As of Q3 2025, Seth Klarman’s Baupost Group portfolio underwent a dramatic strategic pivot, with Restaurant Brands International surging to become the #1 holding after a stunning 104% position increase. The legendary value investor also continued his healthcare conviction with Anthem rising another 114%, while making surprising major reductions in former top holdings Alphabet (-29%) and Wesco (-32%). With new positions in Union Pacific and Genuine Parts, and the portfolio consolidating to just 20 holdings, this quarter reveals Klarman’s most decisive repositioning in years.
1
QSR
Restaurant Brands International Inc.
Explosive Growth +104%
Portfolio %: 11.11%
Value: $529,337,000
Shares: 8,252,862
Change: +4,203,300 shares (+104%)
In the quarter’s most dramatic move, Restaurant Brands International explodes to become Baupost’s #1 holding with a massive 104% position increase. This extraordinary accumulation in the parent company of Burger King, Tim Hortons, and Popeyes represents Klarman’s highest conviction bet on defensive consumer spending, franchise economics, and international expansion opportunities. The doubling down signals this has become a core cornerstone position for the value investing legend.
2
GOOG
Alphabet Inc. Class C
Position Reduced -29%
Portfolio %: 9.50%
Value: $452,550,000
Shares: 1,858,138
Change: -775,850 shares (-29%)
After reaching #1 status in Q2, Alphabet faces a significant 29% reduction and falls to second place. This major trimming likely represents profit-taking after sustained accumulation and strong price appreciation, or capital reallocation to what Klarman views as more compelling opportunities in consumer defensives and healthcare. Despite the reduction, the 9.50% weighting indicates Alphabet remains a substantial conviction holding.
3
ANTM
Anthem Inc.
Continued Surge +114%
Portfolio %: 8.95%
Value: $426,195,000
Shares: 1,319,000
Change: +703,000 shares (+114%)
Anthem’s remarkable journey continues with another extraordinary 114% increase following last quarter’s 150% surge, firmly establishing healthcare as a major Baupost thesis. This sustained aggressive accumulation in managed care demonstrates Klarman’s unwavering conviction in aging demographics, Medicare Advantage growth, and healthcare sector valuations. The consecutive massive increases represent one of the boldest sector bets in Baupost’s recent history.
4
CRH
CRH PLC
Position Reduced -12%
Portfolio %: 8.52%
Value: $405,669,000
Shares: 3,383,395
Change: -442,000 shares (-12%)
After aggressive 42% growth last quarter, CRH sees a partial reversal with an 12% reduction. This trimming suggests profit-taking following strong performance in building materials, though the substantial 8.52% weighting indicates Klarman maintains long-term conviction in infrastructure spending and construction sector fundamentals. The position remains large enough to signal continued belief in the thesis.
5
WLTW
Willis Towers Watson PLC
Position Reduced -17%
Portfolio %: 7.90%
Value: $376,218,000
Shares: 1,089,065
Change: -225,119 shares (-17%)
Willis Towers Watson continues its multi-quarter decline with another 17% reduction, marking sustained capital rotation out of this insurance broker despite remaining a top-five holding. The ongoing trimming suggests Klarman views better opportunities elsewhere, though the 7.90% allocation indicates this legacy position still holds long-term value in insurance brokerage and consulting services.
6
UNP
Union Pacific Corp
New Major Position
Portfolio %: 7.43%
Value: $353,658,000
Shares: 1,496,204
Union Pacific debuts as a major new position at 7.43%, representing a substantial bet on rail transportation infrastructure. This addition to the industrial portfolio demonstrates Klarman’s conviction in essential logistics networks, rail efficiency advantages, and the critical role of freight transportation in North American commerce. The significant initial allocation signals high confidence in railroad economics and competitive moats.
7
WCC
Wesco International Inc.
Major Reduction -32%
Portfolio %: 6.68%
Value: $317,923,000
Shares: 1,503,180
Change: -704,421 shares (-32%)
After being the #2 holding with steady increases, Wesco International faces a dramatic 32% reduction, falling to seventh place. This major trimming of the electrical distributor suggests profit-taking after exceptional performance or concerns about peak infrastructure spending cycles. The substantial remaining position indicates continued long-term value, but capital is clearly being deployed to higher-conviction opportunities.
