Warren Buffett ready to buy in Britain regardless of Brexit

Billionaire investor Warren Buffett has said he is “ready to buy something in the UK tomorrow”, handing a big endorsement to Britain ahead of Brexit.

“We welcome the chance to put money out any place where we think we understand and sort of trust the system,” the 88-year-old told the Financial Times in a broad-ranging interview. “We’re never going to understand any other culture or the tax laws or the customs as well as the US, but we can come awfully close in Britain.”

Berkshire Hathaway, the conglomerate Mr Buffett runs, has had a mixed record in the UK, where its modest investments have included a stake in supermarket chain Tesco and ownership of an electricity provider in northern England.

However, the “sage of Omaha” said he was still willing to invest in Britain, regardless of whether the UK left the EU.

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He has complained that acquisitions large enough to make a dent in the more than $100 billion that Berkshire has to spend are becoming harder to find in the US amid competition from private equity firms.

Mr Buffett told Berkshire shareholders this year that the company hoped to “invest significant sums across borders”, which would mark a big shift in a 54-year career that has focused on the US.

In Europe, takeover activity has slowed sharply, potentially opening the door to a buyer such as Berkshire. He referred to the challenges facing the EU, which is grappling with rising populism, a slowing economy and tension over the future of the European project.

He said it was “very tough” for the EU to find a balance between “autonomy and common interest”, pointing out that the countries spoke different languages and had “entirely different fiscal situations”.

He added: “It doesn’t surprise me that there would be a lot of tensions, and sometimes maybe impossible tensions even.”

In the UK, Mr Buffett has previously called his investment in Tesco a "huge mistake" after shares in the supermarket chain lost 60 per cent of their value between 2008 and 2015. One of his most recent attempts to invest in Britain fell apart two years ago when Kraft Heinz, the US food group that counts Mr Buffett as its biggest shareholder, abandoned a hostile $143 billion bid to buy Anglo-Dutch rival Unilever.

‘We cross their radar’

Berkshire’s ownership of Northern Powergrid, which distributes electricity to homes and businesses in the northeast of England, has worked out better. The business delivers a steady $1 billion in revenues and $300 million in profits every year.

His insurance businesses are also active in London’s commercial and wholesale insurance markets where Ajit Jain, one of Mr Buffett’s most trusted lieutenants, is a well-known figure.

Mr Buffett has concentrated his firepower on the US, with only one of Berkshire’s 10 largest purchases, which include its $36 billion takeover of railroad BNSF and $10 billion buyout of utility NV Energy, for a company outside the US, according to data provider Refinitiv. In 2014, it acquired AltaLink, a Canadian electric utility, for $5.5 billion from SNC-Lavalin. The company’s $173 billion share portfolio is also concentrated in US groups such as Apple and drinks group Coca-Cola.

Mr Buffett believes that he is partly hampered by a lack of recognition beyond US borders. “We are known outside the United States but we don’t have the same position in people’s minds.

“If somebody has a private business here of size, they think of us if they’re going to sell it. They may only think of us for 10 seconds but we cross their radar screen. In Europe, they know of us but I don’t think they necessarily think of us,” he said. – Copyright The Financial Times Limited 2019