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Berkshire Hathaway Specialty Insurance

Berkshire Hathaway Specialty Insurance Names Anselm Waigand to Head of Risk Engineering, Germany

(BRK.A), (BRK.B)

Berkshire Hathaway Specialty Insurance has appointed Anselm Waigand as Head of Risk Engineering, Germany. He was previously Senior Risk Engineer at BHSI in Frankfurt, Germany.

“Anselm has been at the forefront of our efforts to expand our risk engineering team and capabilities in Germany and throughout the region,” said Leander Metzger, Head of Property, Engineered Lines and Risk Engineering, DACH region. “I am so pleased to have him now leading our growing risk engineering team in Germany as we deploy our deep technical expertise locally in Europe.”

Anselm joined BHSI in 2020, and has more than 15 years of engineering experience at major global insurers. He holds a degree in Civil/Structural Engineering from Technical University Darmstadt, Germany.

He will continue to be based in Frankfurt.

© 2022 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell a stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

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Insurance

Berkshire Has $70 Million That It Needs to Put To Work

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Berkshire Hathaway now has another $70 million that it needs to invest.

Seritage Growth Properties, a national owner and developer of 150 retail, residential and mixed-use properties, has announced that on September 30, 2022, it made a voluntary prepayment of $70 million toward its $1.6 billion term loan facility provided by Berkshire Hathaway Life Insurance Company of Nebraska.

With the prepayment, $1.27 billion of the term loan facility remains outstanding. The prepayment will also reduce Seritage’s total annual interest expense related to the term loan facility by approximately $4.9 million.

© 2022 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell a stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

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BNSF

BNSF to Make Barstow Home to New $1.5 Billion Integrated Rail Complex

(BRK.A), (BRK.B)

BNSF Railway will invest more than $1.5 billion to construct a state-of-the-art master-planned rail facility in Southern California – and the first being developed by a Class 1 railroad.

The Barstow International Gateway will be an approximately 4,500-acre new integrated rail facility on the west side of Barstow, consisting of a rail yard, intermodal facility and warehouses for transloading freight from international containers to domestic containers.

The facility will allow the direct transfer of containers from ships at the Ports of Los Angeles and Long Beach to trains for transport through the Alameda Corridor onto the BNSF mainline up to Barstow.

Once the containers reach the Barstow International Gateway, they will be processed at the facility using clean-energy powered cargo-handling equipment, and then staged and built into trains moving east via BNSF’s network across the nation.

Westbound freight will similarly be processed at the facility to more efficiently bring trains to the ports and other California terminals.

“By allowing for more efficient transfer of cargo directly between ships and rail, the Barstow International Gateway will maximize rail and distribution efficiency regionally and across the U.S. supply chain and reduce truck traffic and freeway congestion in the Los Angeles Basin and the Inland Empire,” said Katie Farmer, President and CEO of BNSF. “This will play a critical role in improving fluidity throughout our rail network, moving containers off the ports quicker, and facilitating improved efficiency at our existing intermodal hubs, including those in the Midwest and Texas. The facility will also have an important positive economic impact, including the creation of new, local railroad jobs.” said Farmer.

“The significance of BNSF’s investment to improve the supply chain here in California cannot be overstated. Rail plays a critical role in moving goods safely and efficiently, while reducing emissions due to congestion in many of our high-traffic corridors,” said Trelynd Bradley, Deputy Director of Sustainable Freight and Supply Chain Development at the Governor’s Office of Business and Economic Development. He added, “Projects like BNSF’s will work to strengthen our inland local economies, such as that of Barstow in San Bernardino County. We look forward to continuing to work with projects like these, as well as others, to drive transformative investments that will enhance and elevate California’s supply chain ecosystem for a more efficient and resilient tomorrow.”

“BNSF’s planned Barstow International Gateway will improve cargo velocity through our port and reduce truck traffic on our freeways,” said Port of Los Angeles Executive Director Gene Seroka. “This project will help ensure that goods moving through the San Pedro Bay will get to consumers, businesses and manufacturers with speed and reliability.”

© 2022 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell a stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

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Lessons From Warren Buffett

Lessons From Warren Buffett: Can’t Find a Good Investment? Beware Enlarging Your Circle

Every investor has a circle of competency that encompasses the companies and types of investments that they understand. What do you do when you can’t find anything that fits in that circle? In Warren Buffett’s case, he prefers to wait rather than hoping he can enlarge the circle.

“If we have trouble finding things within our circle, we will not enlarge the circle,” Warren Buffett said at the 1995 Berkshire Hathaway Annual Meeting. “You know, we’ll wait. That’s our approach.”

