Abrams Capital Put 38% of a $5.7B Portfolio Into One Aerospace Stock While Building a $1.3B Auto Dealership Empire: Inside the Klarman Protégé's Q4 2025 Conviction Bet

TL;DR

• LOAR Holdings at 38.4% of portfolio ($2.18B) — one of the most extreme single-stock concentrations among all whale funds. 32 million shares unchanged from Q3.
• $1.33B auto dealership empire: New positions in Lithia Motors ($828M, 14.6%) and Asbury Automotive ($501M, 8.8%) — the #1 and #2 US auto dealership chains
• 3 stocks = 62% of portfolio: LOAR + LAD + ABG represent nearly two-thirds of a $5.67B portfolio across just 12 holdings
• AUM rose 22% from $4.65B to $5.67B as holdings expanded from 8 to 12
• Massive unrealized gains: Average cost basis on LAD is ~$115 (current $301, +162%), ABG ~$65 (current $227, +249%), LOAR ~$54 (current $67, +24%)
• Exited Circle Internet Group (CRCL) — sold all 275K shares
• Trimmed Meta and Alphabet while keeping LOAR shares completely unchanged
• U-Haul entry: $154M across both share classes — adding moving/storage infrastructure to the auto/transport thesis

The Most Concentrated Portfolio in Whale Territory

Abrams Capital Management doesn’t do diversification. David Abrams, who spent a decade learning from Seth Klarman at Baupost before founding his own firm in 1999, runs one of the most concentrated institutional portfolios in existence: $5.67B across just 12 holdings, with a single stock — LOAR Holdings — consuming 38.4% of the entire portfolio.

To put that in context: most institutional investors consider a 5% position “high conviction.” Abrams has nearly eight times that in one aerospace components maker. And he didn’t sell a single share in Q4 despite the stock declining from its Q3 levels. That’s not a position — it’s an identity.

Filing Snapshot

Metric	Q3 2025	Q4 2025	Change
13F AUM	$4.65B	$5.67B	+$1.02B (+21.9%)
Holdings Count	8	12	+4 new positions
Top-1 Weight	55.1% (LOAR)	38.4% (LOAR)	−16.7pp
Top-3 Weight	77.8%	63.6%	−14.2pp
Filing Date	Nov 7, 2025	Feb 13, 2026	—
Report Period	Sep 30, 2025	Dec 31, 2025	—

The $2.18 Billion LOAR Bet: Why 38% in One Stock?

LOAR Holdings (LOAR) is a specialty aerospace and defense components manufacturer based in White Plains, New York. The company designs and makes niche components — airframe parts, braking systems, flight controls, de-ice equipment, engineered materials — for leading aerospace OEMs and defense contractors worldwide. Think of it as a smaller, faster-growing cousin of TransDigm (TDG), the $75B aerospace roll-up that pioneered the “acquire-and-optimize” model in this space.

LOAR’s Q3 2025 results were record-breaking:

• Net sales of $126.8M, up 22.4% YoY
• Adjusted EBITDA of $49.1M, up 28.9% YoY
• Adjusted EBITDA margin of 38.7% (up from 36.8%)
• Net income surged 219% YoY to $27.6M
• The company raised its 2025 outlook and issued bullish 2026 guidance

David Abrams holds 32,050,240 shares — approximately 34% of LOAR’s ~94M total shares outstanding. He is by far the largest shareholder. His average cost basis is approximately $54/share; the stock closed Q4 at $68. That’s a 24% gain, but the real thesis isn’t about the current stock price — it’s about LOAR’s long runway of acquisitions, defense tailwinds, and margin expansion. The company completed two acquisitions in late 2025 alone (Harper Engineering and LMB Fans & Motors), and management sees “record” 2026 ahead with rising airframe production rates and growing defense demand.

Why doesn’t Abrams trim? Because this is how he invests. Abrams Capital describes itself as “opportunistic” with a “fundamental, value-oriented approach.” The firm invests for the long term in a concentrated number of holdings. When you own 34% of a company and the business is compounding at 20%+ annual revenue growth with 39% EBITDA margins, you hold.

The $1.33 Billion Auto Dealership Bet: LAD + ABG

The Q4 2025 filing’s biggest surprise isn’t LOAR — it’s the massive new auto dealership empire that appeared overnight.

