Buffett’s Berkshire Hathaway breaks from tradition with two fintech investments

Warren Buffett’s Berkshire Hathaway is doing something outside of its closely followed playbook.

The conglomerate, which typically takes stakes in blue chip American companies, has invested roughly $600 million in two fintech companies focused on emerging markets — Paytm and StoneCo Ltd., The Wall Street Journal reported Monday. Both investments were led by one of Berkshire’s two top money managers, Todd Combs.

In August, Berkshire took a $300 million stake in Paytm, India’s largest mobile-payments service that says it has more users than PayPal, the Journal said. In addition, Berkshire bought shares in Brazilian payment processor StoneCo when it went public last week.

Buffett’s holding company is best known for investments in U.S. giants like IBM, Coca-Cola and Wells Fargo.Two years ago it reversed a long-standing aversion to airlines, taking stakes in four major carriers including Delta and American. While Berkshire has stayed away from early stage tech plays, these fintech companies both dominate their local markets, a theme that does fit in with Buffett’s past investment criteria.

Buffett has long said that technology is outside of his zone of expertise. Combs, however, had an extensive background in payments before joining Berkshire eight years ago, and ran a hedge fund focused on financial companies called Castle Point Capital. He now sits on the Paytm board after Berkshire’s investment and is on J. P. Morgan’s board.

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Berkshire hasn’t shunned tech entirely. It has been acquiring shares of Apple since 2016. By the end of June, it held 251 million shares as Apple’s second largest shareholder.

— Read the entire Wall Street Journal report here.