part of their portfolio.

Last time I seen him had just gone Dot.bomb and everyone was getting very drunk for a couple of months trying to figure out what the fuck to do next.


Well, lets put it this way.  If given the choice on picking someone to help build a shed out of the Braeburn team, Tim is the only one qualified to identify nails, hammers and "work".  Ayn Rand was right, 1 out of 10 keeps it running.  Without Tim, Braeburn is a very small liability.

Buckaroo Banzai's picture

He's got the classic post-dotcom-bubble 2-year gap in his resume.

Just like someone else I know! (looks in mirror...)

FoxMulder's picture

I'm betting his best idea is to be long AAPL.

NewThor's picture

Better yet, he should go long the companies Apple is about to sign deals with.

Oracle of Kypseli's picture

I can't wait for the i-car and the i-house.

Come on AAPL I am giving you ideas. Built an all inclusive state of the art tech savvy box house in China and have it flown in. Provide your own mortgage and blow away all these stick built on site builders. Call me I have the basic design ready.


lunaticfringe's picture

In the new America, the one without a rule of law, this seems to be a solid idea.

monkeyboy's picture

Better yet, he should go long the companies Apple is about to sign deals with.




CPL's picture

It sucked ass but the money was good enough to start other gigs, also gave some of those looking to jump out of the industry a chance for a clean break.  

Hard to argue with interviewing someone stating their entire industry blew up because of poorly managed financial instrumentation.  Everyone got a break and at least you got to spend it with some neat people (one of the programmers I drank with expanded his musical ability, PM's turned into Handymen, etc.).  

Somehow now with the same thing happening I'm seeing some of the worst side of people now.  Media has the under tone of lazy unemployed, I see the situation as a grab bag.  There are all these senior states-people type resources with decades of experience waiting for an opportunity to shine.  Millions of solid planners and work horses.  I cannot believe the same intiatives aren't being done like dot.bomb.  Peer sessions, pink slip partied, startup's and goes.  All that.

I suppose with all the laws in place now about terrorist shit tier laws it's a moot point.  

The environment is so restricted in terms of socialization.  Little wonder people feel alone and desperate while on the dole.  I don't recall that being the case after at all.  Everyone was broke but understood that the safest place is in the nerd herd.  Companies like AMD, Apple, Microsoft and the thousands of little companies were built with next to nothing but the idea "we fucked up once, we'll do it again but without the flying everyone out to Mexico for a business retreat".  Reins were tighter and products were better suited to a practical market place.


of course it doesn't explain FB or LNKD...or the up and coming eHarmony IPO (seriously...who...what...why)....rambling

Cathartes Aura's picture

I like the Microsoft story where BillyGates is "discovered" by the .gov, and told he can become unbelievably, fabulously wealthy, BUT has to make his system so buggy the .gov snoops have a backdoor to spy on the global interwebs network. . . oh, and he has to put huge sums of that fiat into foundations to fund the vaccines & pharma for "3rd world" (you listenin' amrka?) peeps - y'know, the sweat activated vaccines, and other grand things that can be stealth sprayed no consent needed/sought.  and didn't Warren give Billy's "foundation" a billion and a half of HIS winnings?  ^^

I'm also fond of imagining SteveJobs got a similar offer, providing he assisted the equalising of China© in the race for global pwnage.

sure wouldn't be surprised to find things tank for the Corp/Core, when the time is ripe.

Jani's picture

Good thing Google didn't sell out, does no evil and stayed the most proficient SE : - )

Seer's picture

APPL was/is the last straw.  FB and others like it were just folks puking after the last party...

The reason why stuff isn't picking up is because there WON'T be sufficient demand.  People have loaded up on all they can carry (to their graves); the debt load is what kills it all, kills future growth.  And, face it, NO company is based on stasis.

This is NOT a drill...

Big Swinging Richard's picture


I worked at one of the other tech companies whose Treasury HQ are in Reno for several years.  Ted is very much a standup guy.  I also know Steve, who is no longer with the firm, having moved on earlier this year.  True that about just trying to make sure you don't screw up.  Most Treasury Mgrs. have huge career risk and don't get paid for making a few extra bps through security selection.  The IPS of the firm dictates the amount of risk taken.  Most corporate Treasurers are accountants, no PMs, so not much risk at all is taken with regards to equity exposure, mostly SPY or sub-advised acconts.

