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Warren Buffett's Berkshire Hathaway reveals $6 billion investment in 5 Japanese giants – Markets Insider



Bill Pugliano/Getty

  • Warren Buffett’s Berkshire Hathaway disclosed a $6 billion bet on five of Japan’s biggest trading companies in a press release on Sunday night.
  • The billionaire investor’s company revealed that it owns just over 5% of Mitsubishi, Mitsui, Itochu, Marubeni, and Sumitomo.
  • “I am delighted to have Berkshire Hathaway participate in the future of Japan and the five companies we have chosen for investment,” Buffett said in the statement.
  • Visit Business Insider’s homepage for more stories.

Warren Buffett marked his 90th birthday on Sunday by revealing a $6 billion investment in five of Japan’s largest trading companies.

The famed investor’s Berkshire Hathaway conglomerate has built passive stakes of just over 5% in each of Itochu, Marubeni, Mitsubishi, Mitsui, and Sumitomo over the past 12 months, it said in a press release. Its National Indemnity subsidiary made the investments and will officially notify Japanese regulators of the positions when trading begins on Monday.

“I am delighted to have Berkshire Hathaway participate in the future of Japan and the five companies we have chosen for investment,” Buffett said in the press release.

“The five major trading companies have many joint ventures throughout the world and are likely to have more of these partnerships,” he continued. “I hope that in the future there may be opportunities of mutual benefit.”

Shares in Itochu, Marubeni, Mitsubishi, Mitsui, and Sumitomo all rose by more than 5% in early trading on Monday.

Buffett’s company highlighted its longstanding positions in Coca-Cola, American Express, and Moody’s in the statement, underscoring its intention to maintain the Japanese investments for the long term. 

Berkshire has the option to boost its stakes as high as 9.9% in any of the five companies. Buffett pledged to seek approval from the relevant board of directors to raise it beyond that point.

Investing in Japanese companies is a departure from the norm for Berkshire, as it has historically favored American businesses such as Apple and Bank of America. However, it has made a few foreign bets on companies such as Brazilian payments group StoneCo.

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VIDEO: NDP leader calls for investment in the economy of care –




Nova Scotia NDP Leader Gary Burrill spent some time in Cape Breton this week meeting with the party faithful and chatting with selected candidates for the next provincial election. On Wednesday, Burrill sat down with Cape Breton Post municipal affairs reporter David Jala to talk about Nova Scotia’s political landscape and his vision for a post-COVID economic recovery. Burrill, who has led the NDP since 2016, weighed in on a number of provincial and local issues that included equalization transfers, centralization and how to best spend economic stimulus monies.

Q: Welcome back to Cape Breton. So what the heck are you doing out and about while most people are home with the hatches battened down awaiting whatever tropical storm Teddy has to offer?

A: (laughs) Well, I remember living here as a United Church minister when I was running for the leadership of the NDP, so I am well used to driving in and out of Sydney when there are different forms of weather. The real purpose of my conversations down here this week is to talk to people about the impact of COVID and hear the many different points of view from the different sectors. We are asking what are the things that are needed from the government of this province in terms of investments as we move into this coming period of recovery.

Q: Before we delve into the NDP plan for economic recovery, what is your assessment of the McNeil government’s handling of COVID-19 in this province?

A: It’s been a mixed bag. On the substance of the public health directives, I think they’ve done a very fine job. But on the basic communication and clarity and coherence of how this is all implemented, I think that they have done a less good job and it has become less effective as time has gone on. There have been inconsistencies in coherences in their approach that have not improved public confidence and compliance. For example, when we opened up the borders between Nova Scotia, P.E.I and New Brunswick — the other provinces were way ahead of us with a whole regime in place for how to track people coming into the province. We didn’t have any of this. We were behind the 8-ball. I also think about how the economy was reopened before childcare was reopened and that caused all kinds of chaos. So, overall, I think the advice Nova Scotians got from the public health directive has been strong and we’ve been happy to participate and do our part as an opposition party, but at the same time, the core elements of good communication and coherence around that communication has been lacking.

Q: Summarize the NDP plan for economic recovery?

A: Over the past six months, we have seen that there are particular areas of our society in need of investment and in need of improvement. At the same time, we know that as we come into the recovery period, every government, everywhere, is going to have signature levels of investment and stimulus spending. So, in our view, that mega investment, that mega stimulus that is going to be required everywhere to come out of the contraction of the COVID period must be directed to those places where in the pandemic we have seen a particular need. High on this list is the whole economy of care. Regarding long-term care, another report was issued earlier this week that said we don’t have enough people to provide the adequate levels of care in our nursing homes. And that having two or three people in a nursing home room is a highway to the transmission of infection. We need to move to a place where we have one bedroom for one resident. Imagine the jobs that would be created and the economic stimulus that will be provided to the whole province. If the government directed the investment that is required in order for us to come out of this contraction to building nursing homes, where every one of those 8,000 people in long-term care in Nova Scotia had their own bathroom and where everyone had their own room, then this would be a wonderful economic development program that would fulfil a wonderful need.

Q: The NDP economic recovery plan also addresses childcare. Please elaborate.

