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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CPL's picture


So by the existence a portfolio manager in a successful Ponzi is the bane of humanity?  

I could name about a hundred other things that need to be fixed before something as worthless as fiat needs to be considered saved.  

There's my deck for one, it needs another coat of stain and the rain just won't let up.  Then I have to paint the bedroom and show my middle brats how to patch a hole in the wall when they start kicking the crap out of each other.  Need to install the new faucet sitting on top of the fridge that's been there for a month with my wife acting as it's continious advocate to introduce the paradigm of stylish faucet when the old faucet is just fine...I got a list.  There's your punch line.  Change and shit happens.



Cabreado's picture

"the bane of humanity?"

The bane of humanity is the Self-Absorbed -- the Narcissist and the Sociopath.

They share common outward behavior, particularly when challenged...

when their illusion is in jeopardy, they tend to spew nonsensical, irrelevant info...
always about themselves.

Perhaps you've noticed a pattern.


CPL's picture

Touche.  So what have you done today Cabreado?

max2205's picture

Follow the money. Nice job.

Think they roll it back into AAPL?

CPL's picture

Probably, industry 500 are all buying back their own shares as a defensive measure while being given a boat load of cash by the Fed.


But that has changed with QE3.  A trader never chases a price.  If you chase a price you run out of bread fast.  Then there is a external pressures to the company purchasing their own stocks.  Customers.


If your customers are broke and you've spent all your money on your own stock, but not just your company, every company has done the same thing and you run out of customers because inflation destroys their capital faster than you can make a product.  

Well, then you have to start selling your own equities to stay alive.  Business management on that level is just as much about putting your competitor in a rat hole to waste their time and energy as it is about bringing something to market.

Again, all companies are doing it.  

QE3 painted them all into a corner.  Not a single industry is going to look the same in a year if they flatline on operating costs and have to start eating their own equities.  More than likely create another bubble in corporate loans like the 80's.  This has all happened before and it will happen again...maybe.  Just won't be with USD as a reserve currency and nations will just simply vanish with QE4 being discussed.

I see it as the Central Banks are printing our freedom, because the more of it printed, the less serious it becomes for the everyday schmoe that's back stopped themselves with physical silver and gold.  Then we've got oil price/availability....LOL...that's going to the be the vicious pitbull that finishes off nations.  Energy supplies should concern people more than Apple.

NewThor's picture


TIME = MONEY = warp speed Printing Presses = the value of time - (x)

Dr Benway's picture

Yeah but there's a big difference between buying your own stock and retiring it (ie share buyback), and just buying it and keeping it around.

Both actions increase the share price, but in the case of the share buyback retiring of shares leaves more assets per share.

This leads to very different aftereffects when money to buy your own stock runs out. After a share buyback, the higher price per share is backed by higher assets per share. But if shares haven't been retired, the higher share price is vapor, and when supportbuying stops the price must crash.

shuckster's picture

Indeed, it's a gimmic. And companies like Apple need to get out of the stock trading business and back into the phone making business because their phones are going to shit at an unprecedented rate. Cook is a fucking weasel 

unununium's picture

> every company has done the same thing

No company is doing it in quite as grand a style as AutoZone.  Yet another quarter where the buyback was 20% more than net income and book value sank 12% deeper into negative territory.

Seer's picture

Very well stated.  "No customers" is bad for business...

If it wasn't QE3 it would have been something else.  The grim reaper can wear many costumes, but come it always will.

It was all pretty grand, wasn't it?  We were king of the hill!  Silly humans, back to the ground you go! (physical human labor returns)

seek's picture

The correct term here is tax avoidance. Which is legal. Tax evasion is illegal.

I have little doubt in the next year or two tax code will be re-written to make sure only banks with large donations to the two parties will be able to legally avoid taxes, while producers of any sort will need to provide more to the unproductive classes, as they didn't build that.

Davilis's picture

Just follow the example of GE and become a bank.  Done.

shuckster's picture

Romney's only crime is being obvious about avoiding taxes. GE does it like a pro

Harbanger's picture

I bet Harry Reid is in on this tax scam.

shuckster's picture

I bet Harry Reid fucks little boys in the ass for pleasure. Because he's a fucking Jew backed Mormon freak. Quick question. What does a Jew love more than a dollar? A Ni&&er of course! Or is it the other way around? Angry yet?

If I were Romney and they started asking for my tax returns, I'd say fuck off. It's my fucking money, keep your dirty chicken wing eating, Jerry Springer watching fingers off of it! Every dollar your pay to the government goes to some jungle bunny sitting on a fucking porch with 12 kids. That money does not go to building rail roads or high ways. It keeps a bunch of nigz fat and happy, parking in the Blue Handicap spot at Walmart in their fucking Tahoes (which they bought on subsidy with YOUR money)

mkkby's picture

All of which IS NOT CHARITY. It's the cheapest way to keep society safe from them.

What do you do with millions of sub 85 IQ uneducated, unemployable inner city gangsters?  You can't effectively police them.  You can't put them in concentration camps... yet.  If you let them starve, they'll just use their guns to rampage around.  So you give them a basic living.

Say thanks to China for financing our debt and getting all these services for free.  No, your children will not pay for it.  The debt will be defaulted eventually Greece style.

Harbanger's picture

PS- Not deducting all of the money Romney gave to charity on his tax returns isn't exactly "avoiding taxes."  But Dingy Harry outright lied and said he has information that Romney hasn't paid any taxes and the liberal MSM gives him a pass.

