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Baupost Group’s Seth Klarman picked up several beaten-down stocks last quarter, while increasing its big stake in Google parent Alphabet to take advantage of the rebound in technology. The widely followed hedge fund manager took a new, $154 million stake in fintech services provider Fiserv , according to the latest regulatory filing. Fiserv recently nosedived after cutting its forecast for annual revenue growth, bringing the stock’s six-month loss to 42%. Baupost also added a $51 million bet on packaging firm Amcor Plc and a $24 million stake in Brazilian payments company PagSeguro Digital in the second quarter. The Boston-based hedge fund also hiked its stake in Alphabet last quarter by 27% to a holding worth $464 million at the end of June. Alphabet, whose shares rallied 14% in the second quarter, is now Baupost’s second-largest position, trailing only Swiss mobile and broadband provider Sunrise Communications . Baupost’s top holdings at the end of June also included Wesco International , Willis Towers Watson and asphalt and cement maker CRH PLC . The billionaire hedge fund manager has been an almost religious follower of Benjamin Graham’s investing style, buying out-of-favor and undervalued assets to ensure a margin of safety. As a result, Klarman has drawn comparisons to Warren Buffett for his patient, disciplined approach, leading some to dub him “The Oracle of Boston” in a nod to “The Oracle of Omaha.” The 68-year-old Harvard and Cornell grad published his investment book, “Margin of Safety,” in 1991. A long out-of-print cult favorite, a used copy of “Margin of Safety” now fetches almost $4,000 on Amazon . Klarman recently helped update the investment bible ” Security Analysis ” by Benjamin Graham and David Dodd, written in 1934 in the depths of the Great Depression. Klarman co-founded Baupost in 1982 , when the firm had just $27 million in assets. It scored a 20% average annualized return for the next few decades, posting its best year in 2017, with a 52% return, specializing in buying distressed debt and mortgage securities that had bottomed. However, as growth stocks and technology shares have continued to lead the stock market after a decade of outperformance, value investors like Klarman have struggled with underperformance in recent years. Baupost has returned only about 4% a year over the past decade, and investors have withdrawn roughly $7 billion from the hedge fund over the past three years, according to Bloomberg News.
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