Boston Billionaire David Abrams Has 66% of His Hedge Fund’s Investments in These 3 Stocks

If you’ve never heard of hedge fund billionaire David Abrams, he founded his Boston-based investment firm, Abrams Capital Management, in 1999, after spending a decade working with iconic investor Seth Klarman, at Baupost Group. 

Key Points About This Article:

• While billionaire investor David Abrams might not have the profile of Baupost Group’s Seth Klarman, he’s had no problem delivering for his investors.  
• Abrams Capital Management’s largest position accounts for nearly half of its $6.22 billion in assets. 
• With an estimated net worth of $2.6 billion, he’s earned his wealth the old-fashioned way. He’s earned it. Nvidia made early investors rich, but there is a new class of ‘Next Nvidia Stocks’ that could be even better. Click here to learn more.

The interesting thing about Abrams is that he didn’t have a finance background when he got his first job in New York in the early 1980s; he graduated from the University of Pennsylvania with a Bachelor of Arts in History. 

A fast learner, Abrams learned the ropes of investing under Klarman before setting out independently after a decade. His hedge fund’s investment strategy is straightforward: it uses a fundamentals-based, value-oriented approach that looks for long-term opportunistic bets without using leverage to boost the firm’s returns. 

Today, Abrams is estimated to have a net worth of $2.6 billion, and his firm has $10.05 billion in assets under management. 

The hedge fund’s latest 13F holdings report showed that it had $6.22 billion in assets invested in 13 stocks, an average of $478 million per holding. 

Incredibly, as of the end of 2024, the firm’s top three positions accounted for two-thirds of its 13F assets.     

In Loar He Trusts

Abrams Capital Management’s largest of 13 positions is Loar Holdings (NYSE:LOAR), a manufacturer of aerospace and defense components. The company’s strategy is to use M&A to grow its business units beyond organic sales. Given Abrams started in mergers and arbitrage investments, the interest in Loar makes sense. 

WhaleWisdom indicates Abrams first took a position in Q2 2024, paying an average price per share of $54.19. However, the investor first got involved in Loar in 2017, when Abrams Capital Management partnered with Blackstone and several other investors, including Loar Group founder Dickson Charles, to acquire the company. 

In April 2024, Loar conducted its initial public offering, selling 11 million shares at $28 each for net proceeds of $283 million. None of the existing shareholders sold any of their stock in the IPO. 

According to the prospectus’s dilution page, the investors, including Abrams, paid an average price per share of $5.87. Thus, Abrams’s investment is worth approximately 11 times the initial investment. 

At the end of December, Abrams Capital Management owned 37.4 million shares, accounting for 44.50% of its 13F assets and, more importantly, giving it a 41.7% ownership stake in the niche manufacturer. 

Despite the hedge fund selling a million shares of Loar stock in the fourth quarter, it easily remains the aerospace and defense company’s largest shareholder, three times higher than the second-largest shareholder, Blackstone (NYSE:BX), at 13.91%. 

With a share price as high as $96.99 in November, it’s understandable why the hedge fund sold a million shares in the fourth quarter after completing the 180-day lock-up period. 

The Value Play in Automotive

Abrams is a patient investor. He invested in Loar for seven years before the company went public. 

The hedge fund’s second and third-largest positions have been held since Q2 2018 and Q3 2017, respectively. The former, Lithia Motors (NYSE:LAD), accounts for 13.75% of the hedge fund’s 13F assets, while the latter, Asbury Automotive Group (NYSE:ABG), represents 8.24% of the portfolio. 

Abrams owns 8.98% of Lithia and 10.76% of Asbury. According to 2024 stats, Lithia is the largest dealership group in the U.S. by new car sales (729,799), while Asbury is the sixth-largest (277,016). The two firms also hold the same position for used car sales. 

In both cases, Abrams has made good returns on his automotive investments. He’s estimated to have paid $106.10 per share for Lithia (over $300) and $65.27 for Asbury (around $250). 

Can the duo keep it going, given the potential for higher vehicle prices in a trade war? That remains to be determined. 

Interestingly, despite the success of these two investments, AutoNation (NYSE:AN) has gained 300% over the past five years, considerably more than either of them. 

Perhaps he’s still holding because he expects the stocks to deliver over the next five years. Given Abrams’ track record, it’s hard to doubt his decisions.  

The Average Hold Is Above Average

According to WhaleWisdom, the hedge fund’s average holding time for its 13 holdings is nearly 20 quarters or five years. That’s despite Loar’s holding time based on its April 2024 IPO being less than four quarters. 

The hedge fund’s oldest holding is U-Haul Holding (NYSE:UHAL), North America’s leading do-it-yourself moving and storage company, which provides both moving trucks and trailers, as well as actual storage facilities, and portable storage units. 

Abrams first acquired its voting common stock in Q4 2016 and Class B non-voting stock in Q4 2022. The company accounts for 3.39% of the hedge fund’s 13F assets. 

While the hedge fund has done well on its investments, it is likely holding onto its real estate to monetize it. The hedge fund owns over 2,356 locations in 50 states and 10 Canadian provinces. As of Dec. 31, its land and buildings were valued at $11.13 billion on its balance sheet. 

It’s an interesting buy-and-hold investment.  

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