Lithia Motors (LAD) — $827.7M (14.6%): Lithia is the largest auto dealership chain in the United States by revenue. The company has been aggressively acquiring dealerships nationwide, building a “coast-to-coast” platform under the Driveway brand for online vehicle sales. At 2,490,534 shares and a $332 average reported price, this is a brand-new position that instantly became Abrams’ second-largest holding. Lithia trades at just 9.3x trailing earnings with a $7.3B market cap — cheap for a company generating record revenues and expanding aggressively through acquisitions.

Asbury Automotive (ABG) — $501.2M (8.8%): Asbury is the second-largest US auto dealership chain, with over 150 dealerships across the country. Like Lithia, Asbury has been rolling up dealerships and expanding its geographic footprint. At 2,155,492 shares, this position also appeared for the first time in Q4. Asbury trades at a similar ~9x PE with a $4.5B market cap.

Combined, LAD + ABG represent $1.33B and 23.4% of the portfolio. This isn’t a toe-in-the-water position — it’s a thesis. Abrams is betting that the auto dealership consolidation wave still has massive runway. The US has roughly 18,000 franchised dealerships, and the top 10 public groups still control less than 15% of the market. At single-digit PE multiples, these consolidators can acquire smaller private dealerships at attractive prices and bolt them onto their existing platforms with minimal friction.

The timing matters too: auto dealership stocks have been under pressure in 2025, with LAD down ~21% from its 52-week high. Abrams is buying the dip on consolidation leaders, which is exactly the kind of countercyclical value play you’d expect from a Klarman disciple.

Every Position in the Portfolio

Stock	Q4 Value	Weight	Shares	QoQ Change
LOAR Holdings (LOAR)	$2,179.4M	38.41%	32,050,240	Unchanged
Lithia Motors (LAD)	$827.7M	14.59%	2,490,534	NEW
Alphabet (GOOGL)	$599.9M	10.57%	1,916,630	−9.8% shares
Somnigroup Intl (SGI)	$518.2M	9.13%	5,804,136	−0.7% shares
Asbury Automotive (ABG)	$501.2M	8.83%	2,155,492	NEW
Coupang (CPNG)	$307.1M	5.41%	13,017,964	Unchanged
Willis Towers Watson (WTW)	$236.8M	4.17%	720,779	Unchanged
Meta Platforms (META)	$214.6M	3.78%	325,155	−17.6% shares
U-Haul Class B (UHAL/B)	$152.0M	2.68%	3,251,469	NEW
Energy Transfer (ET)	$100.8M	1.78%	6,115,417	−1.5% shares
Nuvation Bio (NUVB)	$34.2M	0.60%	3,811,513	Unchanged
U-Haul Class A (UHAL)	$1.8M	0.03%	36,401	NEW

The U-Haul Addition: Completing the Physical Infrastructure Thesis

The $154M U-Haul position (across both share classes) is a smaller but telling addition. U-Haul isn’t just a truck rental company — it’s one of the largest self-storage REITs in North America, with over 90 million square feet of storage space across 2,200+ locations. The company also operates a fleet of 186,000 trucks, 128,000 trailers, and 46,000 tow dollies.

Taken together with the auto dealership positions, Abrams appears to be building a physical infrastructure thesis: companies that own hard-to-replicate distribution networks (dealership lots, storage facilities, truck fleets) in fragmented industries where consolidation creates value. These are businesses where AI doesn’t disintermediate the asset base — you still need the physical locations and vehicles.

What Abrams Trimmed (and Why It Doesn’t Matter)

Abrams trimmed three positions in Q4:

• Alphabet (GOOGL): Sold 207,500 shares (−9.8%). Still a $600M position at 10.6% of portfolio. This looks like routine portfolio management as new positions absorbed capital.
• Meta (META): Sold 69,600 shares (−17.6%). At $215M and 3.8% weight, this is a relatively small position for a $5.7B portfolio. Abrams’s average cost is ~$137; he’s sitting on a +370% gain.
• Somnigroup International (SGI): Trimmed 41,110 shares (−0.7%). Negligible. The former Tempur Sealy remains a $518M core holding at 9.1%.

The key observation: LOAR shares were completely unchanged at 32,050,240. In a portfolio where Abrams trimmed big tech winners to fund auto dealership bets, LOAR remained untouched. That’s the clearest signal of conviction in this filing.

