Berkshire Increases Stake in 5 Japanese Trading Companies to 8.5%

Text size

Berkshire Hathaway

increased its stakes in five Japanese trading companies to an average of 8.5% and Berkshire said it hopes to increase those interests to 9.9%.

Berkshire Hathaway

(Ticker: BRK.B) now owns about $20 billion of the five companies, Barrons estimates, and these investments have been among the most successful for Berkshire CEO Warren Buffett in recent years.

Berkshire initially disclosed its holdings in the five companies –

Itochu

(ITOCY),

Marubeni

(MARUY),

Mitsubishi

(MSBHF),

mitsui

(MITSY) and

Sumitomo

(SSUMY) end of August 2020 and the five stocks more than doubled on average.

The average gain is around 170%, according to our estimates, and Berkshire effectively made all of these increases because it hedged its currency exposure. When Berkshire initially disclosed the stakes, its stake in each of the five was around 5% and the total value was around $6 billion.

All five stocks have been strong this year, rising with the Japanese stock market, with the largest of the five, Mitsubishi, gaining about 50% so far in 2023 and having a market value of $70 billion.

In a Monday press release, Berkshire said Buffett “has committed the company to only make purchases up to a 9.9% stake in any of the five investments.” The company will not make any purchases beyond this point unless specifically authorized by the issuing entity’s board of directors.

These are the only publicly traded investments Berkshire holds in Japan, the company said. Their total value “substantially exceeds that of public stocks held by Berkshire in any other country” outside the United States, the company said.

Berkshire added that Buffett and Greg Abel, Berkshire’s vice chairman and head of the company’s broad non-insurance operations, “continue to be excited about the investments and hope to eventually own 9.9% of each of the five companies”.

Buffett and Abel traveled to Japan in April and met with the heads of the five companies and said the stakes had risen to around 7.4%.

Berkshire’s Class B shares are up 9.5% this year, lagging the

S&P500
This is a gain of 14.9%.

Write to Andrew Bary at andrew.bary@barrons.com