Apple's Braeburn Capital leaves Reno office, doesn't update address [u]

Posted:
in General Discussion edited January 2014
Apple's Braeburn Capital subsidiary, which manages the company's vast cash reserves as its "asset management corporation," is no longer located at its last reported address.

Apple's former Braeburn Capital location


A year old records report on the corporation (which Apple named after a type of apple particularly suited to long term storage) lists the address of its principals as being at suite 225 on 730 Sandhill Road, a suburban office park in Reno, Nevada (pictured above).

A blog entry profiling Apple's Reno operations as "the world's largest hedge fund" reiterated last September that Braeburn Capital was at the time operating from that address. It visited the building and photographed the office's sign (which is now gone; note that Braeburn is also not a "hedge fund," nor is its holdings as secret as the article suggested).

However, the office at that address is now in use by another firm (Randstad finance and accounting). Asked about Braeburn, the receptionist told AppleInsider that she only knew that the firm is no longer operating at that location and that she didn't know where it had relocated. A search of Apple's record filings did not turn up a new address.

Apple doesn't appear keen on publicizing the address of its Reno operations; neither Siri nor Maps offer any help in locating the Braeburn offices the way they do direct users to Apple's stores (including the one located in Reno) and its main headquarters facilities in Cupertino.

Why Apple is (somewhere) in Reno

Apple set up its Braeburn Capital subsidiary in 2006, tasked with managing the company's cash and short term investments. It located the operation in Nevada for tax purposes; Reno is the closest significant city in the state to Apple's Cupertino, California headquarters, located about 4 hours east of the San Francisco Bay Area.

At the end of 2005, Apple's holdings were $8.3 billion. By the end of 2006 Braeburn's managed asset pile had grown to $10.1 billion. Today, Apple's holdings are in excess of $130 billion, and generating intense scrutiny from shareholders and other investors that are hoping to seize some portion of the cash.


Apple's Cash


Apple's cash holdings through fiscal 2012. Image credit: Asymco.


Apple's critics are also bothered by the company's cash, and like to describe Braeburn as a form of "tax evasion." However, the firm is legitimately earning gains on capital invested from within Nevada, something that is no more scandalous than residents of Washington state shopping across the river in Oregon to take advantage of that state's lack of a sales tax, or Amazon's online sales that aren't subject to the sales taxes of shoppers.

Apple is not routing its American retail store revenues, software licensing and hardware revenues through any loopholes with Braeburn; Apple already pays federal and state corporate income, payroll and other taxes on its US revenues as they are earned. But its growing cash pile, even if conservatively invested, would frequently generate capital gains.

If located in Apple's home state of California, Braeburn Capital would require incremental payments of capital gains taxes at rates that are now among the highest in the nation.

Long term federal and state capital gains (profits on investments held more than one year) are now taxed in California at 33 percent, making it second worldwide only to Denmark; California's capital gains taxes are now higher than France, Finland or Sweden. In contrast, capital gains in Japan are only taxed at 10%, while tax havens in Luxembourg and Switzerland don't tax capital gains at all.

By locating Braeburn Capital in Reno, Nevada, Apple can take advantage of favorable tax rates while managing its growing investment pool. The subsidiary still pays federal US capital gains taxes, but Nevada has no state capital gains taxes of its own. When Apple distributes its cash to shareholders, or when shareholders sell their shares at a profit, those gains are taxed at the effective tax rate of the shareholder.

The question remains: where exactly is Braeburn Capital now located? (Update: reader AAPL1000 notes that Braeburn has moved to 6900 South McCarran Blvd, Suite 3020 in Reno Nevada. Additionally, a Reno Gazette-Journal blog notes that the subsidiary moved to the new location "about a year and half ago.")

Additionally, Apple has other plans for expanding in Reno. In addition to favorable tax rates, the area also has some other advantages that play into Apple's expansion plans, as a subsequent report will detail.
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Comments

  • Reply 1 of 30
    solipsismxsolipsismx Posts: 19,566member
    1) Find out from other people who have been working in that building alongside Braeburn Capital the names of an employee.

    2) Locate where that person lives.

    3) Follow them.


    If AI's expenses my trip, which will likely include bribing some people, I'll have it done in less than a week.
  • Reply 2 of 30
    theothergeofftheothergeoff Posts: 2,081member

    Quote:

    Originally Posted by SolipsismX View Post



    1) Find out from other people who have been working in that building alongside Braeburn Capital the names of an employee.



