Berkshire Crosses 10% Threshold in Lennar as Buffett Era Ends and Abel's Spending Spree Takes Shape

Berkshire bought 2.74M Lennar Class A shares for about $212.4M, passing the 10% voting threshold days after Buffett became chairman emeritus.

Berkshire Hathaway's insurance subsidiaries have quietly pushed the conglomerate past a regulatory line in the sand. Between September 17 and September 21, the Omaha-based holding company acquired 2,743,529 Lennar Class A shares on the open market through affiliated entities, a transaction valued at roughly $212.4 million. The purchases lifted Berkshire's total position to 23.72 million Class A shares and 528,217 Class B shares, according to media reports — enough to breach the 10% voting-rights disclosure threshold at the troubled US homebuilder.

The filings, submitted Monday, reveal the mechanics behind the move: Berkshire's insurance arms serve as the investment vehicle, a long-established structure that lets the group deploy underwriting float into long-term equity stakes. It is a playbook the conglomerate has run for decades, and it signals that capital allocation is proceeding without pause even as the company's leadership undergoes its most significant shake-up in 56 years.

A Historic Handover at the Top

Warren Buffett stepped down as chairman on September 18, closing out a tenure spanning more than half a century. He will remain on the board as a director and now holds the title of chairman emeritus. The board elected his son, Howard G. Buffett, as the new chairman — a move that keeps the oversight structure tethered to the founding family while day-to-day operations and capital allocation sit squarely with CEO Greg Abel.

The timing is hardly incidental. Berkshire's Class A shares closed at EUR 660,000.00 in German trading on Tuesday, a modest 0.4% daily gain, but still 3.8% below the 52-week high of EUR 686,000.00. The stock's muted performance over the past decade relative to the broad US benchmark adds a layer of pressure: investors are watching to see whether the new two-tier leadership can justify the conglomerate's valuation premium.

Abel's Capital Deployment Picks Up Pace

The Lennar stake is the latest in a series of moves that suggest Abel is putting Berkshire's enormous cash reserves to work. The group's liquidity pile sits somewhere between $365 billion and $400 billion — a sum that has long been parked in money-market instruments, earning modest yields while management waited for better opportunities.

That posture is shifting. Earlier in 2026, Abel trimmed numerous portfolio positions, expanded Berkshire's stake in Alphabet to roughly $37 billion, and committed nearly $47 billion to leading Japanese trading houses including Mitsubishi, Itochu, and Mitsui. The Lennar purchase, made at prices that in some cases fell well below historical book value, looks like a return to targeted buying in beaten-down sectors. CFRA has already characterized the move as a classic value investment.

The homebuilder's troubles are well documented. Lennar has been squeezed by declining order intake and margin compression, with 30-year US mortgage rates recently sitting at 6.95%. The company cut its 2026 delivery forecast to between 80,000 and 81,000 homes, and gross margin in the third quarter narrowed to 15.8%. Barclays recently lowered its price target on Lennar shares to $70.

The Bull Case: Cheap Assets and Reliable Income

Should mortgage rates stabilize, Lennar could ramp deliveries back up and deliver meaningful earnings contributions. Berkshire's Japanese holdings, meanwhile, throw off dependable dividends, with names like Tokio Marine and Marubeni offering more moderate price-to-earnings ratios than their US counterparts alongside solid payouts.

If Abel maintains this disciplined approach to future acquisitions, Berkshire reinforces its reputation as a resilient earnings machine. The sheer size of the cash stockpile also provides a buffer against market turbulence and positions the conglomerate to act as a liquidity provider during future selloffs.

The single metric that matters most for future returns is the return on reinvested capital. For years, management kept hundreds of billions parked cautiously rather than chasing overheated takeover battles. Abel's early moves suggest a different calculus — one that favors substance over waiting.

The Bear Case: Housing Slump and Succession Doubts

Not everyone is convinced. A prolonged downturn in US housing could weigh on the recent purchases. Institutional investors have also raised questions about the leadership configuration. Howard Buffett brings decades of board experience but is seen primarily as a steward of family tradition rather than an operator with a track record in asset management.

Should the market doubt that Abel can structure acquisitions with the same finesse as his predecessor, the conglomerate's valuation discount to the sum of its parts could widen. Berkshire shares have already lagged the broader US index over the past ten years, and the bar for the new leadership team is high.

What to Watch Next

As long as Berkshire continues making disciplined purchases in undervalued assets like Lennar and interest income on its cash holdings remains stable, the case for continued moderate gains holds. Investors in that scenario are betting that Abel modernizes capital allocation without abandoning the company's conservative risk profile.

But if demand in the US construction sector deteriorates further, or rising refinancing costs trigger write-downs on recent investments, the stock could enter a period of stagnation. The next quarterly earnings report looms as the first concrete test — management is expected to provide detailed insight into the final Lennar transaction and the trajectory of the group's overall cash position.