The Concentration Math: 55% Down to 38% Without Selling

LOAR went from 55.1% of the portfolio in Q3 to 38.4% in Q4 — a 16.7 percentage point decline. But Abrams didn’t sell a single share. The dilution came from two sources:

1. LOAR’s price declined from ~$80 to ~$68 during Q4, reducing the position’s dollar value from $2.56B to $2.18B
2. New capital was deployed into LAD, ABG, U-Haul, and others, expanding the total portfolio denominator from $4.65B to $5.67B

The combination mechanically reduced LOAR’s weight. But 38.4% is still extraordinary — more than three times the next largest position. And if LOAR rallies back to its 52-week high of ~$100, that position alone would be worth $3.2B and could push back above 45% weight. Abrams is clearly comfortable with this level of concentration.

Historical Context: The Steady Compounder

Abrams Capital’s AUM trajectory tells a different story than the volatile hedge funds that dominate filing season coverage. While funds like ValueAct and Lone Pine saw dramatic QoQ swings, Abrams has compounded steadily from $2.80B (Q4 2022 trough) to $5.67B over 8 quarters — a 102% increase driven almost entirely by position appreciation and selective new entries.

The current $5.67B is below the Q3 2024 peak of $6.23B, largely because LOAR has pulled back from its highs. But the underlying portfolio construction hasn’t changed: ultra-concentrated, long-duration, deep value orientation. Abrams doesn’t trade. He owns businesses.

What Analysts Might Misread

1. “38% in one stock is reckless risk management”

By institutional standards, yes. But Abrams isn’t a typical institution. He runs concentrated capital with long lockups, and he understands LOAR better than almost any outside investor — he owns 34% of the company. This is closer to a private equity ownership stake that happens to be publicly traded. The “risk” is really a bet that Abrams knows this business better than the market prices it.

2. “Auto dealerships are a dying business in the EV era”

The opposite thesis: dealerships are becoming more valuable as EVs require more service complexity, and the fragmented market is consolidating rapidly. Lithia and Asbury are acquiring private dealerships at 3-5x EBITDA and integrating them into platforms that generate 9-10% operating margins. At single-digit PEs, they’re essentially being valued as zero-growth businesses when they’re actually growing revenue double-digits through M&A.

3. “The Meta and Alphabet trims signal Abrams is bearish on big tech”

Context matters: Abrams’s average cost on META is ~$137 versus a current price near $640 — a +370% gain. The trim is profit-taking to fund the auto dealership thesis, not a macro call. Both GOOGL and META remain significant positions at 10.6% and 3.8% respectively.

Frequently Asked Questions

Who is David Abrams and what is his investment approach?

David Abrams is the founder and CEO of Abrams Capital Management, a Boston-based hedge fund he established in 1999 after spending a decade at Baupost Group under legendary value investor Seth Klarman. Abrams Capital follows a concentrated, long-term, fundamental value approach. The firm typically holds 8-15 positions, invests across stocks, debt, and distressed assets, and is known for extremely low portfolio turnover.

Why does Abrams Capital have 38% of its portfolio in LOAR Holdings?

Abrams built this position over time as LOAR’s largest shareholder (~34% of shares outstanding). LOAR is a specialty aerospace and defense components manufacturer with a TransDigm-like business model: niche, sole-source products with high switching costs and 39% EBITDA margins. The company is growing revenue 22%+ annually through organic demand and acquisitions, with management guiding for “record” 2026 results. At ~$68/share (with analyst targets averaging $87-93), Abrams clearly sees significant upside.

What is the auto dealership thesis behind the Lithia and Asbury positions?

Abrams deployed $1.33B — 23.4% of his portfolio — into the two largest US auto dealership chains. The thesis: the US has ~18,000 franchised dealerships but the top 10 public groups control less than 15% of the market. Lithia and Asbury are rolling up smaller private dealers at attractive multiples while trading at just 9x earnings. It’s a classic Klarman-school value play: buy consolidation leaders in fragmented industries at depressed valuations.

How does Abrams Capital’s concentration compare to other whale funds?

At 38.4% in a single stock, Abrams is one of the most concentrated whale portfolios tracked by 13F Insight. For comparison, Berkshire Hathaway has ~30% in Apple, Pershing Square runs ~8 positions at 10-15% weights, and Thoma Bravo had 95% in SailPoint. Abrams is in rare territory but his approach is consistent — he’s run concentrated portfolios for 25+ years.

Why did LOAR’s portfolio weight drop from 55% to 38% without any shares sold?

Two factors: LOAR’s stock price declined from ~$80 to ~$68 during Q4, reducing the position’s dollar value by $385M. Simultaneously, Abrams deployed over $1.5B into new positions (LAD, ABG, U-Haul), expanding the total portfolio from $4.65B to $5.67B. The combination diluted LOAR’s weight mechanically without any selling.