8
DG
Dollar General Corp.
Shares Unchanged
Portfolio %: 5.79%
Value: $275,622,000
Shares: 2,666,876
Change: No change in shares
Dollar General remains unchanged after last quarter’s substantial 27% increase, suggesting Klarman has reached his target allocation in this defensive discount retailer. The stable holding reinforces the defensive consumer theme alongside the massive Restaurant Brands increase, positioning the portfolio for value-conscious consumer spending patterns and potential economic uncertainty.
9
FERG
Ferguson Enterprises Inc.
Position Increased +2%
Portfolio %: 5.45%
Value: $259,502,000
Shares: 1,155,500
Change: +23,500 shares (+2%)
Ferguson Enterprises sees a modest 2% increase after remaining unchanged last quarter, continuing as a core infrastructure-related holding. This leading distributor of plumbing and HVAC products receives steady support, suggesting Klarman maintains conviction in renovation markets and construction fundamentals despite trimming other building materials positions.
10
FIS
Fidelity National Information Services
Shares Unchanged
Portfolio %: 5.25%
Value: $249,894,000
Shares: 3,789,711
Change: No change in shares
Fidelity National Information Services maintains its position unchanged, remaining a substantial fintech infrastructure holding. The stable allocation suggests Klarman has reached his desired exposure to payment processing and banking technology services, with capital now flowing to other high-conviction opportunities rather than additional fintech expansion.
N
GPC
Genuine Parts Co.
New Position
Portfolio %: 4.06%
Value: $193,347,000
Shares: 1,395,000
Genuine Parts enters as a significant 4.06% new position, adding automotive and industrial parts distribution to the portfolio. This defensive business with steady cash flows and essential products complements other industrial holdings, demonstrating Klarman’s focus on companies with predictable revenues and strong competitive positions in their markets.
11
EXP
Eagle Materials Inc.
Recovery +39%
Portfolio %: 4.60%
Value: $218,978,000
Shares: 939,660
Change: +263,403 shares (+39%)
After being reduced 26% in Q2, Eagle Materials bounces back with a substantial 39% increase, suggesting Klarman found renewed value at lower prices. This reversal in the cement and gypsum producer indicates opportunistic buying when valuations became attractive, demonstrating classic value investing discipline of selling high and buying back lower.
12
LBTYK
Liberty Global Ltd. Class C
Position Reduced -12%
Portfolio %: 5.34%
Value: $254,479,000
Shares: 21,657,803
Change: -3,000,000 shares (-12%)
Liberty Global continues its gradual reduction with a 12% decrease, maintaining the multi-quarter trend of trimming this European telecommunications position. The ongoing exits suggest limited upside in telecom infrastructure despite the remaining substantial allocation, with capital clearly being redeployed to higher-conviction consumer and healthcare opportunities.
N
COLD
Americold Realty Trust
New Position
Portfolio %: 0.93%
Value: $44,064,000
Shares: 3,600,000
Americold Realty Trust enters as a new smaller position, adding temperature-controlled warehouse REIT exposure to the portfolio. This specialized cold storage infrastructure play represents essential supply chain infrastructure for food and pharmaceuticals, offering defensive characteristics and inflation-linked rental growth potential.
13
FISV
Fiserv Inc.
Shares Unchanged
Portfolio %: 2.42%
Value: $115,392,000
Shares: 895,000
Fiserv remains unchanged after being added as a major 3.75% position last quarter, suggesting the initial allocation was sized appropriately. This payment processing and financial technology company continues providing fintech infrastructure exposure alongside FIS, though capital is now flowing primarily to consumer defensives and healthcare rather than additional fintech expansion.
14
GDS
GDS Holdings Ltd. – ADR
Shares Unchanged
Portfolio %: 2.64%
Value: $125,773,000
Shares: 3,249,952
GDS Holdings continues unchanged, maintaining exposure to China’s data center infrastructure growth. This position represents Klarman’s bet on cloud computing and digital infrastructure expansion in Asia, though the stable allocation suggests the position has reached its target size within the portfolio’s international exposure strategy.