CPL's picture

Good to hear that he's still a good lad and he, LOL, definately landed on his feet.  Good for him.  Say greetings from Silicon Alley and Silicon North.

CompassionateFascist's picture

"He's good people". When you don't count the Chicom sweatshops and the "abandoned restaurant across the street". And then there's the ".com war stories". Phew. That globalist stench. 

CPL's picture

Correct me if I'm wrong but China opened up that opportuntity and since Apple isn't completely communist yet and took the OFFER to build their shitty tablet overseas to save cash.  I refuse to see that as a big deal.  It's a good thing it happened.


Don't confuse ethics with morals.  You yourself are typing on something a teenager built overseas for a salary well under minimum wage standards.  Believe me, without the ChiCom building all the crap we've got today I hardly believe most here would be able to afford a PC.  My first PC was a Commodore PET, you don't want to know what it cost.  My first mainstream PC was a Sinclair ZX81, it came in pieces and not much else.  It overheated but had a functional Basic language that introduced the markets to standard programming language because nothing like Borland or Microsoft Existed.


People took out home loans against their first PC purchases in the mid 90's when a PC, a shitty PC, would start at around 2k.  Again.  China opened the opportunity to bang your Che drum online.  like everything else in OUR lives, China makes it all.  Think the bowl of rice you eat once in a while isn't tainted by blood?  What do you think Chinese prisoners do while in jail there?  Write political essays?  No.  They make your crap cheap.


And yes, my memory of the man is he's good people. 

CompassionateFascist's picture

Actually, Not. If it were built here, it would be built better...and cost more. And people would have the actual income - instead of plastic debt - to buy the stuff. It's all a Ponzi, bright boy. And your rich friend still sux.  

CPL's picture

Oh boy...


Yes it is a Ponzi.

What would blow your mind is you'll soon get the chance to build the equipment with the Fed printing money hand over fist.  That's the plan if you hadn't noticed.  Everyone is going to switch places.  First world becomes third world, third world becomes first world.  So don't sweat the Ponzi, it's there to create jerbs for you and your sensitive needs for Americans to be abused by labour practices.

BTW Tim didn't start rich, he got rich by saving/trading/working (like most of us), his last name is Mulvaney.   He got into schools because, like the rest of us smartie pants, we studied hard and obtained grants/worked shit tier jobs to go to a good school.  Because if you don't do better than your Father in an Irish household you'll never hear the end of it.

So unless there is an Illuminati Jew Bilderburg Bavarian Vatican UFO conspiracy that includes the Irish somehow I would like to know.    Appearently I'm owed some back pay.  lol

CompassionateFascist's picture must be exceptional indeed...I've never seen an Irish male w/o a bottle in hand or mouth. And, no, the jobs are not coming back to Amerikwa. They're going to vaporize along with all other global paper-ponzi artifacts. Invest in lead.

CPL's picture

Thank christ your lead ownership goes as far as your ability to procure it in an inflationary environment.  If you thought gas was expensive, wait until you check out the price of shells.  

You can hole up in a bunker if you want.  In fact I advise you to do so immediately.  There is some really cheap property up in around the Husdons Bay area, Canuck government will even shell out a couple of bucks a month for cost of living allowance.  My plan is to stick it out in my community and do what needs to be done.  I like people I don't have to continiously be armed around and other than the church biddies, nobody is particularily interested in starting a tyranical fiefdom.  Easier hanging out with people that know how to live instead of hide.


Because that's what the survivalist movement is.  It's hiding because you don't have someone standing next to you with share the experience with.  It seems a very lonely idea.  But hey...long canned goods and shotguns it is.  I just see more value in silver, gold, seeds, a metal lathe, an anvil and a hammer.  The world doesn't stop with one piece of bad news or ten thousand pieces.  

In the 1700's while there was a Civil war happening in the infancy of the US, at that exact same moment during a very exciting piece of history there was a little boy in India that didn't know or care because he was eating supper.  I was going to go into a long post about dead cat's in boxes...

shuckster's picture

CPL, how do you like the hate fest? I bet it feels good to work your whole life and then watch it all get sucked away from you, watch your colleagues eat dirt. Did you ever consider that maybe part of the problem is all the in fighting? Everyone going after each others throats all the time?

