Transcript
Introduction
Zack
I'm Zack Fuss, and today, we are breaking down the Mitsubishi Corporation. I'm joined by Krishna Mohanraj, a portfolio manager at Diamond Hill Capital Management. When I first connected with Krishna, I cautioned him that tackling a Japanese conglomerate with operations that span energy, retail, manufacturing, mining, automotive and food, amongst others, would present a tall task.
In Japan, the business model of a trading company is prominent. The big five trading companies caught the attention of global investors in 2020 when Berkshire Hathaway disclosed a major stake in all of them: Mitsubishi, Mitsui, ITOCHU, Marubeni and Sumitomo. Today's Berkshire stake is nearly 10%.
In this episode, we discuss how the rich history of trading houses is steeped in Japanese culture and how each differs from one another. We discuss the evolution of stakeholder priorities and how capital allocation policies have changed in the Japanese capital markets, and we spent some time exploring some of the operating companies specific to Mitsubishi. We hope that this episode serves as a strong introduction to the business model of Mitsubishi Corporation.