London/New York: Bill Gates is still in wealth-creation mode. “We’re not, you know, in some defensive posture where we’re mostly in cash, or anything like that," the Microsoft Corp. founder said in an interview with Bloomberg Television. “The strategy that’s been used on the investments is to be over 60% in equities."
That’s helped Gates add $17 billion to his net worth this year, taking his wealth to $106 billion, behind only Jeff Bezos on the Bloomberg Billionaires Index, even as his charitable donations have topped $35 billion.
The Gates fortune had about $60 billion of equity assets as of Monday, according to data compiled by Bloomberg. By comparison, the average family office portfolio in North America held about 32% of its assets in equities in 2018, according to Campden Wealth’s 2018 global family office report.
The growth overseen by the billionaire’s investment chief, Michael Larson, who oversees family office Cascade Investment, has enabled Gates to build the world’s largest private foundation without diminishing his fortune.
That may start to shrink if politicians heed his call for higher taxes.
“I doubt, you know, the US will do a wealth tax but I wouldn’t be against it," he said in the interview. “The closest thing we have to it is the estate tax. And I’ve been a huge proponent that that should go back to the level of 55% that it was a few decades ago."
Inequality has become an explosive political issue with America’s richest 0.1% controlling more wealth than at any time since 1929. On Tuesday, the Bill & Melinda Gates Foundation released its annual Goalkeepers report. The study seeks to monitor and aid the progress of the United Nations in achieving in its Sustainable Development Goals, which the foundation says are being hindered by persistent inequality. The report called for greater investment in healthcare, education and technology to help reduce inequality worldwide.
Gates, 63, also backed higher income taxes on America’s wealthiest people and made a call for greater transparency. “I’m for way more financial transparency. I don’t like that you can have trusts where nobody knows who owns it."
Big tech breakup
Gates, who knows a thing or two about antitrust investigations, also said it was not a good idea to break up the biggest US tech companies as some politicians have suggested.
The Microsoft Corp. co-founder and former chief executive officer battled the justice department for years in the late 1990s in a bruising antitrust case. At issue was the software giant’s bundling of its Internet Explorer browser to Windows as a way to maintain its dominance in PC operating systems. Ultimately Microsoft remained intact.
Two decades later, Microsoft is one of the few big US technology companies not under regulatory scrutiny in Washington. The Justice Department, the Federal Trade Commission, state attorneys general and a congressional committee are all scrutinizing so-called Big Tech—companies from Alphabet Inc.‘s Google to Facebook Inc. and Amazon.com Inc.—that Washington has concluded have gotten too big and too powerful.
Gates disagrees. “You have to really think; is that the best thing?" he said in the Bloomberg TV interview. “If there’s a way the company’s behaving that you want to get rid of, then, you should just say, ‘Okay, that’s a banned behavior.’ But splitting the company in two, and having two people doing the bad thing—that doesn’t seem like a solution."
Lawmakers including David Cicilline, who is leading the House antitrust subcommittee’s inquiry into large internet companies, has asked them for detailed information about acquisitions, business practices, executive communications, previous probes and lawsuits.
“It’s a pretty narrow set of things that I think breakup is the right answer to," Gates said. “These companies are very big, very important companies. So the fact the governments are thinking about these things, that’s not a surprise."
Gates said Microsoft’s own antitrust scrutiny has made the company “more thoughtful about this kind of activity." In his view, companies like Google and Amazon the rest are “behaving totally legally. They’re doing a lot of innovative things."
Wind and solar
Gates also said it’s time wind and solar passed their subsidies along to emerging technologies that need them more.
After decades of government incentives, wind and solar have been deployed widely enough for manufacturers and developers to become increasingly efficient and drive down costs. Now they can probably survive without them, Gates said.
“The tax benefits there should be shifted into things that are more limiting, like energy storage, offshore wind— which still has a huge premium price," said Gates, who co-chairs a global group of business, political and scientific leaders formed in 2018 to push for investments to help the world adapt to climate change.
“The progress in solar and wind is very helpful," Gates said. “But the sun doesn’t shine 24 hours a day."