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Inside Heard Capital’s High-Conviction Portfolio: The 10 Stocks William Heard Is Betting Big On
Some hedge funds chase hype. Others compound capital based on fundamentals and focus on the bottom-up. Heard Capital is firmly in the second camp.
William Heard’s most recently filed Q1 2025 13F reveals a laser-focused portfolio built on structural themes: AI infrastructure, defense technology, data monopolies, and alternative asset management.
With over 85% of capital concentrated in just 10 names, this isn’t a tech momentum basket or a Fed barometer—it’s a blueprint for fundamental compounding in high-barrier industries.
Here’s my full breakdown of Heard Capital’s top 10 holdings—and why each one earns a coveted seat in this elite Chicago-based hedge fund portfolio.
The Top 10 Holdings of Heard Capital, Analyzed
1. TransDigm Group (TDG)
Position Size: 12.45%
Sector: Aerospace Components
Why Heard Owns It:
- Monopoly-like control over proprietary aircraft parts (80% proprietary, 50% sole-source).
- Massive pricing power with escalators built into contracts.
- 45%+ EBITDA margins and massive free cash flow.
- Seen as a “toll booth” for aerospace—a hardware business that acts like software.
Strategic Fit: Defense-tilted industrial compounder with low cyclicality and high returns.
2. Fair Isaac Corp (FICO)
Position Size: 10.44%
Sector: Fintech / Data Licensing
Why Heard Owns It:
- Owns the FICO score, used in 90% of U.S. consumer lending decisions.
- High-margin, licensing-heavy revenue model (software-like).
- Zero realistic competition, embedded in financial infrastructure.
Strategic Fit: A hidden software monopoly with extreme pricing power and low capital intensity.
3. American Tower (AMT)
Position Size: 10.36%
Sector: Digital Infrastructure / REIT
Why Heard Owns It:
- Owns and leases telecom towers globally—recurring, inflation-linked revenue.
- Structural tailwinds from 5G, mobile data, and cloud traffic.
- Long-term contracts with built-in escalators.
Strategic Fit: A TMT-adjacent REIT delivering infrastructure yield with tech-level growth drivers.
4. Blackstone (BX)
Position Size: 9.14%
Sector: Private Equity / Alternatives
Why Heard Owns It:
- Scalable, asset-light fee business across PE, credit, and real estate.
- Largest alt manager in the world; expanding into insurance and private credit.
- Sticky AUM with rising fee-based revenue.
Strategic Fit: Cash-compounding, finance-as-a-platform play—Goldman meets Salesforce.
5. Apollo Global (APO)
Position Size: 9.09%
Sector: Private Credit / Alternatives
Why Heard Owns It:
- Credit-focused twin to BX, with massive scale in retirement/annuities via Athene.
- Benefits from rate volatility and structural demand for private yield.
- Efficient allocator with rising earnings power and embedded growth.
Strategic Fit: Counter-cyclical, capital-efficient exposure to insurance-adjacent credit markets.
6. Adobe (ADBE)
Position Size: 8.92%
Sector: Enterprise Software / AI
Why Heard Owns It:
- Dominates creative suite software—Photoshop, Acrobat, Illustrator.
- Transitioned to fully recurring SaaS revenue.
- Embedded generative AI tools (Firefly) create monetization upside.
Strategic Fit: Software staple with AI-enhanced upsell power and pricing insulation.
7. Lam Research (LRCX)
Position Size: 8.23%
Sector: Semiconductor Equipment
Why Heard Owns It:
- Provides critical tools (etch, deposition) for leading-edge chip fabrication.
- Beneficiary of AI chip boom, CHIPS Act tailwinds, and global foundry expansion.
- High-margin, capital-returning cycle winner.
Strategic Fit: Picks-and-shovels AI play with embedded leverage to future compute demand.
8. American Express (AXP)
Position Size: 6.43%
Sector: Consumer Finance / Fintech
Why Heard Owns It:
- Premium cardholder base with high spending resilience.
- Integrated ecosystem of lending, travel, and SMB solutions.
- Expanding digital wallet and fintech capabilities.
Strategic Fit: Fintech-adjacent, rate-sensitive cash machine with optional growth levers.
9. AeroVironment (AVAV)
Position Size: 5.94%
Sector: Defense Tech / Drones
Why Heard Owns It:
- Tactical drones used in U.S. and Ukraine military applications, others as well.
- AI-enabled defense systems gaining strategic value.
- Rising global defense budgets = growing addressable market.
Strategic Fit: Lower-key, government-backed growth name with real-world edge.
10. Palantir Technologies (PLTR)
Position Size: 5.0%
Sector: AI / Government Software
Why Heard Owns It:
- Defense-first AI platform (Gotham) with sticky contracts.
- Explosive narrative and real profitability emerging.
- Strong U.S. government tailwinds + enterprise AI adoption.
Strategic Fit: High-beta AI name balancing narrative momentum with cash-flow inflection.
Final Portfolio Themes:
Heard’s top 10 holdings aren’t just strong stocks—they reflect a deliberate, thematic portfolio strategy:
| Theme | Holdings |
| AI Infrastructure | Lam Research, Palantir, Adobe, Equinix |
| Defense Technology | AeroVironment, Palantir |
| Data Monopolies | Fair Isaac, Adobe |
| Alt Asset Platforms | Blackstone, Apollo, Ares |
| Digital Infrastructure | American Tower, Equinix |
| Cash Compounders | TransDigm, FICO, Blackstone, APO, AXP |
DISCLAIMER: This analysis of the aforementioned stock security is in no way to be construed, understood, or seen as formal, professional, or any other form of investment advice. We are simply expressing our opinions regarding a publicly traded entity.
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