A: The economy of care is paramount and it also applies to childcare. One of the most jarring experiences of the pandemic in Nova Scotia came three or four months ago when, as I mentioned, the economy was reopened before childcare was reopened so there was a period of a week or 10 days that families all over the province were in chaos and didn’t know what to do. So again, imagine the jobs that would be created and the overall economic development stimulus that would be produced if investments were made to provide childcare that is affordable, high quality and available across the board. Not only would you have early childhood educators going to work in all areas of the province but you’d also open the door for parents to go to work.

Q: You have stated that this present economic depression is not of the “garden variety type” and that the road to recovery must be mapped out more differently than other depressions of recent years.

A: I think it’s important to recognize the unique character of the present economic moment. This is not the 08-09 recession, this is not the bubble of 20 years ago, anybody under the age of 85 has never experienced an economic contraction like we are in at the moment. This is a Depression-level contraction. So, it changes the economic conversation for us. For years that conversation has included questions like how are you going to pay for it, where are you going to get the money, but in this moment, every jurisdiction in the western world, every province, every state, every nation is going to move into a deficit position. So the question is no longer about whether or not there is a deficit, that is no longer in the conversation. The question now is what are you going to do with the deficit you are going to have. What we are saying is spread that stimulus to places where, during the pandemic, we have seen a particular need. How better to direct investment and economic development than to develop the local jobs that would be created by a major investment in commercial and residential building retrofitting, and in local renewable energy production. These are major job creation programs, major economic development programs and major stimulus programs that could address exactly the needs of the present moment.

Q: Stephen McNeil is stepping down as the premier of Nova Scotia after a 17-year run as Liberal leader and seven years as premier. How does his pending departure affect your party as it prepares for the next provincial election?

A: I think it has created a moment of real volatility and fluidity in which anything can happen. And because of COVID, we were already in a moment of that kind. So, overall, so many of the fixed points on our political landscape aren’t fixed at this time, they’re not in cement, they’re floating all everywhere, there’s a fluidity and a possibility that has been deepened and underlined by the resignation of the premier. We’re now in a situation where anything is possible.

Q: There is a possibility there could be a provincial election as early as next spring. Given that, how would you describe your party’s election readiness?

A: We’re excited about our candidates. We’re excited to have nominated former CBRM mayor John Morgan to run in Glace Bay, we’ll nominate Kendra Coombes again in Cape Breton Centre where she is the incumbent and we’re excited to have Madonna Doucette back running in Sydney-Membertou. We have about half of our Cape Breton slate ready, so the team is coming together well.

Q: The issue of federal equalization transfers has become a hot topic in the Cape Breton Regional Municipality. Many residents believe the CBRM deserves more than the $15 million it gets annually from the province which in turn receives a yearly equalization transfer payment of more than $2 billion from the federal government. PC Leader Tim Houston said that if elected premier he plans to double it and then negotiate. What’s your position?

A: We cannot have success as a province that has two cities, one of which has had an inordinate concentration of decision-making and power and the other, the CBRM, does not have the capacity to direct its fundamental affairs. We need a system that municipalities can derive their revenue in such a way as to provide comparable levels of service for comparable levels of taxation. That’s what equalization means and is what we support.

Q: What message do you have for Cape Breton residents who feel the CBRM is being ignored by the province of Nova Scotia?

A: We are living in the midst of the greatest centralization that has ever taken place in Nova Scotia history. In the seven years since the Liberals came to power in 2013, there has been this hyper-concentrated withdrawal of decision-making power from the communities and municipalities across the province. Those powers have been relocated to Halifax. So, in those seven short years, we have seen the abolition of local school boards that was replaced with a Halifax-based advisory council of education. We have seen the abolition of the local district health authorities that was replaced with the Halifax-based Nova Scotia Health. We have seen the abolition of the department of regional and rural development that was replaced by the Halifax-based department of business. In our judgment, this is not a model that accords to the nature of Nova Scotia. This province is by nature a highly decentralized society. What works on the South Shore won’t necessarily work the same way on the Eastern Shore or the Acadian Shore. Previous generations devised systems that had local decision-making power for things like health and education. So, when people in Cape Breton say that they have lost their voice, they are absolutely right, they are absolutely describing the processes that occurred over the past seven years. The present government dedicated itself to a program of withdrawing and shutting down local voices across the province and relocating them to Halifax. In our view, the road forward for the province has to be one of re-establishing the integrity and the capacity at local levels across Nova Scotia.

Q: What is your favourite sport? Are you any good at it? And, do you have a favourite team you cheer on?

A: I’ve coached baseball for many, many years. I love ball and have worked with a lot of kids, but I am a singularly poor ballplayer. And, I never cheered for the Expos or Blue Jays. I’m from Yarmouth so I grew up cheering for the Boston Red Sox. My other favourite team, of course, is the Cape Breton Eagles. They are a big part of the community. When I lived here, I knew never to schedule any church meetings on a game night. That would have been a no-no.


