It pays to be the banker’s banker — at least for Warren Buffett, who will net roughly $4 billion from Goldman Sachs for his efforts.
That’s how billionaire Buffett may view his 2008-era investment in Goldman Sachs.
The Oracle of Omaha extended a helping hand to the bank run by CEO Lloyd Blankfein during the depths of the financial implosion five years ago.
Today, it continues to pay dividends — literally.
Buffett stands to make a paper profit of $2.15 billion in Goldman after the investment bank hands him 13.6 million shares — without the savvy investor having had to pony up a red cent, based on a special arrangement with the bank.
So far, Buffett has generated a paper profit of $3.92 billion — including $1.27 billion in dividends and a $500 million redemption fee — from his initial Goldman investment, according to Linus Wilson, assistant professor of finance at the University of Louisiana at Lafayette.
Under Buffett’s arrangement with the gold-plated institution, the investor exchanged 43.5 million warrants he got from his original deal for nearly 14 million shares in Goldman.
Shares of Goldman closed at $158.21, down 1 percent but 38 percent higher than Goldman’s $ 115 strike price.