American investor, industrialist and philanthropist Warren E. Buffett said on Tuesday that he was seeking to invest in large economies like India, Brazil and China.
Addressing a media conference Berkshire Hathaway Chairman and CEO Mr. Buffett said the 26 per cent ceiling on foreign direct investment in the insurance sector was a deterrent.
Pointing out that his company operates as an agency for Bajaj Allianz, he said, “Obviously, for the time being, the limit would make us operate at the agency level rather than at an underwriter level.” Berkshire Hathaway recently made a foray into the Indian non-life insurance sector as a corporate agent for Bajaj Allianz General.
Mr. Buffett said his company had traditionally focussed on investment opportunities in the U.S. “About 85-90 per cent of Hathaway's investments have been in the U.S., but we are now seeing more opportunities in some of the larger economies like India. India is a logical place to invest in,” he remarked. He said investments had to “be large enough to be meaningful.”
Mr. Buffett said investing in emerging markets was ‘tougher' because the size of these markets was small. “Berkshire Hathaway has generally favoured investing in larger companies,” he said.
“I am an enormous believer in free trade, and world trade is not a zero sum game,” Mr. Buffett said.
“The more India and China prosper, the more the U.S. will prosper,” he said. The “resilience of American capitalism has been a major factor in its success,” he said.
Asked if he was investing heavily in information technology companies, Mr. Buffett said: “I do not know which of the companies (global IT companies) will be the winners, but I do not understand the industry well enough.” Speaking about investing, Mr. Buffett said, “Invest in what you understand. Do not go outside your circle of confidence.”
Mr. Buffett is here to visit a facility of TaeguTec, a metal-cutting tool manufacturer, which is owned by Israeli company Iscar. Berkshire Hathaway bought an 80 per cent stake in the Iscar in 2006.
Mr. Buffett said the three main objectives of his India visit were to visit the TaeguTec facility, promote philanthropy and to “explore opportunities” in the insurance business.