In recent years, investors have speculated that Warren Buffett could retire someday. But the 94 -year -old billionaire surprised a lot of people on Saturday (4), announcing that he planned to move away from the position of CEO of Berkshire Hathaway after almost six decades.
Less surprising is who he said he intended to succeed him as a $ 1.1 trillion conglomerate leader who built: Gregory E. Abel, his apparent heir for years.
Who is Greg Abel?
Since 2018, Abel, 62, has been vice president of Berkshire non-insurance companies, the 189 operating businesses that include BNSF railroad, one of the largest in the country; Berkshire Hathaway Energy, a giant of energy; Restaurant chains and retailers like Dairy Queen and the Borsheim jewelry chain; Consumer brands such as the Fruit of the Loom, Brooks shoes and Justin Boots; Netjets, the private jet service; between others.
Abel’s great responsibilities came after a constant rise in Berkshire’s ranks. Born in Edmonton, Canada, and training accountant, he joined the conglomerate in 2000, when Buffett bought a controlling participation at Midamerican Energy, in which he was president.
Abel was appointed vice president of Berkshire in 2018, consecrating it as a potential successor of Buffett, a status that Buffett himself confirmed in 2021. “The directors agree that if something happens to me tonight, it will be Greg who will take over tomorrow morning,” Buffett told the CNBC at the time.
In addition to his professional experience, Abel is known for his love for hockey, who practiced in his childhood: he is a volunteer coach of his son’s team in Des Moines, where he lives and where Berkshire Hathaway Energy is based.
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Why was he chosen?
The relatively discreet Abel has gained praise from Buffett and others in Berkshire’s orbit over the years for two main qualities.
The first is your operational expertise. He helped lead a series of acquisitions that turned Midamerican – renamed Berkshire Hathaway Energy in 2014 – in a large energy producer. Since his rise in 2018, he has supervised a much broader business collection that together reported more than $ 5 billion in operational profits in the first three months of this year.
Buffett praised his apparent heir as an effective executive in whom he trusted to make great decisions. In 2023, Buffett told CNBC that Abel “does all the work and I take all the applause.” The billionaire added, “He is a great improvement in relation to me, but don’t tell anyone.”
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The other quality of Abel is that he is seen as someone who fits the Berkshire mold. He became a more serious candidate to take over the conglomerate in 2011, when David Sokol, his former Midamerican chief, who was known as Buffett’s main problem solver, fired. Berkshire has concluded that Sokol has violated the company’s policies by buying about $ 10 million in special chemicals manufacturer, while orchestrated a company’s acquisition.
The most discreet Abel, however, has been seen as someone similar to Buffett. “Greg will maintain culture,” said Charles T. Munger, then vice president of Berkshire and Buffett longtime business partner, to shareholders at the company’s annual meeting in 2021. The comment immediately generated succession speculation, which Buffett confirmed days later.
Abel has taken on more public duties in recent years, including sitting on stage for hours with Buffett at Berkshire’s annual meetings to answer investor questions.
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How should Abel manage Berkshire?
Although Buffett has gained renown as one of the most successful investors of all time, his successor’s forces are more focused on business administration. This is, in part, a reflection of what Berkshire is today: a business empire often disconnected who together employ more than 392,000 workers.
Abel is not expected to choose companies that enter Berkshire’s investment portfolio – the company already has two executives, Todd Combs and Ted Weschler, who have been hired by Buffett to help with it. But it will supervise the types of large businesses that the conglomerate is perhaps exclusively capable of closing, given the $ 347.7 billion in cash it has. (Buffett called it on his “elephant hunting gun”).
However, this will have a big challenge. For years, Buffett has not done such acquisitions. And he acknowledged that Berkshire is so great that it is difficult to find a target of acquisition large enough to significantly increase his profits.
