Berkshire Hathaway reducing Home Capital stake to less than 10%

Home Capital Group Inc. says Warren Buffett’s Berkshire Hathaway Inc. is reducing its stake in the mortgage lender to less than 10%.

Buffett’s investment firm acquired a nearly 20% stake in Home Capital in 2017 when it stepped in to provide a $2-billion credit facility and make an equity investment in the alternative mortgage lender.

The investment came as Home Capital faced a partial run on its deposits following regulators’ accusations that the company misled investors.

Berkshire Hathaway’s investment helped restore confidence in the lender.

Buffett says with the full repayment of the credit line, Berkshire’s investment in Home Capital is now not of a size to justify the firm’s ongoing involvement.

However, he says, he will “continue to cheer from the sidelines for our friends at Home.”

Also read:

Alternative mortgage lenders could become a risk

The Canadian Press

The Canadian Press is a national news agency headquartered in Toronto and founded in 1917.