Altarock Partners Portfolio: Analyzing Their Risk Strategies

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Jacob Wolinsky
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Altarock is a company revolving around two great investment minds – Mark Massey and Scott Bradford. They both have a solid investment background, both earning their MBA at Havard. Before founding Altarock Massey worked in The Baupost Group, while Bradford gathered experience in Fiduciary Management Associates. Altarock Partners’ portfolio is concentrated in eight holdings valued at $4.78 billion.

The biggest holding is the TransDigm Group Inc, and in the second place is Microsoft. Amazon and Alphabet also have significant stakes in Altarock’s portfolio. Latest trades include increases in Moody’s and Charter Communication holdings and decreases in Microsoft, Visa, TransDigm, and Alphabet holdings.

They managed to keep high returns from the inception, and it seems that their strategy doesn’t have a flaw. To better understand their approach to investing, stay with us.

Key Holdings

  • TransDigm Group Inc (NYSE:TDG) with 30.16% of the portfolio

Altarock has been trading TransDigm shares since 2014 and now they own 1.24 million shares. Their holding is valued at $1.48 billion, while they invested in it $499 million. This holding has brought a 196% gain so far. During 2023 the share value jumped from an average of $600 in 2022 to $1,000. Altarock used this and sold it four times during this intense rise.

  • Microsoft Corporation (NASDAQ:MSFT) with 16.74% of the portfolio

Microsoft has been a part of the Altarock portfolio since 2021. They kept increasing this position until late 2022 when they owned 2.8 million stocks. Then they decided to trim the position to a current 2 million stocks. Altarock invested $561 million in Microsoft stocks while their current value of the holding is $819 million resulting in a gain of 46%.

  • Inc (NASDAQ:AMZN) with 15.81% of the portfolio

Altarock started buying Amazon stocks in Q1 2022 and they bought big. In 2023 they started selling their stocks when their value started to gain momentum. Now they own 4.43 million stocks with a value of $774 million. They invested $560 million generating a gain of 38%.

  • Alphabet Inc Class A (NASDAQ:GOOGL) with 14.3% of the portfolio

Massey and Bradford own 4.86 million shares valued at $700 million. In 2023 they did a lot of selling. During the year they sold on three occasions a total of 1.5 million stocks. Their total investment in Google since 2019 is $367 million, resulting in a gain of 91%.

  • Visa Inc (NYSE:V) with 10.59% of the portfolio

Visa has been a regular part of Altarock’s portfolio since 2014. Currently, they own 1.83 million stocks, after a busy 2023 year. They bought and sold Visa stocks on four occasions increasing 153 thousand stocks. They invested $355 million in the holding which is currently valued at $518 million netting a gain of 46%.

  • Moody’s Corp (NYSE:MCO) with 6.32% of the portfolio

Altarock used 2023 to fortify their Moody’s holding by adding 687 thousand stocks, raising their stake to 811 thousand stocks. Their total investment in the company is $158 million while the value of the holding is at $310 million. They have netted a gain of 96%.

  • Charter Communications Inc Class A (NASDAQ:CHTR) with 3.48% of the portfolio

The first holding in the Altarock portfolio that has generated a loss. In this case, the loss is not high – just 24% but for a holding dating back to 2016 that is not a good sign. Altarock did a couple of badly timed trades especially during 2022 and partly in 2023, resulting in poor handling performance. What is even worse, the downturn trend of the stock price has diminished its value from a maximum of $550 in late 2022 to the current $290.

  • Mastercard Inc Class A (NYSE:MA) with 2.59% of the portfolio

Mastercard is one of the best stock picks for Altarock in recent times. Since 2014 they invested $44.5 million, and the current value of the holding is at $127 million. Great trading timings brought a gain of 185%. They now own 269 thousand stocks, after they sold 32 thousand in 2023 when the price was on a hiking trend.


Altarock has only eight holdings in their portfolio, but they are diversified into several sectors:

  1. Technology with 44.6% of the portfolio valued at $2.13 billion
  2. Industrials with 30.1% of the portfolio valued at $1.4 billion
  3. Consumer Discretionary with 15.6% of the portfolio valued at $748 million
  4. Finance with 6.5% of the portfolio valued at $310 million
  5. Telecommunication with 3.4% of the portfolio is valued at $165 million.

