Berkshire boosts 3 Japanese trading house stakes above 10% under Abel

Berkshire Hathaway raised its stakes in three Japanese trading houses above 10% in the second quarter, regulatory filings show.

"I expect that Greg and his eventual successors will be holding this Japanese position for many decades," Warren Buffett, chairman of Berkshire Hathaway, wrote in his February 2025 shareholder letter.

Berkshire's Mitsubishi stake climbed to 11.1% as of April 30, while its Sumitomo and Marubeni holdings each rose above 10% by mid-May, filings with Japanese regulators show. The Sumitomo stake reached 10.3% as of May 12, up from 9.3%. The three companies are part of a group of five Japanese trading houses — including Itochu and Mitsui — that Berkshire began buying in 2019.

The buying extends a strategy that has already generated significant returns. Berkshire's five Japanese positions cost $15.4 billion and were worth $35.4 billion at the end of 2025, according to the annual report. The companies paid Berkshire a combined $862 million in dividends last year, a yield of about 5.6% on original cost.

Mitsubishi is Berkshire's largest Japanese holding. The stake cost $4.2 billion and was valued at $9.2 billion at year-end 2025, generating $273 million in dividends — the largest payout of the five. Marubeni has been the best performer: a $1.6 billion cost basis had grown to about $4.5 billion, nearly tripling, with $105 million in dividends. The Sumitomo position cost $1.9 billion and stood at $4.0 billion, paying $102 million.

The funding structure makes the math more attractive. Berkshire has borrowed in yen at an average interest cost of 1.2%, roughly matching the amount invested. The dividend income covers borrowing costs several times over before accounting for share-price appreciation. Berkshire issued another 272.3 billion yen of senior notes in April.

Berkshire originally agreed to keep its ownership of each company below 10%, but Buffett wrote in February that the five companies agreed to relax the ceiling moderately as Berkshire approached the limit. In his first annual letter as CEO, Greg Abel described the Japanese investments as "comparable to our major U.S. holdings in importance and long-term value creation opportunity."

For Berkshire shareholders, the buying signals continuity. Abel's first notable moves as CEO were not a large acquisition or a bet on artificial intelligence. They were more of what already works: profitable conglomerates bought at low prices, funded with cheap fixed-rate debt. Investors will watch for further increases in the second half of the year as Berkshire deploys its cash position.

This article is for informational purposes only and does not constitute investment advice.