Warren Buffett is quick to point out that just because something in not in your circle of competency, it doesn’t mean it isn’t in somebody else’s. What Buffett understands when it comes to technology companies and what Bill Gates understands are vastly different. However, Buffett wants to understand it himself, not just take a recommendation from someone more expert than him.

Hear Buffett’s full explanation

See the complete Lessons From Warren Buffett series

© 2022 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

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Appointments Berkshire Hathaway Specialty Insurance

Berkshire Hathaway Specialty Insurance Promotes Two in Ireland

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Berkshire Hathaway Specialty Insurance has announced a pair of promotions in Ireland: Shane O’Neill has been named Head of Property, while Ciaran Reddin has been appointed Head of Professional Indemnity and Cyber.

“Shane and Ciaran have played pivotal roles in building our portfolio and bringing BHSI’s values, bespoke solutions and excellent service to our customers and broker partners in Ireland,” said Louise Kidd, Country Manager, Ireland, BHSI. “I am pleased to recognize their contributions with these promotions. In their new leadership roles, they will further elevate our service and solutions and advance our growing and talented teams in Ireland.”

Shane joined BHSI in 2019 as Senior Property Underwriter and has 20 years of industry experience. Ciaran has nearly a decade of industry experience. He joined BHSI in 2019 as Senior Professional Indemnity Underwriter, Executive & Professional Lines.

Both Shane and Ciaran will continue to be based in BHSI’s office in Dublin.

© 2022 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell a stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

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BNSF

BNSF Orders Battery-Powered Locomotives

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BNSF Railway will test battery-electric locomotives in its Southern California rail yards.

Built by Progress Rail, a Caterpillar Company, the EMD Joule electric locomotives do not use diesel fuel and emit zero exhaust emissions.

Scheduled for delivery in 2024, Progress Rail will supply up to four EMD Joule battery electric locomotives to BNSF.

“The EMD Joule is a switcher locomotive meant for railyards not long distance hauling, and the environmentally friendly locomotive could help BNSF reduce emissions at locations in California. BNSF has faced stiff opposition to its proposed rail yard near the Port of Los Angeles by environmental groups that say it would increase pollution in West Long Beach.

The Joule locomotive is an exciting advancement in battery-electric locomotive technology with more energy storage and faster charging,” BNSF’s Vice President of Environment and Sustainability John Lovenburg said. “The project is well aligned with BNSF’s commitment to innovation and leadership in sustainable freight. We are focused on continuing to reduce the environmental impact in the communities where we operate and proud to do our part to assess the commercial and operational viability of emerging technologies that reduce emissions.”

Caterpillar’s Progress Rail is one of the largest integrated and diversified providers of rolling stock and infrastructure solutions and technologies for global rail customers.

© 2022 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell a stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

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Lessons From Warren Buffett

Lessons From Warren Buffett: A Franchisor Has to Have a Good Business for the Franchisee

Corporations that rely on the franchise model can’t just focus on squeezing the maximum amount of revenue out of their franchises if they want to truly be successful. According to Warren Buffett, who in 1998 purchased International Dairy Queen, a quick service restaurant chain that relies on the franchise model, you have to focus on building a great business that franchisees can be successful owning, and even eventually selling at a profit down the road.

Investors looking to buy shares in companies that rely heavily on the franchise model, would be wise to look beyond corporate financial reports, and personally visit franchisees to learn whether they feel they own a business that they can be successful with over the long term.

“You have to have a good business for the franchisee to, over time, have a good business for the parent company,” Warren Buffett said at the 1998 Berkshire Hathaway Annual Meeting. “A successful franchisee can sell his operation for significantly more than he has invested in tangible assets. And we want it that way, obviously, because that means he’s got a successful business, and it means that, over time, we will have a successful business. You want the franchise operator to make money and you want him to create a capital asset that’s worth more than he’s put in it. That’s the goal.”

Hear Buffett’s full explanation

See the complete Lessons From Warren Buffett series

© 2022 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

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Berkshire Hathaway Specialty Insurance

Berkshire Hathaway Specialty Insurance Offers Multiple New Policies in Spain

(BRK.A), (BRK.B)

Berkshire Hathaway Specialty Insurance has introduced new Property Damage, General Liability, D&O, Professional Indemnity and Marine Cargo Insurance policies in Spain.

“Launching our proprietary policy wordings in Spain is indicative of our commitment to leading domestic and international insurance programs for customers,” said Eduardo Guinea, Head of Customer and Broker Engagement for Spain, BHSI. “Each of these new policies reflect BHSI’s simple, clearly understood wordings and deliver the certainty of comprehensive, flexible coverage to customers.”

BHSI underwrites on a net capacity basis, without accessing the reinsurance markets, which vests the company with flexibility in designing coverage and facilitates responsive, local decision-making. Foundational to all BHSI products is its CLAIMS IS OUR PRODUCT philosophy, which underscores the company’s willingness to offer coverage and respond with excellent service when customers face claims.

