Buffett's company is now among the biggest investments of a Chinese investor called 'The Chinese Warren Buffett'

 

Investor dubbed 'The Chinese Warren Buffett' announced a $245 million stake in Berkshire Hathaway - and now counts Buffett's company among his biggest investments

This week, a longtime associate of Warren Buffett and Charlie Munger announced he has invested $245 million in Berkshire Hathaway. The purchase shows his confidence in the investing duo and appreciation for the company.

Securities and Exchange Commission filings show Li Lu's Himalaya Capital Management purchased nearly 900,000 Berkshire shares last quarter.

Berkshire made up 11% of Himalaya's $2.1 billion portfolio, making it the firm's third-most valuable stock.

In 1993, after attending a lecture by Buffett at Columbia University, Li decided to become a professional investor.Muger, the conglomerate's vice-chairman, called Li "the Chinese Warren Buffett" in 2019, adding that Li is the only outsider he has ever trusted with his money.

Li introduced Munger to BYD, the Chinese electric-vehicle company that has been one of Berkshire's best investments in the last decade. Munger stated in 2010 he fully expected Li to eventually take a leadership role at Berkshire.

Hemalaya sold 15% of its BYD shares for $320 million in July. Given his new stake in Berkshire, it is possible he is reinvesting some of those profits in Berkshire.

Apple and Bank of America - the two largest holdings in Buffett's roughly $300 billion stock portfolio - are among the fund's handful of holdings.

He nevertheless listed Berkshire in its portfolio for the first time since it began filing quarterly updates with the SEC in early 2017. It's unclear why Li decided to buy the stock after all this time, especially since it's climbed 25% this year and trades close to its December high.

Having only deployed a portion of Berkshire's immense cash reserves on cut-price stocks in 2020 when a pandemic hit the stock market, Buffett will likely appreciate Li's vote of confidence.

Private equity firms and special-purpose acquisition companies (SPACs) have continued to price the investor out of acquisitions since then, as many assets are approaching record highs.