Ako Capital Portfolio: Investment Process And Top Stocks They Are Buying

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Ako Capital Portfolio

Ako Capital is a British investment company founded by a legendary Norwegian hedge fund manager Nicolai Tangen. The current CEO of the fund is Patrick Hargreaves.

Ako Capital portfolio management aims to own stakes in quality companies for the long-term perspective. They are currently managing a $7.25 billion portfolio spread across 28 holdings.

The biggest holding is Alcon Inc which takes almost 8% of the portfolio. It is followed by giants Microsoft, and Visa Class A. Other important holdings include Intercontinental Exchange, Booking Holdings, Accenture Plc Class A, and General Electric.

Ako Capital’s strategy is based on long-term valuation creation. They conduct thorough analyses to identify strong companies. Once they invest they often take active engagement with the companies. Ako Capital prefers to have a slightly concentrated portfolio that allows them to monitor and adjust holdings accordingly. For more information about their portfolio and strategy, stay with us.

Ako Capital Portfolio Key Holdings

Alcon Inc (SWX:ALC) with 7.71% of the portfolio

This Swiss-American pharmaceutical company is currently the largest Ako Capital Holding. They started trading it in 2019 and since then they invested $425 million. In 2023 they conducted three buys and one sale, resulting in an increase of the stake to 6.6 million shares. The current value of the holding is $559 million, and it generated a gain of 32% so far.

Microsoft Corp. (NASDAQ:MSFT) with 6.54% of the portfolio

Ako started investing in Microsoft in late 2022 when they bought half a million stocks at $264. They now own 1.12 million shares which are valued at $475 million. When we take that the fund invested $294 million into the holding we can calculate that Microsoft holding generated a gain of 61% so far.

Visa Class A (NYSE:V) with 6.30% of the portfolio

Visa is a holding that has been a part of Ako Capital’s portfolio since 2016. They started trading it while the price of stock was between $80 and $86, while the price in the meantime rose to $273. They invested $230 million into Visa Class A stocks, while the current value of the holding is $457 million. The company now owns 1.65 million stocks after the trimmings in 2023.

Intercontinental Exchange (NYSE:ICE) with 6.08% of the portfolio

Ako Capital bought the majority of stocks in ICE during 2020 and 2021, while they presently have 3.2 million stocks. While they were buying for prices between $98 and $132 they have been selling for between $105 and $115. Ako invested $358 into this stake while its value is now at $441 million with a gain of 23% so far.

Booking Holdings (NASDAQ:BKNG) with 5.76% of the portfolio

Since Ako started trading Booking stock its value has risen from $1,750 to $3,600. In 2023 they trimmed this holding and now own 116 thousand stocks. Their total investment is measured at $238 million, while the value is $418 million which transfers into a 75% gain.

Accenture Plc Class A (NYSE:ACN) with 5.46% of the portfolio

Accenture is one of those investments that still need to show its full potential. Ako bought a massive 2.25 million shares stake in the company in 2021 at $325, and since then they have been selling their stake. Ako owns 1.19 million shares that are valued at $396 million. They invested $391 million and netted a gain of 1.3%.

General Electric (NYSE:GE) with 5.3% of the portfolio

GE is a late 2023 acquisition of the portfolio when the firm bought 2.46 million shares for $279 million. Since then the stock price rose from $112 to $156 increasing the value of the holding to $385 million. The GE investment generated a gain of 38% so far.

Fair Isaac Corp. (NYSE:FICO) with 4.75% of the portfolio

Since 2016 this has proven to be one of the lucrative deals that Ako Capital LLP recently made. They invested in a FICO stake of $66.1 million, while the value skyrocketed to $344 million. They now own 280 thousand stocks after slight trimming in 2023. The value of their stock rose during 2023 from $600 to $1,231. FICO invested generated a gain of 421%.

Ansys Inc. (NASDAQ:ANSS) with 4.58% of the portfolio

Ako Capital has invested into ANSS a total of $200 million, while the present value of the holding is at $332 generating a gain of 66%. In 2022 and 2023 they have been steadily increasing this position to a current 971 thousand shares.

