WARREN BUFFETT, the renowned septuagenarian investor with more than $40 billion (£21.3 billion) in cash to spend, has utility companies clearly in his sights. He signalled plans yesterday to buy as many as three “good-sized ones” in the next ten years.

Mr Buffett, who in July broke from a 45-year tradition of investing only in American companies, said that his Berkshire Hathaway investment vehicle was considering foreign as well as domestic targets.

Mr Buffett, who last month married his long-term companion on his 76th birthday, said during a visit to Israel yesterday: “We are very open to looking at most places. We are familiar with all the large utility operations in the US and some outside the US. We would look at any that indicates an interest.”

He did not comment on potential acquisitions, although analysts have cited companies such as PG&E, the San Francisco-based gas and electricity provider, Allegheny Energy, the American power group, and Northeast Utilities as potential targets in the fragmented but fast-consolidating American utilities industry.

Mr Buffett’s planned utility acquisitions would build on the $9.4 billion takeover of ScottishPower’s PacifiCorp business in March by MidAmerican Energy, one of the more than 40 companies owned by Berkshire Hathaway. Investment firms such as Mr Buffett’s are attracted to utility companies because they have valuable physical assets and steady cashflows that can support large quantities of debt.

Macquarie, the Australian bank, the Ontario Teachers Pension Plan, 3i, the private equity firm, and Guy Hands’ Terra Firma Capital Partners are among the host of investment firms targeting utility transactions. Mr Buffett, known as the Sage of Omaha, has built a reputation based on his homespun style of straight-talking and love of steaks.

Although he is likely to remain down to earth and folksy, Mr Buffett has made some significant changes to his private and professional lives of late. In addition to marrying, the world’s second-richest man pledged in July to give away most of the $30 billion that he has amassed in his years at Berkshire Hathaway to the charity of Bill Gates, the Microsoft founder.

In the same month, Berkshire broke from its 45-year tradition of investing only in American companies with the $4 billion acquisition of Iscar Metalworking, an Israeli maker of equipment for the car and aerospace industries. Mr Buffett defended Israel as a place to do business yesterday, even though the company was forced to shut down for several days recently during the conflict between Israel and Hezbollah in Lebanon.

“I would say that over very short periods you’ll have events like that, but over the long term, the US and Israel have exactly the same risk factor,” he said.

Mr Buffett has begun to seek overseas acquisitions partly because competition from private equity firms and hedge funds, which have been raising bigger funds, has pushed up prices. He is also keen to diversify out of dollar-denominated businesses because he is concerned that there could be a sharp fall in the value of the US currency.

Mr Buffett’s concerns about growing competition were echoed at the weekend by Steven Cohen, founder of SAC Capital Advisors, the hedge fund.

Mr Cohen said: “It’s hard to find ideas that aren’t picked over and harder to get real returns and differentiate yourself. We’re entering a new environment. The days of big returns are gone.”

POWERFUL ATTRACTION

Buffett’s potential utility takeover targets include:

Northeast Utilities (US)

Berkshire Hathaway’s investment porfolio includes:

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