Berkshire Hathaway (BRK.A, BRK.B) is a holding company involved in multiple industries, led by renowned investor Warren Buffett. As such, it faces different competitors.
Here is a selection of some of the sectors involved in Berkshire and its leading competitors.
- Due to the diverse resources of Berkshire Hathaway, competitors are available in a variety of fields.
- In the diversified holding sector, Berkshire competes against firms such as Jefferies Financial Group.
- It competes with big insurance companies like Berkshire Hathaway Allstate Corporation.
- Berkshire is sometimes considered a management investment company and therefore competes with players like Blackrock.
- It is also seen by some as a private equity firm, competing with the likes of KKR & Co.
Berkshire Hathaway Competition: An Overview
Warren Buffett is the chief investor and chair and CEO of Berkshire Hathaway. Other investors in the publicly traded company include billionaires such as Bill Gates, founder and former CEO of Microsoft Corporation and Mexican businessman Carlos Slim.
Outside of insurance, Berkshire’s holdings extend across the food, clothing and utilities sectors. Other assets include jewelers and furniture retailers.
In the diversified holding sector, Berkshire competes against firms such as Jefferies Financial Group (JF). Since many of its assets are insurance subsidiaries, it competes with large insurance companies such as Berkshire Hathaway Allstate Corporation (ALL).
Berkshire is sometimes considered a management investment company, which includes BlackRock, Inc. (BLK) and competes with players such as a private equity firm, KKR & Co., Inc. (KKR) competes with the likes.
On May 1, 2021, Charlie Munger, vice chair of Hathaway in Berkshire, unofficially announced that Greg Abel would replace Warren Buffett as CEO. Abel is the CEO of Berkshire Hathaway Energy and vice chair of non-insurance activities.
Jefferies Financial Group (formerly Leucadia National Corporation) is a competitor to Berkshire Hathaway where investment matters. With a similar business model, Jeffrey is often referred to as Baby Berkshire.
Although its stock is much lower and nowhere near the assets held by Berkshire Hathaway, Jefferies has managed to acquire promising assets at a lower price than the fair price and build their long-term growth.
Jeffrey has holdings in a variety of industries, including real estate, retail, energy and telecommunications. The company is a joint venture with Berkshire Hathaway, a real estate lender named Berkadia, which owns 50%.
Berkshire Hathaway relies heavily on its investment in the insurance business. The company competes with the same personal insurance lines as Allstate through its Geico Holdings, such as auto and property coverage. Berkshire’s reinsurance giant General Ray.
Allstate’s insurance assets include Square Trade, an extended warranty provider and National General, specializing in insuring commercial drivers such as truck and taxi drivers.
Although Berkshire Hathaway is not officially a management investment company, it effectively operates a portfolio of securities for its investors.
BlackRock is a Berkshire competitor in this sector. It is the world’s largest public investment firm with assets of over $ 9 trillion as of 2022. Unlike Berkshire Hathaway, BlackRock does not participate in the proprietary business.
Also, BlackRock’s customer base is limited to institutional and retail investors, such as pension plans, mutual funds, insurance companies and charities. Like other management investment firms, BlackRock provides a formal process that allows investors to purchase their capital with other investors in a professionally managed group of different types of securities.
Some may not see Berkshire Hathaway as a private equity firm. However, reports indicate that private equity titan Henry Kravis once described Berkshire as the perfect private equity model because of its huge amount of cash and publicly traded shares for acquisitions. Kravis is a co-founder of KKR, a key player in the private equity sector.
Indeed, like KKR and other private equity companies, Berkshire Hathaway is actually a source of investment capital for wealthy individuals and organizations to invest in companies and acquire equity ownership.
However, private equity firms tend to be more direct about managing money to raise these funds and ensure a positive return for shareholders.
Why is Allstate considered a competitor to Berkshire Hathaway?
Allstate Corporation is a major American insurance company that owns brands of various insurance companies. The biggest generator of Berkshire Hathaway’s profits is its insurance component, which includes GEICO. They both deal in the real estate / casualty insurance market. They fight for business from the same customer base. That’s why Allstate is seen as a competitor to Berkshire Hathaway.
What is BlackRock?
BlackRock, Inc. Is the world’s largest asset management, with approximately $ 9.6 trillion in management by Q1 2022. Based on portfolio management roles similar to Berkshire Hathaway, Berkshire Hathaway and BlackRock can be considered competitors.
What is the position of Berkshire Hathaway in the insurance sector?
Berkshire Hathaway is the second largest insurance company in the United States with a net worth of over $ 873 billion. Prudential Financial alone is the largest, with total assets exceeding 940 billion.