Factbox: Warren Buffett's investments in financial firms
Last updated on: 24 March,2023 11:27 am
Buffett has been known to invest during difficult periods for the market.
NEW YORK (Reuters) – Berkshire Hathaway's Warren Buffett has been in discussions with senior Biden administration officials about the banking crisis, leading some to speculate that Buffett would consider investing in the sector following the collapse of Silicon Valley Bank.
Buffett has been known to invest during difficult periods for the market, famously buying a stake in Goldman Sachs during the financial crisis and in Bank of America when that bank ran into trouble a few years later.
Here is history on Buffett's involvement with banks and current holdings in his investment portfolio.
BUFFETT ENGAGEMENTS WITH BANKING
Berkshire began investing in Wells Fargo & Co in 1989, building an eventual $32-billion stake, but exited that stake in the first quarter of 2022 amid a series of scandals for the bank.
Berkshire injected $5 billion into Goldman Sachs Group Inc in September 2008 at the height of the global financial crisis in a vote of confidence for the Wall Street bank.
The investment gave Berkshire preferred stock that paid a 10% along with warrants to pay $5 billion for 43.5 million Goldman shares at $115 each.
Berkshire invested another $5 billion in Bank of America in August 2011, when investors feared that the bank could run short of capital because of losses from litigation and its mortgage business following the disastrous acquisition of Countrywide Financial Corp.
That investment gave Berkshire preferred stock with a 6% dividend and warrants to pay $5 billion for 700 million Bank of America shares at $7.14 each; Berkshire later made a $11.5 billion profit on that investment in 2017, not including the dividend payouts.
The following are Berkshire's disclosed holdings in US-listed banks and financial services companies as of Dec. 31, 2022:
--------------------------------------------------------- Ally Financial Inc $729 million American Express Co *$22.4 billion Aon Plc $1.32 billion Bank of America Corp *$34.2 billion Bank of New York Mellon Corp $1.15 billion Citigroup Inc $2.5 billion Globe Life Inc $766 million Jefferies Financial Group $15 million Markel Corp $616 million Marsh & McLennan Cos $67 million MasterCard Inc $1.39 billion Moody's Corp *$6.87 billion Nu Holdings Ltd $436 million US Bancorp $291 million Visa Inc $1.72 billion * largest shareholder
--------------------------------------------------------------
OTHER MATTERS
Bank of New York Mellon Corp is listed as trustee under an automatic shelf registration that allows Berkshire to periodically sell debt securities.
Berkshire owns about 20% of American Express Co. It has an agreement with the U.S. Federal Reserve to keep the stake passive, meaning Berkshire will not seek to influence how the company operates, an agreement dating from 1995.
Berkshire has financial services investments in other countries. They include stakes in Brazilian digital lender Nubank, whose US-listed shares are known as Nu Holdings, and more than 5% stakes in five Japanese trading houses: Itochu Corp, Marubeni Corp, Mitsubishi Corp, Mitsui & Co and Sumitomo Corp.