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Berkshire Hathaway: How Hedge Funds Are Investing

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This year, Berkshire Hathaway (BRK.A)(BRK.B) Class A and Class B stock has risen 7.3%, lagging behind the S&P 500 by a wide margin. Legendary investor Warren Buffett is Berkshire’s chairman and CEO. Meanwhile, Greenlight Capital has more than doubled Berkshire’s gain, rising 19.3%. For more on the investment company, read David Einhorn’s Greenlight Capital: Analyzing Its 13F. Let’s look at institutional investments in Berkshire.

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Institutional investors that raised their stake

The Bill & Melinda Gates Foundation added the most Berkshire Class B shares in the third quarter. It added around 7.8 million shares, and the Class B shares comprised 53.8% of its total portfolio. The Gates Foundation has held Berkshire Class B shares since Q3 2016. In July, Buffett donated shares to the Gates Foundation, as well as other charities.

In the third quarter, BlackRock was the second-largest buyer of Berkshire Class B shares, increasing its holdings by 2%. At the end of the third quarter, it owned 109.2 million Class B shares. The shares comprised about 1% of BlackRock’s portfolio of publicly traded securities, forming its ninth-largest holding.

The Vanguard Group added around 1.7 million Berkshire Class B shares in the third quarter, bringing its holding to around 141 million shares. It was the stock’s largest institutional holder. For Joseph R. Weiss, LLC, Berkshire Class B shares formed 51.2% of its portfolio.

Top sellers

In the third quarter, Magellan Asset Management sold around 4.8 million Berkshire Class B shares, reducing its holdings by almost 100%. It has held the stock since Q3 2018.

Meanwhile, JPMorgan Chase and Deutsche Bank sold 1.4 million and 0.9 million Berkshire Class B shares, respectively, in Q3. In the quarter, Renaissance Technology was the fifth-largest seller of Berkshire Class B shares. To know more about the company’s holdings, read Renaissance Technologies: Analyzing Its Q3 13F.

Is Berkshire Hathaway undervalued?

Pershing Square CEO Bill Ackman believes Berkshire is undervalued. In fact, in Q3, Berkshire Class B shares were Pershing’s only buy. It increased its Berkshire holdings by 14% to bring them to 13.3% of its total portfolio of publicly traded securities.

Investors have criticized Buffett for not using Berkshire’s growing cash pile. To learn more, read Buffett’s Cash Mystery: Morgan Stanley Figured It Out.

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