Berkshire Hathaway’s new India deal is so wrong it’s right. Warren Buffett’s company is taking a small stake in digital-payments firm Paytm. Indian tech doesn’t fit his value-investing playbook, but his outfit has $110 billion in cash and holdings like Kraft Heinz are flatlining. Letting his lieutenants place some bets on the future makes sense.

Buffett and his partner, Charlie Munger, built Berkshire into a $500 billion behemoth by buying low and investing in brands with strong and defendable cash flows. But its getting harder to find good, cheap companies after a decade-long bull market; longtime staples like Kraft and Coca-Cola are struggling to generate growth. That explains why the conglomerate recently changed its rules to make it easier to buy back its own stock.

That’s not a sustainable solution if Berkshire wants to be as successful in the next 50 years as it has been in the past half-century. The Oracle of Omaha admitted as much at the company’s annual meeting in May when he said he was wrong to pass on the chance to invest in Amazon and Alphabet unit Google years ago. Berkshire did increase its stake in Apple in the second quarter to just over 5 per cent , but the iPod makers trillion-dollar valuation reduces the odds that investment will generate outsized returns.

Acquiring tech companies would be too dramatic and risky a departure to contemplate. But having Todd Combs, a former hedge-fund manager who runs more than $12 billion of Berkshire’s investment portfolio, take a stake in Paytm parent One97 Communications is a smart way to test the waters.

Payments are a profitable bedrock of every economy, and Paytm’s leading position in the worlds fastest-growing major emerging market has already attracted investment from the Softbank-managed Vision Fund and Chinese e-commerce giant Alibaba. Berkshire’s investment would value the company at more than $10 billion, up from $7 billion when the Vision Fund injected $1 billion into the company last year.

Buffett will turn 88 later this week while Munger is 94. They may still be among the industry’s sharpest investors, but they won’t be around forever. A new generation including Combs and Vice Chairmen Greg Abel and Ajit Jain will increasingly set the tone. The Paytm investment offers a glimpse at Berkshire’s future.

(The author is a Reuters Breakingviews columnist. The opinions expressed are his own.)

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