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Wednesday, February 24, 1999 Published at 18:05 GMT


Business: Your Money

Bill Gates and his cash

Bill Gates plans to give-away most of his fortune

If you were the world's richest man, how would you invest your money?

That is the not altogether unpleasant dilemma facing Microsoft's Bill Gates.

He has so much money, $88bn at the last count, that he has to hire somebody else to help him decide what to do with it.

Now the man charged with managing his vast fortune has shed some light, (or opened a window), on his financial affairs.


[ image: Strong sales of Windows 98 have kept Bill Gates' fortune growing]
Strong sales of Windows 98 have kept Bill Gates' fortune growing
The most amazing admission is that Mr Gates, the doyen of the computer industry, has chosen to steer clear of Internet and technology shares - apart, of course, from his huge holding in Microsoft.

In an interview with Fortune Magazine, Michael Larson, the 39 year-old fund manager who has run Mr Gates' financial affairs since 1993, has given a fascinating insight into his job.

He reveals that Mr Gates, who plans to give away nearly all his wealth in his lifetime, has shares in cable TV companies, biotech firms and Berkshire Hathaway, Warren Buffet's investment vehicle.

Techno-phobia

However, Microsoft is his only large technology investment.

"If you think about it, 90%-plus of Bills' wealth is in a single technology stock. He really doesn't need much, if any, equity exposure at all. We pretty much don't own them (technology stocks), not with Bill's other asset," Mr Larson told the magazine.

"I do think the market is high right now, and there is an awful lot of excitement about tech stocks," he added.


[ image: Bill Gates has snapped up the £750-a-night Cliveden]
Bill Gates has snapped up the £750-a-night Cliveden
Indeed, Mr Gates and Mr Larson have taken a rather unadventurous approach to investing the fortune.

"The point wasn't for Bill to become richer than the Sultan of Brunei," said Mr Larson.

Mr Gates' 18.5% in Microsoft holding is now worth around $76.5bn, another $6.5bn is held in two charitable trusts and the remaining $5bn is held in his personal account.

Microsoft aside, most of Mr Gates' assets are held in relatively secure investments such as government and corporate bonds.

However, he has taken a flutter on a few more risky investments.

Scientific experiment

Mr Gates has a particular penchant for biotech stocks - fledgling companies trying to develop pioneering new medical remedies.

He said: "I've always been interested in science - one of my favourite books is James Watson's Molecular Biology of the Gene. I'm an investor in a number of biotech companies, partly because of my incredible enthusiasm for the great innovations they will bring."

Mr Gates also owns stakes in cable TV groups TCI, Liberty Media, Cox Communications and USA Networks, the group run by US television entrepreneur Barry Diller.

He has another $250m invested in property, including Cliveden hotels group, which owns the former Astor family home and is the scene of the infamous Profumo sex-scandal involving a former government minister.

Rich pickings

However, Mr Gates does not pull all the purse strings. He insists on knowing how the investment strategy works but gives Mr Larson 'full discretion' in carrying it out.

Mr Larson was told that he would be working for a 'wealthy guy in the Pacific Northwest'.

When he got to meet Mr Gates they hit it off immediately, but only after Mr Larson's 13 referees had been subject to a one hour grilling.

Now Mr Larson claims he has got 'the best job in the world'.

Out the window

Mr Gates has been selling Microsoft shares for the past few years - and plans to continue to off-load more stock.

Since the company went public he has sold an average of five million shares every three months, which is equivalent to around 80,000 shares during each trading day.

He told Fortune: "The money I have outside Microsoft is less than 10% of the total. Since we are obviously heavily weighted with Microsoft, we will sell stock periodically in order to get more diversity. It's basically the same strategy most individual investors engage in."

However there is one big difference - most investors do not have $88bn to play with.



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