Himalaya Capital Management Llc Rotates From Big Banks Into Tollbooth Franchises

The biggest adds show a deliberate pivot toward businesses that monetize information, scale, and habit rather than leverage. Himalaya initiated positions in S&P Global, Moody’s, MSCI, H&R Block, and Tencent Music, and increased Crocs — a tight, opinionated list of franchises with durable customer lock-in.

• Tencent Music (TME, 1.91%): A new ~$61.2M position in China’s dominant online music and audio platform, bought around $13.41 and currently sitting at a -36.8% mark-to-cost. This looks like classic contrarian sizing into regulatory and sentiment overhangs, building on the existing China consumer-tech thesis expressed via PDD at 14.71%.

• S&P Global (SPGI, 1.61%) and Moody’s (MCO, 1.61%): Roughly equal new stakes of about $51.7M each in the two key global ratings and data oligopolies, both currently modestly below Himalaya’s ~$474 average entry levels. The fund is clearly paying up for structural pricing power and non-cyclical fee streams, a marked contrast to the chunk they just pulled out of money-center banking.

• H&R Block (HRB, 1.61%): A new ~$51.6M position in a mature but extremely cash-generative tax-prep franchise, initiated at roughly $37.66 and now only slightly under water. This looks like a classic value investor’s preference for boring, recession-resilient cash flows that don’t depend on economic heroics to work.

• Crocs (CROX, 2.30%): A 41.2% share-count increase, adding about $21.5M and lifting the stake to ~$73.6M. Himalaya is leaning harder into a cult brand with high margins and a history of buybacks, suggesting conviction that market fears about fashion cyclicality are overdone.

• MSCI (MSCI, 0.32%): A smaller but telling $10.2M new position in index and analytics, bought near $556.37 and already slightly above cost. Alongside SPGI and MCO, this cements a clear “picks-and-shovels for global capital markets” theme.

Only one major trim shows up in the disclosed top-50, but it’s decisive: Bank of America was cut by -71.3% in shares, freeing an estimated $362.4M. The remaining stake, at 4.57% and ~$146.2M, is still meaningful, yet the signal is unambiguous — Himalaya no longer wants a double-digit weight in a rate- and credit-sensitive giant.

That BAC reduction is almost a mirror image of the new buys: roughly the same order of magnitude as the combined capital deployed into Tencent Music, S&P Global, H&R Block, Moody’s, and MSCI. In effect, they’re swapping part of a spread-based, regulator-bound balance sheet for a basket of oligopoly fee and data franchises and a China platform asset.

Notably, there are no trims in the tech and platform core: Alphabet (both share classes), PDD, Apple, East West Bancorp, Berkshire, and Occidental are all unchanged. The message is that any portfolio de-risking is happening at the margin, not at the heart of their long-term thesis.

At the sector level, Himalaya emerges from the quarter even more skewed toward technology and structurally advantaged financials. Technology rose from an estimated 58.31% to 60.4% of the book without a single share added, purely via relative outperformance and the decision not to diversify away from PDD and Alphabet.

Finance, by contrast, dropped from 24.27% to 17.04%, driven almost entirely by the BAC sale. But this isn’t an anti-financials call; it’s a rotation within financials — out of credit-exposed money-center banking, into ratings (SPGI, MCO) and index analytics (MSCI) with asset-light economics and pricing power.

Consumer exposure expanded aggressively: consumer discretionary climbed from 1.57% to 5.82% as Crocs was boosted and Tencent Music and H&R Block were added. Real estate exposure, via MSCI’s classification, appears at 0.32% from zero, and energy (Occidental at 2.98%) and Berkshire’s unclassified bucket at 13.44% were effectively flat. The net picture is a portfolio that increasingly prefers subscription, licensing, and habitual consumer spend over spread income.

Taken together, this 13F paints a manager doubling down on a barbell: on one side, mega-scale tech platforms and China consumer rails; on the other, oligopoly tollbooths in ratings, indices, and tax services. The dramatic BAC reduction signals less patience for traditional banking risk in a late-cycle, higher-for-longer rate backdrop.

Alphabet (both lines), PDD, Berkshire, East West Bancorp, and Apple are being treated as long-duration compounds — untouched even after a -7.08% quarter. The new cluster in SPGI, MCO, and MSCI shows a clear belief that the real winners in global capital flows are the data, benchmarks, and gatekeepers that institutions must pay, regardless of macro.

Adding Crocs, Tencent Music, and H&R Block says Himalaya is willing to take idiosyncratic, stock-specific risk where it sees durable cash generation masked by near-term narrative or headline risk. Unless macro breaks sharply, expect future rotations to continue along this line: trimming capital-intensive, regulated balance sheets to feed a concentrated ecosystem of software, platforms, and fee-based financial infrastructure.