🏢 Berkadia

📝 Description

Berkadia is a joint venture between Berkshire Hathaway and Leucadia (now Jefferies Financial Group). Formed in late 2009, Berkadia was created to acquire the servicing assets of Capmark Finance, a major mortgage lender that collapsed during the financial crisis.

---

🔗 Connection to Berkshire

• Joint Venture: Owned 50/50 by Berkshire and Leucadia. The partnership combined Berkshire’s massive capital with Leucadia’s specialized financial expertise.
• Opportunistic Acquisition: Formed at the depth of the financial crisis to buy high-quality servicing and origination platforms from a distressed seller (Capmark).
• Reliable Fee Income: Berkadia services a massive portfolio of commercial and multi-family mortgages, generating steady fee income regardless of interest rate cycles.

---

📈 Key Insights

• The Buyer of Choice: Capmark had several suitors, but Berkshire and Leucadia were able to provide certain, immediate cash at a time when others were credit-constrained.
• Shared Culture: Buffett specifically notes that he enjoys working with Ian Cumming and Joe Steinberg of Leucadia because they share Berkshire's long-term orientation and opportunistic mindset.
• Scale: At inception, Berkadia serviced over $235 billion in commercial loans, making it one of the largest players in the industry from day one.

---

💡 Key Mentions

• 2009 Letter: Mentioned as a key capital commitment in the finance sector that generates non-insurance earnings.

---

index | Entities