Warren Buffett’s Berkshire Hathaway has made a big bet on Citigroup, as the legendary investor funnels some of the conglomerate’s mammoth cash hoard into stocks during this year’s market decline.

Berkshire bought $3bn worth of shares in the Wall Street bank in the first quarter, giving him a stake of about 2.8 per cent, according to filings with regulators. The new investment in Citi came as the company sold the remainder of its position in Wells Fargo, a rival bank that was a staple in Buffett’s portfolio for more than three decades.

Buffett, Berkshire’s chief executive, watched from the sidelines as markets plunged and then rallied at the height of the pandemic. But at the start of this year he ploughed $51.1bn into the market as global stocks sagged in the face of a hawkish pivot from the Federal Reserve, supply chain disruptions, strong inflation and the war in Ukraine.