Sector Allocation

Although the company has a $7.25 billion portfolio shared across 28 holdings it is well-diversified sector-wise. Their current sector allocation is:

  • Technology with 36.9% of the portfolio valued at $2.68 billion
  • Healthcare with 15.4% of the portfolio valued at $1.12 billion
  • Finance with 14.4% of the portfolio valued at $1.04 billion
  • Consumer Discretionary with 12.6% of the portfolio valued at $914 million
  • Consumer Staples with 7.5% of the portfolio valued at $541 million
  • Industrials with 7.3% of the portfolio valued at $529 million
  • Real Estate with 2.5% of the portfolio valued at $179 million
  • Other with 3.5% of the portfolio valued at $252 million.

About Ako Capital

Ako Capital LLP was founded in 2005 by Nicolai Tangen and Gorm Thomassen in London. Before founding a hedge fund they worked in the Norwegian Intelligence Service where they were trained to gather intelligence. This knowledge and experience later helped them in choosing investment targets.

The company’s investment strategy is based on acquiring stakes in quality holdings and keeping them for a longer period. In 2020 Tangen left the position in the fund so he could become a CEO of the Norges Bank Investment Management from where he would manage the Government Pension Fund of Norway. Patrick Hargreaves is the current CEO, while Gorm Thomassen assumed the CIO position.

Ako Capital Investment Strategies & Approach

Risk Management Strategies

Ako Capital LLP is known for picking strong companies that have a good track record. They conduct a thorough analysis of their past performance, competitive landscape, and potential for improvement.

By doing so they are minimizing their risk exposure, and choosing to often go with bit safer bets that will deliver returns in the long run.

Diversification Strategies

When we take a look at the biggest positions in Ako Capital LLP portfolio we see a focus on different industry sectors and geographic regions. They invest both in companies based in the U.S. but also have solid holdings in European companies.

This way they are keeping their portfolio out of harm’s way. They are invested in all major sectors which is keeping them from being exposed to a risk from a specific industry. Someone can argue that the list of holdings due to the size of AUM could be longer, but the company aims to keep a close watch on all its holdings.

Ako Capital Portfolio Analysis

Historical Performance

From the external sources that are scarce, we can get limited information. According to them, the fund generated a gain of 226% in the last 10 years. 5 Year performance is at an estimated 90.32%.

Notable Failure

  • Insider Trading Accusations

In 2010 a trader who worked in Ako Capital until 2009 was charged for insider trading while he was working in Ako Capital. He was fined but he managed to avoid prison due to his agreement to be an associate in the investigation.

Loss on Pinterest Inc. (NYSE:PINS) holding

In 2021 they bought 1.55 million shares at $70 and offloaded them half a year later at $44. Since then the price continued to drop to $34.

Notable Success

  • Ferrari NV (BIT:RACE) holding

It is with 4.03% still an important part of their portfolio. They now own 698 thousand stocks, and in the 8 years since they have been trading it, its value jumped from $42.6 million to $292 million. Ako Capital gained 586% from this investment.

  • Fair Isaac Corp. holding

Also, a big part of their portfolio, and it is still very lucrative for the investors. They turned a $66.1 million investment into a $344 million, generating a gain of 421%.

  • Marriott Class A (NASDAQ:MAR) holding

AKO Capital has invested for 8 years $29.4 million into this holding, while its value increased to $65.9 million. Marriott netted a gain of 124% so far.

Final Thoughts

Ako Capital LLP with its qualitative approach is concentrated on the quality of the company. The major contributing factors are competitive products, services, management, and competitive outlook.

Buying a company for a fair value can often result in high returns over a prolonged time. If you decide to invest with Ako Capital or other qualitative investing investors, be ready to wait for your investment. But, with it also comes slightly lower risk rates, due to the often crucial positions of these companies in their respective industries.

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The post above is drafted by the collaboration of the Hedge Fund Alpha Team.