Terry Smith has bought a stake in Amazon for his private investment portfolio, according to regulatory filings.
In June last year it was revealed Smith (pictured) had established long/short fund under Fundsmith brand for his personal wealth. Fundsmith Investment Services is listed on the Fundsmith website as “managing a private investment fund available only to expert investors”.
A US regulatory filing submitted by Fundsmith Investment Services lists Amazon as occupying 5.2% of the $161m (£117m) portfolio, its largest position.
However, it is understood the percentages listed in the filing are just for the US holdings and the portfolio holds other positions not shown in the filing.
Smith has been publicly vocal on why he has not previously invested in Amazon. At the firm’s annual shareholders’ meeting in February, he said despite its ubiquity, the firm’s core retail e-commerce business had been barely profitable and had been funded by its cloud business Amazon Web Services (AWS).
“If Mr Bezos were to float off Amazon Web Services, we would be very interested, it would be a really good business,” he said. “But we don’t particularly like the idea of owning one business that is cross-subsidising a barely profitable business.”
Smith added people assume that because Amazon is an ecommerce business and AWS is a cloud computing business there must be synergy between the two, but he disagreed.
“I’m not aware there is any significant synergy between these two at all, it is just a happy coincidence they are in the same business,” he added.
Amazon is not a holding in the £27bn Fundsmith Equity fund according to its latest factsheet. However, Smith has recently been making an uncharacteristic number of changes to Fundsmith Equity. In the July factsheet, Smith revealed he had begun buying a new position for the fund but said he would not identify the company until “we have accumulated our desired weighting”.
This was the third new investment in the past 16 months after adding in February Church & Dwight, owner of consumer brands such as Trojan and Oxiclean; French luxury goods giant LVMH in December 2020; and Nike and Starbucks in March 2020.
Fundsmith declined to comment.