    2) Locate where that person lives.



    3) Follow them.





    If AI's expenses my trip, which will likely include bribing some people, I'll have it down in less than a week.


    If Apple's RDF was in full force, the names of the employees would have been false, their addresses are ginned up, and corporate papers were one big 'strategic leak' to track down the guilty (who are now whale bait in SF Bay or Lake Tahoe).


     


    But I welcome your efforts to get a trip out of the deal;-)


     


    ;-)

  • Reply 3 of 30
    chuckdchuckd Posts: 34member
    They must've moved to the new triangle-shaped campus in the Cayman Islands.
  • Reply 3 of 30
    mstonemstone Posts: 11,510member

    Quote:

    Originally Posted by SolipsismX View Post



    1) Find out from other people who have been working in that building alongside Braeburn Capital the names of an employee.



    2) Locate where that person lives.



    3) Follow them.





    If AI's expenses my trip, which will likely include bribing some people, I'll have it done in less than a week.


    http://www.linkedin.com/pub/steve-johnson/14/748/53


     


    go fetch Soli

  • Reply 5 of 30
    jragostajragosta Posts: 10,473member
    Who cares?

    Apple has $135 B. Who cares where the office that manages it is located?

    However, it does raise one point. The name "Braeburn Capital" suggested to me that Apple could start up an Angel and Venture capital investing group. A few billion dollars would be enough to have a huge impact on the future of computing and should generate a nice future revenue stream for Apple. Typically, these high risk investments offer a significant risk of failure, but the payoff is large enough that angel and venture investors make a fortune - and end up with large equity stakes in fast growing companies.

    Apple should set aside about $5 B for that type of startup capital ventures.
  • Reply 6 of 30
    ankleskaterankleskater Posts: 1,287member
    solipsismx wrote: »
    1) Find out from other people who have been working in that building alongside Braeburn Capital the names of an employee.

    2) Locate where that person lives.

    3) Follow them.


    If AI's expenses my trip, which will likely include bribing some people, I'll have it done in less than a week.

    Too late. They have enough cash to hide a loooong time
  • Reply 7 of 30
    solipsismxsolipsismx Posts: 19,566member
    mstone wrote: »



    Next step is to narrow down the results. Since we have a picture it won't be too hard as there are a lot less than expected. Of course, this assumes he lived in Washoe county and owned a residence. Knowing if he had a wife and what her name is would also help.
  • Reply 8 of 30
    Dan_DilgerDan_Dilger Posts: 1,583member

    Quote:

    Originally Posted by jragosta View Post



    Who cares?



    Apple has $135 B. Who cares where the office that manages it is located?



    However, it does raise one point. The name "Braeburn Capital" suggested to me that Apple could start up an Angel and Venture capital investing group. A few billion dollars would be enough to have a huge impact on the future of computing and should generate a nice future revenue stream for Apple. Typically, these high risk investments offer a significant risk of failure, but the payoff is large enough that angel and venture investors make a fortune - and end up with large equity stakes in fast growing companies.



    Apple should set aside about $5 B for that type of startup capital ventures.


     


    That's an interesting idea, particularly if you look at how various companies that used to build stuff are now essentially banks. GE and I believe GM have both stated things like "we used to build cars (in the case of GM) but now we are a bank," essentially because the profits of lending money to buyers are greater than manufacturing. 


     


    Many analysts are saying Apple will be screwed if carriers end phone subsidies (despite its ability to sell Macs & iPads just fine without them), but Apple could get into the business of financing its products directly to consumers, enterprise and governments (especially in mega-deals like the one for schools in Turkey).


     


    That way, Apple could focus on doing what it likes and make money as a banker (perhaps also managing other purchasing as it already does for Apps and media) and relax the margins it has to earn to keep investors from freaking out about its growth/profitability potential.

  • Reply 9 of 30
    I live in Reno..if you really want to find these guys it should be pretty easy. We're a small town and everybody basically knows everybody
  • Reply 10 of 30
    The question remains: where exactly is Braeburn Capital now located ?
    In Switzerland...of course !
  • Reply 11 of 30
    mstonemstone Posts: 11,510member

    Quote:

    Originally Posted by SolipsismX View Post




    Next step is to narrow down the results. Since we have a picture it won't be too hard as there are a lot less than expected. Of course, this assumes he lived in Washoe county and owned a residence. Knowing if he had a wife and what her name is would also help.



    http://www.linkedin.com/pub/steve-johnson-cfa/16/42b/2a6


     


    Found another Linkedin page - says he is retired.


