Warren Buffett‘s Berkshire Hathaway Inc. BRK BRK has increased its stake in Japan’s Mitsubishi Corp. to 10.23% from 9.74%, Mitsubishi MSBHF MTSUY announced Thursday. The move signals deepening confidence in Japanese trading houses after previously negotiating the removal of a 10% investment cap.
Buffett’s Investment Vehicle Deepens Japanese Market Commitment
National Indemnity Company, Berkshire’s wholly-owned subsidiary, executed the stake increase as part of a broader Japanese investment strategy.
Strategic Expansion in Japanese Trading Houses
The conglomerate holds positions in five major trading houses: Mitsubishi Corp., Mitsui & Co. MITSY, Itochu Corp. ITOCY, Marubeni Corp. MARUY and Sumitomo Corp. SSUMY.
These firms import essential commodities, including oil, gas, iron ore, and copper, while supporting Japan’s machinery exports and electronics sectors.
Low-Cost Funding Strategy Drives Returns
Berkshire’s Japanese strategy leverages cheap yen debt, borrowing at roughly 0.5% while earning 7-8% total shareholder yields from the trading houses. Investment manager Mohnish Pabrai describes this as generating “infinite returns” since dividend income exceeded borrowing costs before share price appreciation.
Market Performance and Valuation Appeal
The trading houses trade at single-digit price-earnings multiples against steady commodity-linked cash flows, contrasting with stretched U.S. valuations. Berkshire’s Japan holdings reached $23.5 billion market value by late 2024, up from the original $6 billion investment revealed in August 2020.
Buffett discovered these opportunities through a Japanese company handbook, demonstrating his value-investing approach in international markets. The “Oracle of Omaha” has maintained Berkshire’s record $334.2 billion cash position while selectively increasing foreign exposure.
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