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An investor hailed as ‘The Chinese Warren Buffett’ just revealed a $245 million stake in Berkshire Hathaway — and now counts Buffett’s company among his biggest bets

Li Lu, the fund manager responsible for Berkshire's lucrative bet on BYD, snapped up nearly 900,000 of Berkshire's "B" shares last quarter. ...

warren buffett
Warren Buffett.

  • Li Lu's Himalaya fund revealed a $245 million stake in Warren Buffett's Berkshire Hathaway.
  • Li was responsible for Berkshire investing in BYD, one of Buffett's best bets in the past decade.
  • Berkshire's vice-chairman, Charlie Munger, described Li as "The Chinese Warren Buffett."

A longtime associate of Warren Buffett and Charlie Munger revealed a $245 million stake in Berkshire Hathaway this week. The purchase signals he has confidence in the investing duo, and sees value in their company's shares.

Li Lu's Himalaya Capital Management bought nearly 900,000 of Berkshire's "B" shares last quarter, Securities and Exchange Commission filings show. Himalaya counted Berkshire as its third-most valuable holding out of seven on September 30, and the stock made up 11% of its $2.1 billion portfolio.

Li has a long history with Berkshire's bosses. He decided to become a professional investor after listening to Buffett lecture at Columbia University in 1993. Munger, the conglomerate's vice-chairman, dubbed him "the Chinese Warren Buffett" in 2019, and noted Li was the only outsider he's ever trusted to invest his money.

Moreover, Munger declared in 2010 that he fully expected Li to eventually take a leading position at Berkshire. Li also introduced Munger to BYD, the Chinese electric-vehicle company that has been one of Berkshire's best investments in the past decade.

Notably, Himalaya sold 15% of its BYD shares for about $320 million in July. Li may have decided to take some profits and reinvest the bulk of them in Berkshire, given the size of his new stake.

Berkshire is a natural fit for Himalaya. Li's fund counted Apple and Bank of America — the two biggest positions in Buffett's roughly $300 billion stock portfolio — among its handful of holdings at the end of September.

Even so, this is the first time that Himalaya has listed Berkshire in its portfolio since it began filing quarterly updates with the SEC in early 2017. It's unclear why Li decided to buy the stock after all this time, especially as it's climbed 25% this year and trades close to a record high.

Himalaya didn't immediately respond to a request for comment from Insider.

Buffett will likely welcome Li's vote of confidence. The Berkshire chief was fiercely criticized for not deploying a chunk of his company's vast cash reserves on cut-price stocks when the pandemic tanked the stock market in 2020.

The investor has struggled to find bargains since then, especially as many assets are flirting with record highs, and private equity firms and special-purpose acquisition companies (SPACs) continue to price him out of acquisitions.

Berkshire — which sold a net $2 billion of equities last quarter as it cut its pharma and financial bets — has resorted to accelerating share buybacks during the deal drought. In fact, the company is on track to repurchase a record $25 billion of its stock this year.

Li may be betting on Berkshire to continue spending its cash wisely, and wagering that Buffett will be ready to pounce during the next market downturn.

Read more: Finance guru Whitney Tilson breaks down why Warren Buffett's Berkshire Hathaway is the ultimate 'stay rich' stock — and explains why he's not worried about $7 billion in net stock sales this year

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