     


    Here is the next guy


     


    Ted Mulvaney (portfolio manager at Braeburn)

  • Reply 12 of 30
    drblankdrblank Posts: 3,383member


    Most wealthy companies and individuals figure out how to avoid paying taxes.  It's how they become rich and stay rich.  Can you blame them?


     


    What sucks is that there are different tax laws in each state to begin with. 

  • Reply 13 of 30
    feynmanfeynman Posts: 1,087member

    Quote:

    Originally Posted by jragosta View Post



    Who cares?



    Apple has $135 B. Who cares where the office that manages it is located?



    However, it does raise one point. The name "Braeburn Capital" suggested to me that Apple could start up an Angel and Venture capital investing group. A few billion dollars would be enough to have a huge impact on the future of computing and should generate a nice future revenue stream for Apple. Typically, these high risk investments offer a significant risk of failure, but the payoff is large enough that angel and venture investors make a fortune - and end up with large equity stakes in fast growing companies.



    Apple should set aside about $5 B for that type of startup capital ventures.


    And then once the company Apple has invested in matures, they will buy them out for pennies on the dollar to hire the talent axe the technology, or incorporate it into their OS.

  • Reply 14 of 30
    galbigalbi Posts: 968member


    The majority of the profits/money isnt in foreign banks or deposited in foreign companies or hedge funds. They are all inside the financial statements and physically in control by Apple. What they are doing is reclassifying these funds as "permanently reinvested" money. This would relieve them from the scrutiny of the IRS.


     


    What they are waiting for is for a tax holiday so that they can immediately transfer their "permanently reinvested" funds in their books and pamper their financials. One thing I'm not certainly, though, is how they classify the interests and dividends generated using the vast amount of this funds. Do they classify that as "permanently reinvested" funds as well?

     

  • Reply 15 of 30
    solipsismxsolipsismx Posts: 19,566member
    mstone wrote: »
    http://www.linkedin.com/pub/steve-johnson-cfa/16/42b/2a6

    Found another Linkedin page - says he is retired.

    Here is the next guy

    Ted Mulvaney (portfolio manager at Braeburn)


    Mulvaney is a great name. Only one listing in the propery reciord search for Theodore Mulvaney. The house is 5200 sqft with 4.25 baths and 4 fireplaces that is just under 11 miles from 730 Sandhill Road. It looks like it was bought in mid-2010 by Ted and his wife for $1.2 million. That's where I'd start.
  • Reply 16 of 30
    patrupatru Posts: 2member


    As an inhabitant of "tax haven Switzerland" I would have to put one little thing straight. While it is true that the Swiss state does not tax capital gains of individual investors this does not apply to investment companies which have to pay regular taxes on their income. I will grant you that even this is probably less than in most countries, but it is most certainly not 0% as otherwise Breaburn would probably be located in Switzerland.


    Quote:

     while tax havens in Luxembourg and Switzerland don't tax capital gains at all.

  • Reply 17 of 30
    robin huberrobin huber Posts: 3,478member


    Now located on a Steve's yacht, cruising permanently outside the three-mile limit. Called Seaorg II and crewed by Scientologists. Like Howard Hughes' Mormon Guard, they know how to be loyal and keep their mouths shut. 

  • Reply 18 of 30
    tylerk36tylerk36 Posts: 1,037member


    They are located Cayman island.

  • Reply 19 of 30

    Quote:

    Originally Posted by jragosta View Post



    Apple should set aside about $5 B for that type of startup capital ventures.


    I wish Apple would set aside a sum like that -- or even a multiple of that -- to create the equivalent of a Bell Labs.


     


    What a great contribution that would be!

  • Reply 20 of 30

    Quote:

    Originally Posted by Patru View Post


    As an inhabitant of "tax haven Switzerland" I would have to put one little thing straight. While it is true that the Swiss state does not tax capital gains of individual investors this does not apply to investment companies which have to pay regular taxes on their income. I will grant you that even this is probably less than in most countries, but it is most certainly not 0% as otherwise Breaburn would probably be located in Switzerland.



    Delaware, USA, is one of the biggest tax havens in the world.... yet, we are fond of blaming others.

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