1
Defensive Consumer Dominance Takes Center Stage
The quarter’s defining move is Restaurant Brands International’s explosive 104% surge to become the #1 holding at 11.11%, marking a dramatic pivot toward defensive consumer spending. Combined with Dollar General remaining steady and Genuine Parts entering as a major new 4.06% position, Klarman is clearly positioning for economic uncertainty while betting on value-conscious consumers and essential services. This consumer defensive cluster now represents a commanding share of the portfolio, signaling Klarman’s most aggressive defensive positioning in recent years.
2
Healthcare Conviction Reaches Extraordinary Levels
Anthem’s continued massive 114% increase following last quarter’s 150% surge represents unprecedented consecutive accumulation in managed care. Now at 8.95% of the portfolio, this sustained aggressive buying demonstrates Klarman’s unwavering conviction in healthcare sector opportunities. The relentless accumulation over two consecutive quarters in Anthem specifically suggests he views managed care companies as dramatically undervalued relative to demographic tailwinds, Medicare Advantage growth, and healthcare demand fundamentals.
3
Tech Leadership Trimmed, Capital Rotated
After reaching #1 status last quarter, Alphabet faces a surprising 29% reduction, falling to second place and marking a major reversal from the previous aggressive accumulation. This substantial trimming likely represents profit-taking after strong price appreciation and capital rotation to what Klarman views as more compelling opportunities. The move from buying aggressively to selling significantly within just one quarter demonstrates Klarman’s disciplined approach to valuation and willingness to take profits when prices reach his targets, even in high-conviction holdings.
4
Industrial Infrastructure Consolidation & Railroad Entry
The infrastructure theme undergoes significant reshaping with Wesco International slashed by 32% and CRH reduced 12%, while Union Pacific enters as a major new 7.43% railroad position. This rotation within industrials suggests Klarman is shifting from electrical distribution toward transportation infrastructure and essential logistics networks. The addition of Union Pacific immediately as a top-10 holding demonstrates strong conviction in rail economics and critical freight infrastructure, while the Wesco reduction indicates profit-taking after exceptional performance in the electrical distribution cycle.
5
Portfolio Concentration & Fintech Stabilization
The portfolio consolidates to just 20 holdings from 25+ previously, indicating increased concentration in highest-conviction ideas. Meanwhile, fintech positions FIS and Fiserv remain unchanged, suggesting target allocations have been reached in financial technology infrastructure. The fintech theme appears complete after the major Fiserv addition last quarter, with capital now flowing primarily to consumer defensives, healthcare, and select industrial opportunities rather than continued technology expansion.
Seth Klarman’s Q3 2025 portfolio represents one of his most decisive strategic pivots in years, marked by a dramatic shift toward defensive positioning while maintaining aggressive healthcare conviction. The extraordinary 104% increase in Restaurant Brands International vaulting it to #1, combined with Dollar General’s stability and Genuine Parts’ addition, reveals a clear defensive consumer strategy positioning for potential economic headwinds and value-conscious spending patterns.
Simultaneously, Anthem’s sustained massive accumulation with another 114% increase following last quarter’s 150% surge demonstrates unprecedented consecutive conviction in managed care, establishing healthcare as a cornerstone long-term thesis. This relentless buying represents one of the boldest sector bets in Baupost’s history, signaling Klarman’s view that healthcare valuations are dramatically disconnected from demographic and Medicare Advantage growth fundamentals.
The surprise 29% Alphabet reduction and 32% Wesco trimming reveal disciplined profit-taking after strong performance, with capital rotating into what Klarman views as more compelling opportunities. The addition of Union Pacific as an immediate 7.43% position demonstrates conviction in essential transportation infrastructure, while the portfolio’s consolidation to just 20 holdings signals increased concentration in highest-conviction ideas. This quarter showcases Klarman’s masterful balance of defensive positioning through consumer stocks, aggressive healthcare accumulation, and selective industrial exposure, positioning Baupost for multiple economic scenarios while maintaining his legendary value discipline.
