Buffett sees subprime opportunities

By Lilla Zuill

NEW YORK (Reuters) - Warren Buffett, chief executive of Berkshire Hathaway (BRKa.N) (BRKb.N), sees some opportunities for investing in the subprime mortgage business, he told Reuters in an interview on Wednesday.

Buffett said Berkshire Hathaway had already made some subprime investments through its Clayton Homes manufactured housing unit.

Buffett, who is famous for investing in businesses in beaten-down industries, said he also sees indirect investments in this area through a municipal bond insurer Berkshire set up earlier this year.

As Buffett wades in, others are sure to follow. Some already have -- giant bond fund Pacific Management Co, a unit of Allianz SE (ALVG.DE), and Swiss insurer Zurich Financial Services (ZURN.VX) are among those trawling through distressed, subprime assets, looking for bargain price opportunities.

"We have bought some subprime paper in the open market, as people have wanted to sell portfolios," Buffett said of the investments Clayton Homes has made to date. Other investments are possible, he added.

"We listen to anything we hear about," said Buffett. "If it is big and unusual, and carries the proper premium, we listen."

And Buffett said Berkshire's monoline insurer may indirectly invest in some distressed areas, including subprime. "Some of that may be a factor in what we are doing in bond insurance -- it is an indirect fall-out from that," he said.

Buffett said last month that he was generally hoping to make big investment deals, "the bigger the better."