By Jonathan Stempel
NEW YORK (Reuters) – Warren Buffett stated on Saturday that his conglomerate Berkshire Hathaway will doubtless improve its possession within the 5 Japanese buying and selling homes it holds.
In his annual letter to Berkshire shareholders, the billionaire investor stated Itochu, Marubeni, Mitsubishi, Mitsui and Sumitomo agreed to “reasonably calm down” limits that capped Berkshire’s possession stakes beneath 10%.
Berkshire’s investments within the corporations totaled $23.5 billion on the finish of 2024.
“Over time, you’ll doubtless see Berkshire’s possession of all 5 improve considerably,” Buffett wrote.
The 94-year-old Buffett additionally stated he and Berkshire Vice Chairman Greg Abel, his designated successor as chief govt, are investing for the “very long run.”
“I anticipate that Greg and his eventual successors shall be holding this Japanese place for a lot of a long time and that Berkshire will discover different methods to work productively with the 5 corporations,” Buffett wrote.
Generally known as “sogo shosha,” Japanese buying and selling homes commerce in all kinds of supplies, merchandise and meals, typically serving as intermediaries, and supply logistical help.
They’re additionally deeply concerned in the actual economic system in such areas as commodities, transport and metal.
Berkshire started investing within the buying and selling homes in 2019, drawn by their funds in comparison with their low inventory costs, and revealed 5% possession stakes on Buffett’s ninetieth birthday in August 2020.
Buffett prefers to keep away from companies he says he doesn’t perceive.
He advised Nikkei in 2023 that the buying and selling homes are “actually a lot much like Berkshire,” the Omaha, Nebraska-based conglomerate he has led since 1965.
Berkshire spent $13.8 billion on its present holdings and expects $812 million of dividend revenue in 2025, Buffett stated within the shareholder letter.
“This was a great worth funding when others could have checked out them as worth traps,” stated Cathy Seifert, an analyst at CFRA Analysis who charges Berkshire a “maintain.”
She stated Buffett’s feedback present Berkshire has a constructive working relationship with the buying and selling homes.
Berkshire has additionally issued fixed-rate, yen-denominated bonds, however Buffett stated it seeks “foreign money neutrality” and has no view on future foreign money adjustments.
The conglomerate on Saturday reported $1.15 billion of overseas foreign money beneficial properties after taxes in 2024.
(Reporting by Jonathan Stempel, in New York; writing by Carolina Mandl, in New York; modifying by Rod Nickel)