Greg Abel faces a complicated leading task in Berkshire Hathaway after buffett

As 40,000 Berkshire Hathaway shareholders were on a permanent ovation on Saturday for Warren Buffett on Saturday, Greg Abel was among those who applauded the world’s largest investor.

When they meet for next year’s annual meeting, their eyes will pay attention to Abel, Buffett’s successor to the financial power plant, he spent six decades building.

The 62 -year -old, who was raised through the Berkshire public services business, will be examined so that Buffett has largely avoided investors in the returns that have passed Benchmark S&P 500 in more than 5.4 million in the last 60 years.

The tasks of Bee are doubles: Keep culture that Buffett and its late Vice President Charlie Munger instilled in BerkshireWhile setting up the group’s war to work.

It will take years to know how Abel is achieved as a capital assignor, whether he will have the same talent when identifying where to move the billions of dollars that go up to Omaha each month and if he can approach Buffett’s returns.

“I think the bar to replace Warren Buffett is impossible,” said Christopher Bloomstran, chairman of the investment group and Berkshire shareholder, Semper Augustus. “Greg will be under a microscope, not so much of the base of shareholders, but of public view.”

Some of the most powerful financiers in America greeted Buffett after his announcement on Saturday, a sign of his gravitas in Wall Street.

Jamie Demon, the CEO of Jpmorgan Chase, told Financial Times that Buffett “represents everything that is good about American capitalism and America herself,” while Goldman Sachs chief David Solomon said that the investor had “influenced a generation of leaders who have benefited from his unusual common and long term approach.”

However, this acclaim is a sign of the challenge that Abel has.

Berkshire has struggled for years to identify proper acquisition goals. Buffett said that he and his team have already collected anything worth buying but that The ratings are extended.

Sometimes, shareholders, who have seen Berkshire lost acquisitions to other bidders or sits apart. However, Buffett could ultimately claim if a wave of purchases leveraged after pandemic, in which shopping companies paid high prices from the sky, they occur under the weight of debt and a slowdown economy.

There is also a risk that the Berkshire parts will be aimed at acquiring. But Buffett’s Vote A shares, as well as Berkshire’s size, has been for some time since activists and the private capital industry, which could try to capture any number of hundreds of subsidiaries from the company. And the fact that confidence oversees Buffett’s actions after his death will slowly give them to charitable organizations means that Abel is unlikely to face threats of external investors at any time.

Abel will have a huge power power when he takes the reins: Berkshire is sitting at almost $ 350 million in cash after clean sales of about $ 175 million in shares for the last ten quarters.

Buffett reminded the investors on Saturday that Berkshire often had opportunities during sales. With the US economy disorder, they could be presented soon for Abel.

The question is whether he will be more aggressive in searching for targets or will be more connected to the Wall Street distribution machine, which Buffett has largely avoided.

Buffett’s reputation was solidified by great calls, such as in the late 90’s Dotcom Combcom, so avoiding the butcher’s shop when the bubble broke out and, more recently, to reduce the company’s stakes, partly for valuation reasons. This raised issues for shareholders until recently, when the correction and economic instability of the market made the decision seemed previous.

Over time, Buffett said at Saturday’s meeting: “They will bomb us with the offers that we will be happy that we have the cash.” He added, “It would be much more fun if it happened tomorrow, but it is very unlikely to happen tomorrow.”

It is still to be seen if Abel will expand the same goodwill as his predecessor and if he can face all Berkshire activities. While has been fundamental in a Number of great acquisitionsIncluding -several energy companies, it has not had a stock portfolio of the company’s $ 264 million: one of the jewelry of the Berkshire Crown.

“She is not known as an investor,” said Bill Stone, a Berkshire shareholder investment director GlenView Trust, who added that his confidence in Berkshire was based on his faith in buffett as investor money manager.

Larry Cunningham, Professor of George Washington University and author of Berkshire beyond buffettHe said that Abel’s commitment to Berkshire’s investment philosophy did not mean that there was no changes in his leadership.

“Abel is an operation boy, while Buffett has adopted a famous Laissez-Faire approach, trusting in managers,” he said.

Cunningham said that a more experienced CEO can bring benefits to help Berkshire subsidiaries to share ideas and expertise, but it was a risk: would the vendors of the companies have the desire to be acquired by Berkshire?

“Abel was clear that he is committed to the principle of autonomy; he would not be achieved,” said Cunningham. “But Buffett delegation meant that managers wanted to claim their confidence. Abel will have to develop this superpower.”

Few wait for Abel to occupy Buffett’s place in the investor firmament or develop the cultural cachet that attracted millions of people to Buffett and his philosophy.

Howard Marks, a co -founder of Oakree Capital, believes that it is impossible for no one to measure in Buffett, whom he described as “the only most influential investor of all time: Isaac Newton of investment.”

“He says that when he started in the early 1950’s, he was able to buy dollars for 50 cents, and it sounds easy,” said Marks. “But the thing is, even if there were opportunities, no one else did. There were no multiple Warren buffets.”

Additional James Fontanella-Khan reports