Cliff Asness: Education, Papers, Wife, Net Worth

While there are some big investors that prefer to keep to themselves, rarely appear in the media and only issue some comments in letters to investors that sometimes appear in the press, there are others that do the exact opposite. One of the latter group is Cliff Asness, a billionaire investor who founded AQR Capital Management, one of the most successful quant funds. Asness often appears on CNBC, Bloomberg TV and other channels where he discusses financial issues and sometimes politics. In addition, Asness has written many papers and articles, which are available on AQR’s website.

Clifford S. Asness was born in Queens, New York on October 17, 1966. He studied at the University of Pennsylvania, where he obtained BS degrees in English and Economics and went to the University of Chicago, where he obtained an MBA at the Chicago Booth School of Business and completed the finance PhD program. After getting his PhD, Asness got a job as managing director and director of quantitative research for Goldman Sachs Asset Management. While at Goldman, he founded the Goldman Sachs Global Alpha Fund, a systematic hedge fund, which was one of the first quantitative funds in the industry. In 1997, he left Goldman Sachs to found AQR Capital Management. Two years later, Asness married Laurel Elizabeth Fraser, who had been working at Goldman Sachs, and they have four children. Asness has a net worth of around $3.0 billion, according to Forbes.

As stated earlier, Asness has written and contributed to a variety of papers some of which were published in peer-reviewed journals, such as the Journal of Finance and Journal of Portfolio Management, and there are many publications authored by him available on AQR’s website. For example, in 2013, Asness, together with Tobias J. Moskowitz, and Lasse Heje Pedersen, wrote a paper titled “Value and Momentum Everywhere” that was published in the Journal of Finance. His earlier papers include “Do Hedge Funds Hedge? Be cautious in analyzing monthly returns.” published in the Journal of Portfolio Management in 2001, and “Surprise! Higher Dividend = Higher Earnings Growth” that was published in 2003 in the Financial Analysts Journal.

Asness’ papers received a number of awards. Financial Analysts Journal twice awarded the investor the Graham and Dodd Award for the year’s best paper, as well as a Graham and Dodd Excellence Award for the best perspective piece and the Graham and Dodd Readers’ Choice Award. In 2006, Asness also received the James R. Vertin Award from the CFA Institute. In addition to awards for his research work, Asness was also included in the list of the 50 Most-Influential People in Global Finance by Bloomberg Markets.

Asness founded AQR Capital Management in 1998 together with David Kabiller, John M. Liew, and Robert Krail. Asness, Kabiller and Liew are currently the Founding Principals of the fund, while Krail has retired for health reasons. The fund employs over 800 people in offices in Boston, Chicago, Los Angeles, London, Hong Kong, and Sydney.

AQR is a quantitative hedge fund with over $195 billion in Assets Under Management, which employs a systematic approach to portfolio building and is a proponent of diversification, using multiple dimensions like asset classes, strategies and time in order to minimize risk and achieve consistent returns.

Cliff Asness is an investor worth following and not just for academic insights, but also because his stock picks can help generate market beating returns. At Insider Monkey, we analyze AQR’s quarterly 13F filings alongside other investors and select some of the stocks that they are collectively bullish on as part of our investment strategy (see more details). At the same time, we looked through the performance of AQR’s holdings in companies worth over $1.0 billion. According to our calculations, AQR was 9.4% in the green in the first six months of 2016, while over the 12-month period ended June 30, the fund’s positions returned over 25%.

In its latest 13F filing, AQR disclosed an equity portfolio worth nearly $75.6 billion, which contained over 2,300 positions, spread across most sectors. On the next pages, we are going to discuss some of the companies in which AQR amassed the largest stakes heading into the third quarter.

1. Apple Inc. (NASDAQ:AAPL)

Apple Inc. (NASDAQ:AAPL)’s stake in AQR Capital Management’s 13F portfolio was inched up by 5% on the quarter to 6.94 million shares worth $999.27 million at the end of June. Apple Inc. (NASDAQ:AAPL) is always one of the most-watched tech stocks, but lately the company has been getting even more attention as it is preparing to release its new iPhone 8, which will be a premium device with an OLED display and a price tag north of $1,000. Apple Inc. (NASDAQ:AAPL) is also expected to release upgraded versions of its current iPhone, iPhone 7S/7S Plus and a new Apple Watch at the event scheduled for September 12. At the end of June, there were 115 funds in our database that collectively held $31.13 billion worth of Apple Inc. (NASDAQ:AAPL)’s stock, up from 113 funds with stakes worth $30.91 billion, respectively, a quarter earlier.

