Billionaire investor Warren Buffett has confirmed that the vice chairman of his investment conglomerate Berkshire Hathaway, Greg Abel, will succeed him as chief executive.
The 90-year-old’s succession plan was teased to him – apparently by accident – by his longtime business partner Charlie Munger, 97, at the company’s annual meeting this weekend. Buffett, speaking to CNBC in an interview that aired Monday, confirmed his choice.
“The administrators agree that if anything happened to me tonight, it would be Greg who would take over tomorrow morning,” he said.
From humble beginnings, Buffett, known to millions as the no-frills ultimate value investor, has amassed a fortune of $ 100 billion (£ 72 billion) at the helm of Berkshire Hathaway, a group of investment of $ 644 billion. The company has stakes in a wide range of businesses, ranging from Apple and rail interests to battery maker Duracell and ice cream fast food chain Dairy Queen.
Described as “a model of sobriety” – a tycoon who prefers Cherry Coke to champagne and drives a mid-range car with a license plate marked “thrifty” – Buffett has long been seen as a counterpoint to traffic rampant and selling on Wall Street.
Buffett also tends to quote Munger: “Charlie says there are only three ways a smart person can go bankrupt: alcohol, women, and leverage. Now the truth is – the first two he just added because they started with L – it’s leverage.
Some of America’s richest men, including Bill Gates, entrusted him with the scattering of their fortunes.
“He’s a guy who is brilliant but he needs people around him who can take care of certain needs,” Andy Kilpatrick, a Buffett biographer, told The Guardian in 2006 after Buffett married his partner from longtime, Astrid Menks. “He doesn’t really do household chores, he doesn’t have a mechanical brain. He can barely turn on a light switch.
Buffett has teased investors about Berkshire Hathaway’s succession plans for years. In 2012, he revealed that the board had identified the next CEO for the company and said he was someone the board knew well.
Choosing Abel, 55, whose responsibilities include stakes in railroads, utilities, manufacturers, retailers and car dealerships, Buffett said, “He’s doing a much better job than I do. was doing before. If Abel can’t get the job done, he added, another vice president, Ajit Jain, who oversees Berkshire’s retail and reinsurance business, would become CEO.
“We are very comfortable with Abel as CEO and with the future overall leadership of the company. I think he turned out to be a really effective leader, ”said Jim Shanahan, analyst at investment firm Edward Jones. Shanahan noted that Abel addressed questions about the company’s efforts to respond to climate change at the weekend meeting.
The company has long planned to divide Buffett’s job into three parts when he leaves: a CEO to oversee Berkshire’s capital allocation and operations, investment managers to manage Berkshire’s stock portfolio. and a separate chairman of the board.
Between 1965 and 2020, Berkshire generated compound annualized gains of 20%, surpassing the 10.2% gains of the S&P 500 including dividends during the period. But in recent years, the company’s returns have fallen below the index, according to figures compiled in the Wall Street Journal.
Buffett also worried that Berkshire couldn’t find a large acquisition to invest their nearly $ 145 billion cash stack in. Over the weekend, he warned of the boom in PSPCs – special purpose acquisition companies – calling it a “killer” that “won’t last forever, but that’s where the money now and Wall Street is going where the money is ”.
Buffett also commented on what is described as a “casino” stock market that he says millions of people have entered over the past year.
“The gaming impulse is very strong with people all over the world and sometimes it gets a huge push and the conditions lead to this place where more people enter the casino than leave each day,” said Buffett. “And it creates its own reality for a while and nobody tells you when the clock is going to strike 12 and it all turns into pumpkins and mice.