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Insurers' hedge fund investments may face chop after dismal pandemic performance –



By Maiya Keidan and Carolyn Cohn

LONDON (Reuters) – Having complained for years about hedge funds’ high fees and lacklustre performance, insurance firms may be preparing to cut allocations to the sector after its poor performance during recent market upheaval left many of them nursing losses.

That would be a problem for hedge funds, as insurance companies are huge investors, managing around $20 trillion of assets globally.

It would also be a challenge for insurers, which have been hoping hedge funds would deliver market-beating returns to help them meet billions of dollars in pandemic-related payouts.

One of the primary objectives of hedge funds is to preserve clients’ capital during market downturns. But the industry mostly failed to do that in the first six months of 2020, losing an average of 3.5%, according to Hedge Fund Research (HFR).

An index fund tracking the S&P500 would have lost 3% in the same period.

(Graphic: Hedge fund annual returns –

For European insurers, the underperformance is a double blow, as they incur extra capital charges to hold investments classed as risky.

“The average hedge fund would not be a good investment,” said Urban Angehrn, chief investment officer at Zurich Insurance , which says a $120 million fall in hedge fund gains versus last year contributed to a drop in first-half profits.

Angehrn said there were exceptions but “in aggregate, unfortunately, (hedge funds) don’t do a very good job in creating extra performance.”

While Zurich earned a better-than-average 2.9% from its hedge funds between January and June, that was down from 9% in the same period a year earlier. It has around 1% of its $207 billion asset portfolio in hedge funds and Chief Financial Officer George Quinn told Reuters last month it did not plan a “significant shift” in allocations.

Overall, though, European insurers’ median hedge fund holdings have been falling, hitting 1.5% in September from 2% four years before, data from Preqin shows.

Less than a fifth of global insurers plan to add to hedge fund allocations in the event of persistent volatility over the next three to six months, a State Street survey showed in June, while Goldman Sachs Asset Management’s July survey found that even before the pandemic, insurance firms were cutting hedge fund investments.

“I don’t anticipate COVID leading to increased allocations to hedge funds,” said Gareth Haslip, global head of insurance strategy and analytics at JPMorgan Asset Management.

(Graphic: Insurers’ allocations to hedge funds [in %] –


Most major insurers do not provide detail of their hedge fund exposure in earnings reports, but Dutch group Aegon told Reuters it had cut allocations to riskier assets by more than 20% as underperformance of hedge funds inflicted losses of $50 million in the first half of 2020.

“Given the current environment, we decided to somewhat de-risk our investment portfolio and have lowered our exposure to hedge funds and private equity to $1.482 million per June 30, from $1.830 million per December 31, 2019,” a spokesman said.

U.S. insurer AIG said earnings in its general insurance business suffered in the first quarter from a $588 million drop in net investment income, mainly due to hedge funds. AIG declined to comment on its allocations.

Bucking the trend, reinsurer Swiss Re’s hedge fund investments edged up to $355 million at June 30 from $352 million at the end of 2019. A spokesman declined to comment on future investment plans.

European insurers’ hedge fund allocations have room to fall as they are above global averages. It’s also costlier to hold hedge funds after Solvency II regulations introduced in 2016 required insurers to set aside more capital against riskier investments.

Those regulations have partly driven recent falls in hedge fund allocations, according to Andries Hoekema, global insurance sector head at HSBC Global Asset Management, but he noted holdings were down also in Asia, which hadn’t tightened rules.

“In Asia, we have some evidence of insurers replacing hedge fund exposure with private equity,” Hoekema said.

This was “driven partly by the more attractive returns of private equity and partly by the disappointing diversification properties of some hedge fund strategies in recent years,” he added.

($1 = 0.8545 euros)

(Reporting by Maiya Keidan and Carolyn Cohn in London, additional reporting by Toby Sterling in Amsterdam; editing by Sujata Rao and Mark Potter)

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Alberta government announces panel aimed at spurring mineral investment – Edmonton Journal



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“We have companies that are ready to invest now, and they need a process, so our timeline is tight. We want to have legislation and any regulatory changes, any pieces that need to be done, ready to go in the spring,” said Savage.

The panel is made up of former premier of the Northwest Territories Bob McLeod, executive director of the Nunavut Water Board Stephanie Autut, president and CEO of Lucara Diamond Corporation Eira Thomas, president and CEO of IAMGOLD Gordon Stothart, and Allison Rippin Armstrong, who has worked with government, industry and Indigenous organizations.

Part of the government’s strategy will include helping to improve data on mineral deposits in Alberta.

The UCP government has been touting its latest diversification efforts, including in the technology and innovation sector, but Alberta’s Opposition NDP has criticized those sector and business-specific investments as being a fraction of the NDP’s diversification plans.

Savage said the government is focused on investors and people looking to set up business in Alberta. “Those are the people that we’re talking to,” said Savage.

Under the Progressive Conservative government, Alberta Energy commissioned a Mines and Minerals Strategy in 2002, but “then it just stood still,” said Savage, adding the UCP wants to allow affected communities to contribute so projects could move forward while protecting the environment.

Savage is expected to announce the Mine and Minerals strategy panel Wednesday morning with the CEO of Calgary-based business E3 Metals Corp, Chris Doornbos.

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