Gates and Buffett – a quick look at the BMGF “cutting the chord” linking it with Buffett

Warren Buffett is one of the most likeable, well known and greatest investors in history. He had partnered with Bill and Melinda Gates as one of three Trustees to the Bill and Melinda Gates Foundation (BMGF) with a donation of 36 billion dollars – until the Gates’ divorce.

Warren Buffett | Bill & Melinda Gates Foundation

“Through 2022, Warren’s contributions to the Gates Foundation total $36 billion valued at the time of receipt.”

Buffet made the donation with lots of strings attached – as you would expect from an astute and careful investor.

Bill & Melinda Gates Foundation - Wikipedia

Buffet resigned as Trustee in June 2021 and retains the honorific “Emeritus Trustee”:

Warren Buffett resigns as trustee of Gates Foundation (nypost.com)

Bill and Melinda Gates themselves have contributed over $59 billion to the BMGF.

Foundation Fact Sheet (At A Glance) | Bill & Melinda Gates Foundation

“Bill Gates and Melinda French Gates total giving to the foundation from inception through 2022: $59.1 billion”

So, a total of $95 billion up to end 2022.

The BMGF is made up of a foundation and a trust. The Trust holds the assets and the Foundation makes unlimited demands on it, as the Foundation deems necessary, though neither controls the other.

As an aside, I have a distrust of all foundations, based on the machinations of Clinton Foundation shenanigans and “pay to play” of overseas donors seeking treasonous political favours from a known, yet unprosecuted, traitor. As soon as Clinton was out of office, donations dropped to zero in a sure sign of “no quid pro quo = no more dough”.

Anyone heard any more of the massive tax fraud case brought against the Clinton Foundation?

Judge orders IRS to check whether it criminally investigated Clinton Foundation | Washington Examiner

(Just more evidence of the politicization of the IRS in prosecuting one side of the political fence and ignoring crimes of the other side?)

Back to the BMGF. Here are the financials of the Foundation:

f_428053e-1a_billmelindagatesfoundation_fs.pdf

Note the $67 billion asset of the “net assets of the BMGF Trust”

So, we see total assets of the Foundation of $69 billion compared to the combined $95 billion donated by Buffet and the Gates’. A difference of $26 billion has either been spent on “good causes” (like JHU and other universities, politicians, the WHO and WEF)  – other donations could also have been made of course, which would increase the amount spent on good causes.

Now for the BMGF Trust:

F_428054F-1A_BillMelindaGatesFoundationTrust_FS.pdf

There’s that $67 billion of investment assets shown in the books of the Foundation. (Level 1, 2 and 3 refer to the method of valuing the assets with publicly available prices, partially public or private pricing.

Note the 7.6 billion bucks in Berkshire Hathaway B Shares.

Let’s drill a bit deeper onto page 11 of 15 of the BMGF Trust financials:

Ten billion bucks invested in Berkshire Hathaway, not 7.6 billion in the same books for the same year! I wonder what is going on there!

I have worked with many Trustees of many pension funds over decades who raise eyebrows at more than 5% invested in a single company or investment and know that it is against “prudent person” rules to go over 10% – yet here is an investment making up 10/67 = 15% or is it 7.6/67 = 11.3%.

Maybe not such a red flag as Berkshire invests several hundred billion dollars (325 billion?) across many sectors itself, so could be viewed more as a move to sub-contract investment management of the Trust’s assets to an investment manager.

Berkshire Hathaway had a “good” pandemic in terms of performance.

Up over 60% in the last three years, so no harm no foul, right?  I wonder if Mr Buffett and (Mr Munger) have been double or tripled dosed?

Let’s go a little deeper:

From here:

Bill & Melinda Gates Foundation Trust ownership in BRK.B / Berkshire Hathaway Inc. - Class B - 13F, 13D, 13G Filings - Fintel.io

From 80 million shares held by the BMGF at end 2013, to 50 million at end of 2019 to 44 million at time of Buffett resignation as Trustee) 20 million in early March 2023.

No doubt headlines like these helped speed along the disinvestment by the BMGF.

Berkshire Hathaway stands to make $200 million from Activision share buy | Fortune

“Warren Buffett’s Berkshire Hathaway bought $1 billion of Activision shares, just weeks before Microsoft’s surprise acquisition” MSFT is largely owned by US individuals as pension fund investors in their company pension schemes, 401k plans or Target Date Funds which in turn appoint fund managers like Vanguard and Blackrock to manage these funds on an agency basis (fund maagers DO NOT own or control funds – they are owned, largely, by Americans who allow fund managers limited discretion.

Gates holds less than 1% of MSFT these days.

You can get a rough idea of the timing of the disinvestments by the BMGF from Berkshire B shares  in the table below the graph on the website.

Onwards!

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