Warren Buffett returns to the market and focuses on regulated infrastructures

Warren Buffett returns to the market and focuses on regulated infrastructures

With the advent of the pandemic, even Warren Buffett wavered, witnessing the generalized thud of the markets and adopting a wait-and-see attitude. But on June 6th, after months of inaction, his Berkshire Hathaway returned to investing and did it in style, putting a multi-billion dollar offer on the table a purchase of the natural gas transportation and storage division of Dominion Energy Inc. L The deal is worth $ 10 billion and is the most substantial of the past four years.

What does it foresee and why did it attract the attention of the entire market?

During his annual meeting with Berkshire Hathaway shareholders held last May, Buffett admitted that he had raised a treasury of approximately $ 137 billion.

This figure had long remained untouched, given the "absence of interesting investment ideas", despite the strong collapse of the markets.

His caution-oriented speech, along with inactivity and the massive sale of his investments in major US airlines had made investors argue, leading them to question the reasons for unusual behaviour of the Omaha oracle.

Today, however, things have changed and Buffett has finally decided to put his wallet back in hand, offering $ 4 billion to buy Dominion Energy, adding another $ 5.7 billion to the deal, also to include corporate debt. All for a maxi agreement worth around 10 billion.

The aspect to highlight is precisely the fact that the most famous investor in the globe has chosen once again the sector of regulated infrastructures, a cash cow traditionally present in the company's portfolio and in which the Pharus Best Regulated Companies invests, the only "Elephant size acquisition" since 2016, when he acquired Precision Castparts Corp.

From now on, Warren Buffett's company will have 18% of all interstate gas transportation in the United States (compared to 8% today).

This news confirms the potential of regulated infrastructures in the long term, especially considering the historical moment that sees them engaged in the energy transition and the goal of decarbonisation by 2050, and that the sector is evidently underestimated. Unmissable opportunities therefore arise for the last thematic sector born in the house of Pharus.


Information message - The information in this message is produced for information purposes only and therefore does not qualify as offer or recommendation or solicitation to buy or sell securities or financial instruments in general, financial products or services or investment, nor an exhortation to carry out transactions related to a specific financial instrument.
The contents of this informative message are the result of the free interpretation, evaluation and appreciation of Pharus Asset Management SA and constitute simple food for thought.
Any information and data indicated have a purely informative purpose and do not in any way represent an investment advisory service: the resulting operational decisions are to be considered taken by the user in full autonomy and at his own exclusive risk.
Pharus Asset Management SA dedicates the utmost attention and precision to the information contained in this message; nevertheless, no liability shall be accepted for errors, omissions, inaccuracies or manipulations by third parties on what is materially processed capable of affecting the correctness of the information provided and the reliability of the same, as well as for any result obtained using the said information.
It is not permitted to copy, alter, distribute, publish or use these contents on other sites for commercial use without the specific authorization of Pharus Asset Management SA.
Back to all news

News Correlate

04/03/2021

Pharus Sicav Conservative awarded at the Switzerland 2021 Refinitiv Lipper Fund Awards

24/02/2021

The European Reporting Season

17/02/2021

Pharus Sicav Target has detached its ninth coupon

12/02/2021

The BoLe Chronicle | February 2021

11/02/2021

Equity takes-off thanks to the reporting season

05/02/2021

Playing the commodity card with semiconductors

21/01/2021

There is life beyond growth

17/12/2020

Pharus Outlook 2021

15/12/2020

The Bole Chronicle | December 2020