True.North's picture

Thought this was going to be a new shop setup by Jon Corzine, Brian Sack and the remnants of JPM's CIO division. It's only a matter of time...

Antifaschistische's picture

Id love to know how Braburn may or may not be involved in the ramping of AAPL share prices. Anyone know the techniques they may be using to help AAPL price?

CPL's picture

Buying shares in a vapour driven market place.


Seriously.  If you wanted to manipulate a stock price right now outside of the fortune 500, the other 30K+ of listed equities have no buyers and no sellers.  it would cost money though.

Prerequistes are:

Find a shit tier 2-5 buck stock.

Three trade accounts in three different firms.

Each account has it's role.

  • Account 1:  Your bull "trader" (Bait)
  • Account 2:  Your Pivot "trader" (Wedge)
  • Account 3:  Your money maker. (Short)


Take 10k and divide it like so:

Bull Trader:  2k

Pivot:  100 block of something to act as the anchor.  Fix the price to your "buy", whatever that is.

Money:  Think or Swim allows you to reserve short sale blocks for the big day.  7k


Buy 100 blocks upwards over a couple or days, gather share for future short.  Dump the bait, short the sale when it reaches your are done.  This is a miniature and in reverse of the current scheme which involves throwing SS down a big hole..

CPL's picture

Model it first.


Eclipse Trader has some algo plugin's to mess around with to get a sense of timing, use live feed quotes (lots of free one's built in) and trade from three platforms to "see" the reaction.  Or join one of the trading clubs...Tim Sykes has his Juggernaut up and running.  It's very impressive what he's done with 3 grand.  I think he's up to 6 million himself and the rest of his cronies are doing better than he is.  He's one of the sharpest guys I know of doing the trader club thing.

koncaswatch's picture

Wow! Haven't seen actual trade talk in awhile; some good thinking CPL


CompassionateFascist's picture

I confess to underestimating CentralProcessingLeech. He (and his friends) are truly Evil.

CPL's picture

Yes, you've found the Overlord Reptilian conspirators website, here we wring our hands and plot of nefarious plots to hamstring humanity.


So Jesus walks into hotel and puts three nails on the counter,

The clerk walks over and looks at the nails and looks at Jesus,

Jesus leans over and says "Can you put me up for the night".


Oh Lucifier the Morning Star take me now....or are you not one of those loons?  

I could pour on the juice about how I plot of ways to procure capital by the sinister plot of "work".  It requires labour though, not sure if you are interested that.

Cosimo de Medici's picture

You're a welcome breath of fresh air in the loo at a trucker's rest stop on a Nevada Interstate.

Dr Benway's picture

May I propose a couple of minor tweaks:


Time the ramping to coincide with some minor piece of positive news, say an annual report with less horrible results than expected, and/or time the shorting to coincide with dividend payouts. Also, it's easier if you, or someone you know, already hold a sizeable proportion of the outstanding shares and daily volume is low.


Wanna see some nice Aussie ramps? Check out NHC, SBR, PMV, MOC. But the entire Aussie market has become a joke. Every afternoon the market flatlines.

seek's picture

I don't think I'd necessarily call stealing funds from the mouths of HFT algos evil. Robinhood-esq, perhaps.

True.North's picture

They hired Steve Perkins and got him drunk. He promptly acquired 69% of the company between the hours of 1am and 3am.

slaughterer's picture

Braeburn is good, very good.  That is why they need to die, to be sacrificed.  ZH got that right.  

jekyll island's picture

I wonder if they are going to buy gold?   

sadmamapatriot's picture

Where the hell isMichael? He has not posted since September18th and he is a multi-post a day guy.

Peter Pan's picture

When I read the title I thought it was going to be about the Bilderberg Group.

Haus-Targaryen's picture

So APPL has been successful, and abides within the law . . . clearly they aren't paying enough . . . 



Tyler Durden's picture

You obviously are not familiar with the "Fairness Doctrine"

Bay of Pigs's picture

"abides within the law"?

LOL. What fucking law?


Buckaroo Banzai's picture

The best law that money can buy, that's what fucking law.

sessinpo's picture

In other words, some are jealous they haven't found and manipulated this looghole for themselves.


And it gets worse. I'll give you a heads up because you are so far behind. If you think this subsidariary can manipulate Apple's stock, which I don't disagree with, what is to stop said subsidariary from attacking Apple's competitors and vice versa.

NewThor's picture

Regulation = the mirage of Law at the oasis



sessinpo's picture

Yep, which supports my libertarian view.

I would prefer less government involvement as a whole, however, I think most of us agree that government can serve a purpose in curtailing and prosecuting criminal activity. IThe biggest kicker to my desire for smaller less powerful government is that it is government that creates these regulations, these loopholes that everyone is so angry about. Thus government is the problem but instead of blaming them and making government accountable, the majority just let it go and keep bitchin without doing something about it.


Yea, Yes we can

Manthong's picture

"its cash balance, which at last check was double that of the US Treasury"

Is this a great country or what?

Sam Clemons's picture

I thought our treasury was quite in the hole and therefore even I have more of a cash balance.

Seer's picture

Double your NOTHING! :-)  See how easy it is?  In the virtual world we can make up whatever we want; it's kind of like Alice Through The Looking Glass!