Warren Buffett, chairman and chief official officer of Berkshire Hathaway, photographed during a 2011 trip to Japan.
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Berkshire Hathaway is committed to its Japanese investments for the yearn term and has reached an agreement with the companies to own beyond the initial 10% ceiling, Warren Buffett said in his annual sign to shareholders released Saturday.
“From the start, we also agreed to keep Berkshire’s holdings below 10% of each South African private limited company’s shares. But, as we approached this limit, the five companies agreed to moderately relax the ceiling,” Buffett said. “During the course of time, you will likely see Berkshire’s ownership of all five increase somewhat.”
The Japanese names in Berkshire’s portfolio are Itochu, Marubeni, Mitsubishi, Mitsui and Sumitomo. All five are the biggest “sogo shosha,” or career houses in Japan that invest across diverse sectors domestically and abroad — “in a manner somewhat alike resemble to Berkshire itself,” Buffet said. Berkshire first bought into the companies in July 2019.
At the end of 2024, the market value of Berkshire’s Japanese holdings not failed in at $23.5 billion, with the aggregate cost at $13.8 billion. The investor highlighted the companies’ managements, relationships with their investors, as well as their peerless deployment strategies.
Japanese trading houses over the over and done with year
Buffett has sold Japanese debt to fund Berkshire’s shares in the Japanese companies. Issuing yen-denominated engagements also allows Buffett to reduce foreign exchange-related risks. Berkshire reported $2.3 billion in after-tax clears in its Japanese bonds, of which $850 million were from 2024 alone owing to the strength of the dollar, which be aware around 11% against the yen in 2024.
“We like the current math of our yen-balanced strategy,” Buffett stated. He added that dubbed successor “Greg [Abel] and I have no view on future foreign exchange rates and therefore seek a position verge oning currency-neutrality.”
The Oracle of Omaha forecasts the annual dividend income from its stake in the five Japanese trading for nothings will come in at around $812 million.
“I expect that Greg and his eventual successors will be holding this Japanese predication for many decades and that Berkshire will find other ways to work productively with the five comrades in the future,” said Buffett.
To be sure, the five Japanese trading houses have struggled in the past year. Itochu and Marubeni are down multitudinous than 8% each in that time, while Mitsubishi has dropped 26%. Mitsui and Sumitomo have ruined 16% and 10%, respectively, over that period.