Altarock Partners Background

Altarock Partners is an investment management firm founded in 2002 by Mark Massey. It is based in Beverly Hills, California. The key people in the fund are Mark Massey who serves as the fund’s CIO, and Scott Bradford.

Altarock Partners’ Investment Philosophy

Investment Strategies

Massey and Bradford are known admirers of Warren Buffett’s value investment approach. They prefer acquiring companies at low and reasonable prices. The company usually has a heavily concentrated portfolio with major stakes in the target investment companies.

When they are looking for potential investment targets they are focused on qualitative analysis. Often they aim at companies prone to buybacks because that practice shows a convinced management who believes in the company.

Also, like Buffett and Pat Dorsey, Altarock is keen on identifying companies with strong economic moats. These moats represent the ability of the company to maintain its competitive advantages and protect long-term profits. This is complementary to the critical part of their investment strategy – once they invest they are willing to wait for the investment out.

Take A Look At Mark Massey Interview:

Risk Management Strategies

Altarock prefers to invest in quality companies. Companies that have wide economic moats, and stable competitive advantages are by themselves lowering the risk of investment.

Beyond that Altarock pursues buys for discount prices, leaving them some breathing room in case of a sudden market downturn. They avoid using leverage which is also seen as a way to lower the risk of major losses.

Massey and his partners actively manage their investments and often partake in making operational decisions. This is on a border with activist investing, but since they are often buying major stakes, they do have a say in making crucial business decisions.

Altarock Partners Portfolio Performance

Historical Performance

From the available data, we can determine that Altarock has generated remarkable returns in the last decade. Since June 2013 the gain of the fund is at a reported 364% significantly beating the S&P 500 in the same period. The index managed to generate a gain of 182%.

They had a constant increase in returns with a downturn in Q1 2020 and a slight slowdown in Q3 and Q4 2022. But, those were the market downturn periods, and besides those the fund performed well above average. Late 2023 saw very good performance, mostly due to the very good standing of their prime-holding TransDigm.

Notable Success

  • Their biggest success is their current prime holding TransDigm. They started trading their stocks in 2014 when their value was at $188, and with good-timed trades, they managed to more than double their initial investment.
  • Mastercard is a smaller but still constant part of their portfolio. Their trust in Mastercard as a company, their competitive advantage, and their position on the market delivered in return three times the value from their first investment.

Notable Failure

  • Booking was never a major part of their portfolio, but after they bought their shares for $1,965 and $2,106 they sold them a year later for $1,833. This is a rare case when they need to abandon the investment so they can just cut their losses.

Future Outlook

Altarock’s future outlook from today’s perspective is very good. All their top players are overperforming. In the last two quarters, they generated massive returns, easily outperforming most hedge funds.

A concentrated portfolio comes with risks, and it is enough for one or two holdings to perform poorly and that could lead to massive losses. But, Altarock is known for its deep analysis and investments in good companies. They often choose leaders in their sectors with proven reputations that can rarely be lost.


Who Runs Altarock Partners?

The CEO of Altarock is Mark Massey, and his partner is Scott Bradford.

Final Thoughts

Using a value investing strategy with protective moats and highly concentrated portfolios is not easy. Not many succeed in this endeavor. If used properly it can deliver significant returns in the long term.

To be able to do so you need to be a disciplined investor, with a lot of knowledge who can “read” the companies and the market. Also, it requires a lot of patience to remain calm during the downturns.

Altarock Partners possesses all these features and we can say that they are using Buffett’s methods with flying colors. Constantly outperforming not only the S&P 500, but most of the competitor hedge funds is a thing worthy of admiration.

Their streak of great performance looks like it will last because they reported major returns in the last year. All their major players are performing great, and the only thing that can mess up their plans is their highly concentrated portfolio.

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Jacob Wolinsky is the founder of HedgeFundAlpha (formerly ValueWalk Premium), a popular value investing and hedge fund focused intelligence service. Prior to founding the company, Jacob worked as an equity analyst focused on small caps. Jacob lives with his wife and five kids in Passaic NJ. - Email: jacob(at) FD: I do not purchase any equities to avoid conflict of interest and any insider information. I only purchase broad-based ETFs and mutual funds.