Pacifica Capital Investments LLC is a California-based hedge fund led by its founder Steve Leonard since its start in 1998. Leonard, who spent 20 years in the commercial real estate industry prior to founding Pacifica returned on average 12.2% annually to his investors during the period of 1998 to 2010, which was well above the 1.8% average annual return for the S&P 500 during the same time. The fund, which holds public equities with a value of $154.57 million as of March 31, keeps 75% of its holdings in finance and 24% in consumer discretionary. Let’s take a look at the three major positions Pacifica keeps, namely Berkshire Hathaway Inc. (NYSE:BRK.B), Goldman Sachs Group Inc (NYSE:GS) and Starbucks Corporation (NASDAQ:SBUX), which together represent 62.49% of its public equity portfolio.
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In Berkshire Hathaway Inc. (NYSE:BRK.B) Pacifica decreased its stake by 1% during the first quarter, leaving it with 265,558 shares with a value of $38.33 million, making it the largest holding in Pacifica Capital’s public equity portfolio. Berkshire Hathaway, led by its legendary founder Warren Buffett, has been having an uncharacteristically poor first half of the year, dropping by nearly 7% year-to-date, and dragging its yearly returns down to just 11.7%, well beneath its historical returns. During the last week it was announced that Berkshire Hathaway had exercised a warrant giving it control of 52.5% of the shares in ketchup producer H.J. Heinz Company (NYSE:HNZ). This is notable for the fact that H.J. Heinz shareholders are scheduled to vote July 1 on the company’s proposed purchase of and merger with Kraft Foods Group Inc (NASDAQ:KRFT), a deal executed by Buffett and 3G Capital, the duo who purchased Heinz itself back in 2013 for $23 billion. Following the merger, Berkshire Hathaway will control about 27.0% of the newly-created food giant, which will be named Kraft Heinz Co. Gifford Combs representing Dalton Investments also decreased his stake in Berkshire Hathaway Inc. (NYSE:BRK.B) during the first quarter, by 20%, leaving him with 400,766 shares.