Elliot said to own 'large' stake in Warren Buffett’s favourite Sumitomo, Japan’s fourth-largest trading firm
Warren Buffett’s favourite Japanese trading houses, according to a person familiar with the matter. The size of the activist group’s investment is around “several tens of billions of yen," the person said, asking not to be identified because the transaction hasn’t been publicly disclosed. Every ¥10 billion ($63 million) investment is equivalent to a 0.2% stake in Sumitomo, based on Friday’s closing share price of ¥3,909.
Japan is one of the hottest markets for activist investing, with the government and institutions such as the Tokyo Stock Exchange asking companies to better manage balance sheets and retool business strategies to boost shareholder returns. Elliott — founded by billionaire Paul Singer — recently focused on developer Mitsui Fudosan Co., after previously targeting Toshiba Corp., SoftBank Group Corp. and Dai Nippon Printing Co.
Elliott has engaged with Sumitomo and shared its views on ways to create shareholder value, the person familiar told Bloomberg. It is unclear when the fund accumulated its stake in Sumitomo, or when the discussions took place. A representative for Elliott declined to comment, while Sumitomo said it doesn’t comment on shareholders.
Japanese trading houses’ shares have surged to records since Buffett said a year ago that he would be raising his holdings in them. In February, he said in his letter to investors that the companies follow shareholder-friendly policies that are “superior" to those practised in the US. Sumitomo shares reached their highest ever last week, and have climbed 27% this year.
Berkshire Hathaway Inc. holds about 8.3% of Sumitomo, according to data compiled by Bloomberg. It also invests in other trading firms, including Mitsubishi Corp., Mitsui & Co., Itochu Corp.,
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