Warren Buffett, the world’s most successful investor, is preparing to depart Berkshire Hathaway (NYSE: BRK.A) , the holding company he has run for more than 50 years.
In his annual shareholder letter issued on Saturday, Buffett, who turns 90 this August, said that Berkshire Hathaway is prepared for his eventual death and that shareholders will be hearing more from his two top lieutenants Ajit Jain and Greg Abel.
Jain and Abel are the top contenders to eventually replace Buffett as Berkshire’s Chief Executive Officer. The two currently run the company’s collection of insurers and other businesses, which include everything from energy companies and railways to Fruit of the Loom underwear and the Dairy Queen fast-food restaurant chain.
"I’ve had suggestions from shareholders, media and board members that Ajit Jain and Greg Abel -- our two key operating managers -- be given more exposure at the meeting. That change makes great sense," Buffett said in the letter.
The billionaire investor’s annual letter -- scoured by investors for clues on succession and Buffett’s outlook for the $560-billion U.S. conglomerate -- gave no further clues on his eventual replacement, and no indication he’d step away soon after more than five decades at the helm.
But the next CEO will need to figure out how to deploy the cash Berkshire rakes in every quarter, a responsibility Buffett finds increasingly challenging because of Berkshire’s "huge and ever-growing sums of money."
Last year, Buffett failed to find a major deal to deploy all that cash -- $128 billion U.S. at the end of 2019 -- and help supercharge Berkshire’s growth.
Both Jain and Abel have proven themselves as dealmakers. Buffett praised Jain in this year’s letter for striking the 2012 deal for Guard Insurance Group, with the company’s premium volume having climbed 379% since the purchase. Abel, meanwhile, built the energy empire that now has footholds in states including Nevada, Oregon and California, and operations in England.
In the shareholder letter, Buffett also discussed how his enormous Berkshire stake will be apportioned after he’s gone. He estimates it’ll take between 12 to 15 years for his Berkshire shares to move into the market after his death, but reassured investors about the future of the company once it’s no longer run by him and business partner Charlie Munger, who is age 96.
“Berkshire shareholders need not worry: Your company is 100% prepared for our departure,” Buffett wrote in the letter.
BRK.A shares -- the most expensive on Wall Street -- began Monday trading at $343,449.00.
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