June 25, 2024

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Warren Buffett says Greg Appel will make investment decisions at Berkshire Hathaway upon his departure

Warren Buffett says Greg Appel will make investment decisions at Berkshire Hathaway upon his departure

Appel, 61, became known as Buffett’s heir apparent in 2021 after he inadvertently exposed Charlie Munger at a shareholder meeting. Appel oversaw much of Berkshire’s sprawling empire, including energy, railroads and retail.

Buffett provided the clearest insight into his succession plan yet after years of speculation about the exact roles of Berkshire’s top executives after the eventual transition. The investment icon, who turns 94 in August, said his decision was influenced by how much Berkshire’s assets had grown.

“I was thinking differently about how to approach that, but I think the responsibility should fall to the CEO and whatever the CEO decides might be helpful,” Buffett said. “The amounts have increased so dramatically at Berkshire, we don’t want to try to have 200 people around us managing a billion each. That doesn’t work.”

Berkshire’s cash pile had swelled to nearly $189 billion at the end of March, while its massive stock portfolio held shares worth $362 billion based on current market prices.

“I think when you deal with the amounts that we’re going to get, you have to think very strategically about how you do very big things,” Buffett added. “I think the responsibility should fall entirely on Greg.”

While Buffett has made it clear that Appel will take over as CEO, questions remain about who will control Berkshire’s public equity portfolio, as Buffett has built a large following by generating huge returns through investments in companies like Coca-Cola. hail.

Berkshire investment managers Todd Combs and Ted Weschler, both former hedge fund managers, have helped Buffett manage a small portion of his stock portfolio (about 10%) over the past decade or so. There has been speculation that they may take over that part of Berkshire’s CEO role when he is no longer able to.

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But it appears, based on Buffett’s recent comments, that Abel will have final decisions on all capital allocations – including stock selection.

“I think a CEO has to be someone who can think about buying companies, buying stocks, doing all kinds of things that might arise at a time when no one else wants to act,” Buffett said.

Abel is known for his strong experience in the energy industry. Berkshire acquired MidAmerican Energy in 1999 and Appel became CEO of the company in 2008, six years before it was renamed Berkshire Hathaway Energy in 2014.

Correction: Berkshire’s stock portfolio is worth $362 billion. An earlier version misstated this number.