Wednesday, May 18, 2011

Berkshire Hathaway Buys Stake In Mastercard

NEW YORK (Dow Jones)--Warren Buffett's Berkshire Hathaway Inc. (BRKA, BRKB) took a stake in MasterCard Inc. (MA) in the first quarter as a new investment manager took over a portion of the company's $115 billion portfolio.
Berkshire disclosed the holding of 216,000 MasterCard shares in a regulatory filing Monday that shows its U.S. stock holdings as of March 31. The holding is valued at about $60 million based on Monday's closing share price.
But Berkshire also said it had omitted some information on its holdings in the filing, an action some investment managers take when they're building a new position.
The addition of MasterCard to the portfolio could be the work of Todd Combs, the former hedge-fund manager who was tapped by Buffett to manage a portfolio of about $2 billion to $3 billion at Berkshire. Combs was selected as the company prepares for the day the 80-year-old Buffett will no longer run Berkshire.
Berkshire also disclosed a reduced stake in oil producer ConocoPhillips (COP), trimming the holding less than 1% to about 29 million shares.
All told, Berkshire bought $834 million of equity securities in the quarter, and sold just $9 million of equities, according to the company's quarterly earnings report filed earlier this month.
Combs's $400 million hedge fund, called Castle Point, favored investments in financial stocks.
Buffett's company, like other firms that control an investment portfolio of more than $100 million, is required to report its U.S. stock holdings 45 days after the end of a given quarter.
News about Berkshire's stock picks has the power to move the shares of the newly disclosed companies as money managers look to mimic the investment success of the "Oracle of Omaha." MasterCard rose 1% to $281.99 in after-hours trading on Monday.
But Buffett had long warned that some of the moves in the portfolio are the result of decisions made by Lou Simpson, the investment manager at Berkshire-owned car insurer Geico Corp.
Simpson retired last year, and Berkshire exited from many of its smaller stock positions in the second half of 2010. Castle Point also spent the last few months of last year selling off its positions as Combs prepared to start his job at Berkshire.
The value of the stocks listed in Monday's filing--which includes only U.S. holdings--was $53.6 billion as of March 31, up slightly from the $52.6 billion Berkshire listed as of Dec. 31.


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