Seth Klarman’s Baupost Shifts Strategy in 2023: Exits $125M Amazon Stake, Boosts Dollar General Holdings

Key Highlights

• Baupost Group divested its $125 million Amazon stake in Q3 2023, per U.S. regulatory filings.
• New investments were made in Tower Semiconductor and Clarivate during the same period.
• Alphabet remains a core holding within Baupost’s diversified portfolio.

Renowned hedge fund manager Seth Klarman’s Baupost Group shifted focus away from Amazon Inc. (AMZN) in the third quarter of 2023, opting to concentrate on infrastructure and analytics sectors instead.

According to the latest 13F filing for the quarter ending September 30, Baupost exited its 963,000-share Amazon position valued at $125 million. The firm initially acquired Amazon shares in Q1 before tech stocks surged, exited, then re-entered in Q2, before finally divesting in Q3.

During the same quarter, Baupost initiated new stakes in Tower Semiconductor (TSEM) and Jacobs Engineering (J), while adjusting holdings in discount retail and building materials companies.

Strategic New Investments in Analytics, Construction, and Engineering

Israel-based Tower Semiconductor, despite a 38% year-to-date decline, saw a 4% rise recently. Baupost invested approximately $70 million for a 2.85 million-share position in Q3 2023.

The fund also placed a $150 million bet by acquiring 22.5 million shares in London-based analytics firm Clarivate (CLVT), alongside purchasing nearly 488,000 shares in Texas-based Jacobs Solutions.

Portfolio Adjustments and Key Holdings

By the end of Q3 2023, Baupost held positions in 32 stocks, with top stakes in Liberty Global PLC (LBYTB), Veritiv Corp (VRTV), and Alphabet Inc (GOOG).

The fund increased its holding in Willis Towers Watson PLC (WTW) by 653,300 shares, totaling 1.56 million shares valued at $325 million. Additionally, Baupost added 685,000 shares in Dollar General Corp (DG), worth approximately $98 million.

The largest portfolio addition was in CRH PLC (CRH), with roughly 3.3 million shares purchased for $183 million, representing 3.5% of Baupost's portfolio.

Reductions were made in Qorvo Inc (QRVO) by 1.68 million shares, Garrett Motion Inc (GTX) by about 20 million shares, and Union Pacific Corp. (UNP) with a 175,000-share liquidation.

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