Meet Warren Buffett’s handpicked successor, Greg Abel

many investors worried about the future of Berkshire Hathaway after his legendary CEO Warren Buffett disappeared, but most of the conglomerate companies have already managed to transfer reporting to the person who will eventually replace the 92-year-old.

Buffett himself and the executives of Berkshire Hathaway companies such as See’s Candy and Dairy Queen say they don’t have any doubts about Vice Chairman Greg Abel’s ability to lead the conglomerate. Abel now manages all of Berkshire’s uninsured businesses. So the main parts of the CEO’s job that he hasn’t done yet are overseeing the company’s insurance side and deciding how to invest Berkshire’s nearly $131 billion in cash.

Buffett assured investors of The annual meeting on Saturday that he believes Abel is the right man for the job and that he knows how to allocate capital following the same model that Buffett uses even though he doesn’t make spending decisions today. In addition, Abel helped oversee several major acquisitions in Berkshire’s utility unit that he led from 2008 to 2018, including the purchases of Nevada’s NV Energy for $5.6 billion and Canadian power transmission firm Altalink for nearly $3 billion.

“I don’t have a second choice. I mean it’s very hard to find. But I also saw Greg in action and I felt 100% comfortable,” Buffett said. “Greg inherited a great business and I think he can make it even better.”

Buffett confirmed this In the end Abel will take over for him two years ago after his partner Charlie Munger let it slip at that year’s annual meeting even though Buffett had no plans to retire.

In addition, Berkshire has two other investment managers and another vice chairman overseeing all of its insurance businesses, including Geico and several major reinsurers, in place although Buffett said Abel will decide what people have a lot of trust after he became CEO.

Gonzaga University business professor Todd Finkle, who recently wrote a new book titled “Warren Buffett: investor and Entrepreneur,” said Berkshire shareholders should trust Buffett’s judgment about his successor because he has been thinking about his successor for a long time.

To highlight how long Buffett has been thinking about this, Berkshire showed video clips Saturday of Buffett fielding questions about his successor for at least the past 29 years. It may have happened before, but Berkshire has no video of the meeting before 1994.

“He’s not going to screw it up,” Finkle said at the Gabelli Funds Value Investing Conference on the eve of the annual meeting in Omaha.

CFRA Research analyst Cathy Seifert agreed: “The issue of succession has been put to rest.”

Berkshire managers who have reported to Abel instead of Buffett since 2018 said they are confident and impressed with his ability to manage a wide variety of businesses as diverse as Israeli takemaker Iscar Metalworking, industrial conglomerate Marmon Holdings, jeweler Helzberg Diamonds and the NetJets private jet service.

Dairy Queen CEO Troy Bader said that anytime he has any issues related to the brand, Abel is always available, and he’ll be in touch if he has any questions. Bader said he wasn’t sure where Abel “always gets the sun, but his access is pretty good.”

“Greg is a quick study. He understands businesses quickly and he will challenge us, as you would expect any good manager to do,” he said.

Buffett is clearly a tough act to follow after leading Berkshire for 58 years and earning a reputation as one of the best investors, but Bader says there is plenty of talent among Berkshire’s other managers.

“Apparently Berkshire doesn’t know anyone other than Warren and Charlie who are very well connected,” Bader said. “But having had the privilege of knowing so many other leaders, Berkshire is in capable hands, and that’s again a credit to Warren.”

Buffett and Abel joked during an interview on CNBC earlier this spring that Abel could still get more from Berkshire businesses because he doesn’t have a history of acquiring them and could ask for more. questions as he gets to know the companies better. But like Buffett, Abel allows businesses to run themselves, often discussing strategy and offering advice when they need it. But the CEOs of each of Berkshire’s businesses make the day-to-day decisions unless they run any major spending decisions past chiefs.

Brooks Running CEO Jim Weber said Abel approached businesses with a background as an operator who helped build the Berkshire Hathaway Energy utility unit as opposed to Buffett’s background as an investor. Abel might even direct some more questions about Brooks’ competition to Weber because unlike Buffett, Abel is a runner who wants to test the shoe and not just the numbers. But he still provides similar management.

“We really saw that he has the brain of an operator. And in that sense, there are different questions that, I think, are more in line with business topics and issues,” said Weber. “But in at the end of the day, you know, the relationship is, both work for us.”

Candy’s See Pat Egan said shareholders should know that Abel is unique in his own right.

“Greg is very talented. He’s an amazing guy,” Egan said. “So in terms of leadership, we have no, no concerns whatsoever.”

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