In an SEC Form 4 filing after the market closed on Friday, November 8, Berkshire Hathaway reported a $204 million increase in its investment in DaVita HealthCare Partners. Berkshire purchased 3.7 million additional shares in the kidney dialysis company on November 6, 7, and 8, at an average price of $55.14. Berkshire now owns 35.1 million shares of DaVita, which are currently valued at $2 billion, and equal 16.5 percent of DaVita’s outstanding shares.
Berkshire has been building its position in DaVita throughout 2012 and 2013, since Ted Weschler was hired by Warren Buffett as a portfolio manager for Berkshire. DaVita was one of Ted Weschler’s largest investments over the preceding 10 years in his hedge fund, Peninsula Capital Advisors. Ted Weschler has been closely following, and investing in, the kidney dialysis industry for almost 30 years. In 1984 he worked on the acquisition of National Medical Care Inc., a large provider of kidney dialysis services, for his employer, W.R. Grace. Apparently Ted Weschler has been purchasing these shares for Berkshire Hathaway. The 5% drop in DaVita’s shares on November 6 after the release of its third quarter earnings provided Ted Weschler with an opportunity to add to Berkshire’s stake at an attractive price.
Berkshire previously agreed not to acquire more than 25 percent of DaVita. Its shares closed at $56.30 on November 8, and their 52 week price range is $52.23 – $65.67.