CPL's picture

It is a question asked by philiosophers in all cultures.  What is the definition of human nature.  Socrates theory on Art is one of my favorites.  Apollo and Dyonisius.  The science being influenced by art, then in turn the science pushes art into new territories.  Conflict is human nature.  To out do the next person, to seek something more.  To cease seeking an answer, regardless of the moral abstract of what is "right", it has launched ships, built rockets and made's the reason for being.  Well, if you want to improve.  Conflict isn't a bad thing.  It's called competition when we as a society see it as moral.  Thievery when it is unjust and society deems it immoral.

The infighting is part of the process to dispose of what works and what doesn't.  I would hate to be on a engineering team that didn't argue about functional, operational and safety issues on a product.  My job is to make sure you as the end consumer get the safest, functional product the team and I work on in a reasonably priced manner.  The fact it's made in China or the US only is decided by one single factor.  Cost.  China opened it's doors and offered space.  Apple doesn't magically obtain space, they have to go through the same crap every other Chinese business does...including bribing the shit out of people/municipality, hiring the retarded nephew of the local mayor, all of it.  Just like the US.  People scream murder when China throws a tariff on goods, or the municipal blood money needs to show up.  Do the same thing in somewhere like California where the tax laws changed...well, people leave.

There is a point where the conflict just drives people away.  The US suffers the same issues as Ethopia.  Displaced communities.  Name a city in the US without a tent city?  How did that happen?  Certainly wasn't a lack of moral fibre, the law books are full of ridiculous laws on the subject.  Taxes?  nope...lots of those too.  Four levels of them:  Fed, State, County, Municipality...and if you are lucky enough to live in on municipality.


On conflict.  To a passive eye a field is nothing but a field.  Maybe a back ground to a pleasant stroll.  Perhaps it inspires a painting, a photo and poem.  Maybe it is the cause of self reflection.  The field is just a field.  It is very pretty.

To a biologist however, they see conflict in the field.  Plants pushing and shoving each other fighting for sunlight and resources.  Bugs at war continiuously.  Animals acting as the apex to eat the bugs.  

We are no different, our motivations of resource gathering are similar.  The mechanical process, resources and perhaps scale (that is debatable though, there is a fungus the size of california in california and oregon and Washington state.)...that's where we differ from ants, birds.  We have to build stuff with resources, to obtain resources to distribute resources.  Obviously the hot topic is oil with some whispering of food being on the radar soon because of poor growing conditions the world over.


With 7.2 billion of us the idea that there won't be a conflict to provide scarce resources is lunacy.  This isn't a battle you get to sit out either and watch on TV, it has already happened and will continue to happen until there are less hands than resources available.  

Sucks, but the human race reboots itself constantly.  I cannot name a single historical year there was not someone trying to kill another of our species for something minor.  Again motivations of survival.  The out with the loser and in with the winner.  Deserving has nothing to do with it either.  Again morals are a construct, Tito was appalled by women that smoked and drank, yet somehow he had no issue slaughtering his fellow country men.  It is the darkest of humour. 

Cabreado's picture

So much intelligence, so much understanding...

so much drivel...

And so much efficiency in exposing yourself:

"Again morals are a construct"

Isn't it interesting how the cycle continues, with no one acknowledging even an inkling of responsibility?

CPL's picture

Responsibility falls under ethics.  Ethics defines the ownership of a problem.


Morals seek an outcome to ethics.


It is moral to stone a woman death in Islam for slandering and cheating on her husband.

Is it ethical to do so?