2. Microsoft Corporation (NASDAQ:MSFT)

Cliff Asness’ fund also increased its stake in Microsoft Corporation (NASDAQ:MSFT) by 9% to 13.38 million shares worth $922.59 million during the second quarter. Microsoft Corporation (NASDAQ:MSFT)’s strategy to focus on cloud has been paying off handsomely, as the tech giant has been delivering better-than-expected financial results. Its cloud platform currently has the second-largest market share, trailing behind Amazon.com, Inc. (NASDAQ:AMZN)’s AWS, although by a rather fat margin, 13.8% vs 30.3% for AWS, according to Canalys research. Microsoft Corporation (NASDAQ:MSFT)’s stock has returned over 19% since the beginning of the year and has a dividend yield of 2.11%, one of the highest among technology mega-cap stocks. During the second quarter, the number of investors tracked by Insider Monkey long Microsoft Corporation (NASDAQ:MSFT) increased by three to 124.

3. Wal-Mart Stores Inc (NYSE:WMT)

In Wal-Mart Stores Inc (NYSE:WMT), AQR Capital raised its position by 13% during the second quarter to 9.37 million shares valued at $708.80 million. Similar to the previous two holdings, Wal-Mart Stores Inc (NYSE:WMT) represents one of the oldest positions in AQR Capital Management’s equity portfolio, as the fund has held shares of the retailer since 2004. As consumers are becoming more and more attracted to online shopping, Wal-Mart Stores Inc (NYSE:WMT) is one of the few companies that is capable on taking on Amazon.com, Inc. (NASDAQ:AMZN), which is currently the leader in online retail, with a market share of 43%. Wal-Mart Stores Inc (NYSE:WMT) has been investing heavily in the eCommerce industry lately and has even acquired a number of startups, including Jet.com, for which it paid $3.3 billion. However, even with these efforts, Wal-Mart Stores Inc (NYSE:WMT)’s online sales are estimated at around 3% of the total. However, it’s important to remember that Amazon.com, Inc. (NASDAQ:AMZN) has recently strengthened its online and physical presence with the acquisition of Whole Foods, so Wal-Mart Stores Inc (NYSE:WMT) should also think big regarding new acquisitions if it wants to be a match. Nevertheless, among the funds in our database, Wal-Mart Stores Inc (NYSE:WMT) saw a jump in popularity between April and June, as the number of investors bullish on the stock jumped by 13 to 61.

4. eBay Inc (NASDAQ:EBAY)

AQR also boosted its exposure to eBay Inc (NASDAQ:EBAY) by over 50% during the second quarter and disclosed a $660.77 million stake containing 18.92 million shares in its latest 13F filing. eBay Inc (NASDAQ:EBAY) stock has gained almost 28% since the beginning of the year, even though it took a couple of hits. In April, the company reported better-than-expected results for the first quarter, but provided a soft guidance, while in July, it posted second-quarter EPS of $0.45, which were in line with the consensus estimate, while revenue of $2.33 billion was only slightly better than expected. The in-line results concerned investors about a slow activity growth, which sent the stock lower right after the results. Meanwhile, investors in our database seem to be losing interest in eBay Inc (NASDAQ:EBAY), as the number of funds long the stock declined by two to 53 during the second quarter, while three months earlier, the same figure had slid by nine from 64 funds that held shares at the end of 2016.

5. Johnson & Johnson (NYSE:JNJ)

Johnson & Johnson (NYSE:JNJ) saw Cliff Asness’ fund cut its stake by 14% to 4.91 million shares worth $650.10 million during the second quarter. There were 72 funds in our database long Johnson & Johnson (NYSE:JNJ) at the end of June, up from 70 funds a quarter earlier. AQR has held shares of Johnson & Johnson (NYSE:JNJ) since 2004, which is clear to see why, as the pharmaceutical giant is one of the safest bets on the healthcare sector. The company’s stock has more than doubled over the last decade and it is one of the few so-called “Dividend Kings”, which means that the company has been increasing its dividend for over 50 years in a row. From a valuation perspective, Johnson & Johnson (NYSE:JNJ) also seems to look attractive. It has a forward P/E of 17.10, which is one of the lowest of its peers among major drug manufacturers, while its dividend yield of 2.54% is one of the highest, with dividends being one of the main reasons why investors like the stock.

Disclosure: none