“The introduction of these new policies is an important step in our steady expansion in Spain. We look forward to continuing to grow, hiring talented professionals, launching new products, entering new segments, and expanding our geographical presence,” said Constanza Gallegos, Country Manager for Spain, BHSI.

The new policies are available immediately in Spain.

© 2022 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell a stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

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Berkshire Hathaway Specialty Insurance

Berkshire Hathaway Specialty Insurance Expands Into Belgium

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Berkshire Hathaway Specialty Insurance has opened a new office in Brussels, Belgium, and made several senior-level appointments.

Louis du Ché has been named to the role of Country Manager for Belgium. Louis joined BHSI in 2019 as Head of Property, France, and will retain that position as well.

Frederic de Blieck has joined BHSI as Head of Executive & Professional Lines in Belgium. He comes to BHSI with more than 20 years of experience, most recently as Head of Financial Lines, Belgium and Luxembourg, at another global insurer.

Bram Boets has joined as Head of Property in Belgium. He has more than a decade of experience spanning both the underwriting and brokerage sides of the business, most recently as Senior Manager, Property, at a global brokerage firm in Brussels.

David Bogaert has joined as Head of Customer & Broker Engagement in Belgium. He has 20 years of industry experience and was most recently Head of Distribution, Belgium, at another global insurer.

Koen Dupont has joined as Head of Casualty in Belgium. He has more than two decades of experience at brokerages and insurers and was most recently Head of Casualty, France, Belgium and Luxembourg at another global insurer.

“With the opening of our newest office in Belgium, we continue to enhance our ability to serve customers and brokers throughout Europe and deliver BHSI’s certainty and CLAIMS IS OUR PRODUCT philosophy,” said François-Xavier d’Huart, Head of France & Belgium, BHSI. “Already we have assembled a highly experienced leadership team in Belgium, headed by Louis as Country Manager. This excellent team will spearhead our efforts to further build our team, our broad range of products, and our customer and broker relationships in this key market.”

All of these BHSI leaders will be based at BHSI’s new office, which is located at 54 Avenue Herrmann-Debroux, 1160 Auderghem, Belgium.

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell a stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

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Berkadia

Berkadia Completes $110.88 Million Sale and Secures Over $58 Million in Financing for Multifamily Property in Colorado

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Berkadia, Berkshire Hathaway’s joint venture with Jefferies Financial Group, the sale of and financing secured for Springs at Foothills Farm, a 264-unit garden-style multifamily community located in Colorado Springs, Colorado.

Senior Directors Nick Steele and John Laratta and Directors Nate Moyer and Tyler King of Berkadia Denver completed the $110.88 million record setting sale on behalf of the seller, Wisconsin-based Continental Properties Company, Inc. The buyer was California-based Hamilton Zanze & Company, and the deal closed on September 7. The sale of Springs at Foothills Farm represents the largest transaction in the history of Colorado Springs.

“This was an exciting asset to work on given the size and location,” said Steele. “It’s the largest single asset sale ever in Colorado Springs. Despite turbulent market conditions, we were able to procure more than 20 offers for the asset which speaks to the amount of interest for high quality, well located multifamily assets in Colorado. The fact that the transaction was consummated is a testament to the parties involved. We are grateful to have played a small part.”

Managing Director Clay Akiwenzie of Berkadia Incline Village secured $58.145 million in permanent acquisition financing on behalf of the buyer. The 10-year loan was financed through Freddie Mac.

“Closing on time on terms negotiated 90 days ago amidst such extreme capital markets volatility requires calm and seasoned hands on every edge of the transaction,” said Akiwenzie. “We had that here.”

About Berkadia

Founded in 2009 as a 50/50 joint venture between Berkshire Hathaway and Leucadia National Corporation (now known as Jefferies Financial Group), Berkadia is a third-party commercial mortgage servicer, as well as an approved lender for Fannie Mae, Freddie Mac, and HUD/FHA.

The company is among the top Freddie Mac and Fannie Mae multifamily lenders.

Berkadia owes its origins to GMAC Commercial Mortgage Corporation, which was acquired in 2009 by Kohlberg Kravis Roberts & Co., Five Mile Capital Partners LLC, and Goldman Sachs Capital Partners. Christened Capmark Financial, the company had $10 billion of originations in 2008 and a servicing portfolio of more than $360 billion before running into bankruptcy in October 2009.

In a deal approved by the bankruptcy court, Capmark sold its mortgage loan and servicing to the newly formed Berkadia in a deal worth $515 million.

The deal brought Berkshire into the heart of the commercial loan serving business, and the company has one of the largest commercial real estate servicing portfolios.

© 2022 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.