Himalaya Capital Management Q1 2026 13F Holdings and Activi…

I. Institutional Overview

Himalaya Capital Management, led by the renowned value investor Li Lu, represents one of the most disciplined and concentrated investment vehicles in the global financial landscape. As of the portfolio snapshot dated March 31, 2026, the institution manages a reported market value of approximately $3.20 billion. Li Lu, often recognized as a protégé of Charlie Munger and a staunch practitioner of the Graham-Dodd-Munger school of value investing, maintains a portfolio that is the antithesis of the modern trend toward hyper-diversification. With only 14 holdings reported this quarter, the institution exemplifies a "high-conviction" investment philosophy, where capital is deployed only into a select few businesses that the manager understands deeply and believes possess enduring competitive advantages.

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II. Sector Allocation Analysis

The Financials sector, currently at 30.80%, has undergone a significant transformation this quarter. Historically, Himalaya Capital has been a major proponent of traditional commercial banking, particularly through large holdings in Bank of America. However, the data shows a sharp reduction in traditional banking exposure, offset by the introduction of "financial infrastructure" companies like S&P Global and Moody’s. This rotation suggests a macro view that while traditional banks may face headwinds from regulatory changes or shifting interest rate environments, the "gatekeepers" of the financial markets—those who provide the ratings, data, and indices—possess superior pricing power and more attractive "capital-light" business models.

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III. Top 10 Holdings Deep Dive

The logic for such a massive concentration in Alphabet is rooted in the company’s "unassailable moat." As the gateway to the internet, Alphabet’s Search business provides a level of data and cash flow that is virtually unmatched. In 2026, with AI having become a core component of digital life, Alphabet’s investments in DeepMind and its proprietary Gemini models have likely solidified its position. For a value investor like Li Lu, Alphabet represents the "perfect" business: high margins, massive network effects, and a fortress-like balance sheet. The slight increase in overall weight (despite the Class C reduction) suggests that the institution believes Alphabet’s valuation remains attractive relative to its long-term earnings power, especially as its Cloud and YouTube segments continue to scale.

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IV. Major Buys/Additions

These businesses are the ultimate "toll booths." S&P Global and Moody's operate in a near-duopoly in the credit rating space. Any corporation or government wishing to issue debt in the global markets must pay these companies for a rating. This creates a business model with incredibly high margins, low capital expenditure requirements, and a "moat" that is virtually impossible to cross. MSCI, similarly, dominates the world of equity indices, with trillions of dollars in passive and active funds benchmarked against its products.

The total capital deployed into these new and added positions is approximately $275 million. Interestingly, this amount is significantly less than the capital recouped from the massive reduction in Bank of America (estimated at over $360 million). This suggests that the institution is not just "reallocating" but is actually "upgrading" its portfolio—moving from capital-intensive, macro-sensitive banks into capital-light, high-moat infrastructure. This "inventory reallocation" has effectively increased the portfolio’s overall "quality" and "defensiveness" while maintaining significant offensive potential through the new growth bets in TME and CROX.

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V. Major Reductions and Rebalancing Operations

This is a classic "Sell A to Buy B" rotation. The institution is moving from the "risk-heavy" side of finance (lending, interest rate risk, credit risk) to the "risk-light" side (data, ratings, indices). While Bank of America remains a high-quality institution, its business model is inherently more volatile and capital-intensive than that of S&P Global or Moody's. This reduction represents a "de-risking" of the portfolio’s financial exposure while maintaining a "toe-hold" in the sector.

The massive exit from Bank of America serves as a "warning signal" for the traditional banking sector. When a high-conviction value investor like Li Lu reduces a core banking position by over 70%, it suggests that the "risk-reward" profile of the sector has permanently shifted. It may indicate that the "easy money" in the post-pandemic banking recovery has been made, and that the future will be characterized by lower returns on equity and higher regulatory hurdles. For other investors, this move highlights the importance of distinguishing between "cheap" stocks and "value" stocks—the former may be cheap for a reason, while the latter possess the moats necessary to compound capital over time.

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VI. Investment Insights and Risk Warnings

The logic chain is clear and compelling: 1. Sold : The institution significantly reduced its exposure to Bank of America , a "price-taking" business sensitive to credit cycles and interest rates. 2. Bought : It initiated positions in S&P Global, Moody's, and MSCI , "price-making" businesses that act as the essential infrastructure of global capitalism. 3. Expanded : It doubled down on Alphabet and Crocs , while adding Tencent Music , focusing on platforms with massive network effects and resilient consumer loyalty. 4. Result : The portfolio is now more "defensive" in its risk profile but more "offensive" in its margin and cash-flow characteristics.

Himalaya Capital’s operations are tailored to its specific investment objectives, which include a multi-decade time horizon and a very high tolerance for short-term volatility in pursuit of long-term compounding. An individual investor with a shorter time frame or a lower risk appetite should not blindly imitate these moves. For example, the 45% concentration in Alphabet is a "high-stakes" bet that requires a level of fundamental understanding and psychological "holding power" that most investors do not possess.

This section shows only part of the complete report. View the app for the full analysis, position-level detail, and quarter-over-quarter tracking.

Sources and limitations

This report uses public U.S. Securities and Exchange Commission Form 13F disclosures and structured data maintained by 13F Hub. A 13F filing is a quarter-end snapshot of reportable long positions, is normally published with a delay, and does not disclose every short position, cash balance, bond, derivative, or non-U.S. asset.

Narrative content is prepared from the same-period SEC disclosure and 13F Hub structured data, then checked before publication. This material is for research and education, not personalized investment advice.