Berkshire Hathaway (BRK.A, BRK.B) is a multibillion-dollar holding company led by chairman and CEO Warren Buffett. Bolstered by cash flows from insurance businesses such as GEICO, Berkshire invests in other industries such as automotive, railroads, energy, apparel, jewelry, home building and home furnishings. Berkshire Hathaway has rewarded shareholders immensely throughout the company's history. Shares returned a 20.3% compounded annual gain between 1965 and 2019.
In 2018, the board of directors gave Buffett and vice chairman Charlie Munger greater flexibility to buy back shares. The change allows the pair to repurchase shares when they believe shares have fallen below intrinsic value.
- Berkshire Hathaway returned a 20.3% compounded annual gain between 1965 and 2019.
- Class A shares are the equivalent of 1,500 Class B shares.
- Fidelity is the top holder of Class A shares, followed by Capital World Investors, First Manhattan and Norges Bank.
Berkshire recorded $81.4 billion in earnings in 2019, up significantly from the $4 billion it recorded the previous year, boosted primarily from a $57.4 billion gain in investments. Here's a look at the top institutional shareholders of Berkshire Hathaway Class A stock.
1. Fidelity Management and Research Company
Fidelity Management and Research, also known as Fidelity Investments, is the largest institutional holder of Berkshire Class A stock. It held 30,512 Class A shares at the end of 2019. Fidelity also held 19.38 million Class B shares. Combined, this stake represents about 2.67% of the company.
Fidelity held $8.3 trillion in assets at the end of 2019. Of that, $2.7 trillion was held in mutual fund assets. The company is based in Boston and led by chairman and CEO Abigail Johnson.
Berkshire Hathaway gained 2,744,062% between 1964 and 2019, compared with 19,784% for the S&P 500.
2. Capital World Investors
Headquartered in Los Angeles, Capital World Investors is a subsidiary of Capital Group, which manages more than $1.8 trillion in assets. It is the second-largest institutional shareholder of Berkshire Class A stock with 24,359 shares at the end of 2019. It also held 5.26 million Class B shares. This combined stake represents about 1.71% of Berkshire Hathaway.
Capital Group is a privately owned investment manager. Through in-house research and market analysis, the firm manages a diversified portfolio of investments including the U.S. and international fixed-income securities, bonds, mortgage-backed securities and municipal bonds. It manages the American Funds line of mutual funds.
Amount of assets Fidelity managed as of the end of 2019.
3. First Manhattan Company
This New York City-based firm is the third-largest institutional holder of Class A shares of Berkshire Hathaway. At the end of 2019, First Manhattan held 15,731 Class A shares and 2.3 million Class B shares. The combined stake represents 1.06% of the company.
First Manhattan is a private firm with more than $16 billion in assets under management. Founded in 1964, it provides a variety of services including investment and retirement account management for individuals, partnerships, trusts, and institutional clients. The firm focuses on building stock portfolios, with a goal of capital appreciation.
4. Norges Bank
Norges Bank is Norway's central bank. It manages Norway's foreign exchange reserves and the country's government pension fund on behalf of its finance ministry. At the end of 2019, it held 7,128 Class A shares and 9.93 million Class B shares. This stake represents 0.84% of the company.
What Are Berkshire Hathaway Class B Shares?
Berkshire Hathaway initiated Class B shares in 1996 in response to the creation of unit investment trusts, which held the expensive Class A shares. The trust units represented fractional ownership in Class A shares, which made them more affordable for smaller investors. At the time, Class A shares traded for about $32,000.
Fractional ownership is the primary difference between Berkshire Hathaway's Class A and Class B Shares. When it comes to dividend rights, a single Class A share is the equivalent of 1,500 Class B shares. However, when it comes to voting rights, a single Class A share is equal to 10,000 Class B shares.
The top institutional shareholders of Class B shares are: Vanguard Group, BlackRock, State Street, the Bill & Melinda Gates Foundation and Geode Capital Management. Vanguard Group owns 141.9 million Class B shares.