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.
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