CompassionateFascist's picture

A question only a Talmudist would ask. 

shuckster's picture

Well, you might be a philosopher, but I'm not. I'm 27 years old and I still have enough life left ahead of me to not just give it up to sit around pondering the universe. You talk about living in the eye of the tornado and working with some of the titans of the industry, so i assumed you were bitter about losing it. i'm bitter already and i don't haven't lost anything - i had nothing in the first place. the only thing i ever had was the money i saved up as marine before going to college. then i went and the money's gone and now i'm done and there aren't shit for jobs and because i'm white i'm not eligible for help. not that i want it. i'd rather go hungry than have to go to wal mart and congregate with the degenerate class. the people who feed off the largesse of those who are too dignified to do so. one thing i know for sure though, is that the answer isn't sitting around wondering what right and wrong are. fucking shit needs to start getting broken. i like what i see in greece. i like when i see a video of a bunch of guys going to all the immigrants' goodie stands and trashing the fucking thing and telling the immigrants to get the fuck out. it might be wrong, it might be mean, or whatever the fuck, but maybe it's time to start being mean

CPL's picture

No, I gained.  I did very well.  I kept my "not drinking the koolaid" hat on and did well enough to be comfortable and share what I have with family, friends and community.  I am not even 50 yet. was fun, war stories about CEO's naked on beaches eating sand tripping balls and some other weirdness.  Mostly it was just about building things and it was one hell of a dog fight.

The Titans I know then, weren't Titans, just young guys in hock for student debt like every other genX kid and they have ideas and friends, which is better than money sometimes.  I'd see them at conferences and swap tech tips.  Go for a couple of drinks.  IT as an industry is still very small and it's really busy.  You take the time you can, when you can take time you end up working on the next project that will consume 70 hours a week.  Had no clue what anyone did after  Mulvaney included.  The startups he worked for were my clue.


However, for yourself, you want a career, or at least a place to learn from old men...Oil is the place for you.  The Oil Sands that is.

They are looking for everyone.  If you drive a truck.  Weld.  Mining mining experience want to learn.  Good money, relocation expenses, room/board and nowhere to spend it because you'll be in the middle of bum fuck nowhere.  Which is not that bad of a thing.


Nage42's picture

CPL, I'm reading this thread and it resonates with my experiences, so some big +1s


It's a trueism that if you want to succeed you don't have to be god's own genious, you've just got to be willing to do more than the fucktards around you.  In today's world, that means getting off your ass and going to a country that is trying to bootstrap itself into competition with the 1st world, or into a job field that is outside the comfort zone of most people (most are not willing to leave their hometown).

Ditto on the oil path, same goes for mineral/mining exploration, some fairly rough conditions but full costs covered, nowhere to spend your money, and PHAT bonus at the end, no better way to build bank to bootstrap yourself from biblebelt fucktard to expat elite right quick.

It is competition, you just have to be willing to work harder or suffer through more shit than the next guy, it's all on you, stop bitching and get'er done -- complaining that the "immigrant worker" who is succeeding because he's working harder than you is just you LOSING = you're _choosing_ to lose.

Am I right CPL, is that the nub of the matter?





post turtle saver's picture

"In order to find his equal, an Irishman is forced to talk to God."

CompassionateFascist's picture

In order to find his equal, an Irishman drains a bottle...then breaks it over someone's head. 

Seer's picture

"What would blow your mind is you'll soon get the chance to build the equipment with the Fed printing money hand over fist.  That's the plan if you hadn't noticed.  Everyone is going to switch places. "

Glad to see someone else getting this...

It'll be packaged up as "bringing jobs home," or other such BS.  And with it will be all sorts of subsidies, er a, "tax breaks" to help fund this corporate shift.

I suspect that things will get hotter over in China and that will be one reason why western corporations will suddenly find themselves as being patriotic (not that I give a crap, as I don't buy any of that nationalistic crap).

BTW - What passes for "smart" today is going to be pretty much worthless tomorrow.

CPL's picture

The mad hatter would be proud of the tea party setup.  

Dali would have to accessorize the situation with a giraffe.

The Financial situation today is Puce.

CPL's picture

CompassionateFascist, all the information you need to know about the IT industry is right here in black and white.  Bookmark it for special occassions.

A Nanny Moose's picture

I like to Kirsten Dunst version better. But that's just me.

buckethead's picture

That was disturbing...


CPL's picture

It's the best description of IT to date.  Best layout ever.

Heyoka Bianco's picture

The good old Zed X. I remember the "Shut Down" mode was simply pulling the plug, and how much fun it was just to make a little sprite man dance.

Cabreado's picture

"Funny as well, has lots of war stories."

The funniest thing about the Ted's... is that they have no clue how they contribute to the real wars -- wars of all kinds, and we are losing them all...

If you consider that to be a stretch,

just wait for the punch line.