Berkshire’s New Top Boss Looks to Make Buffett’s Empire His Own

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Greg Abel’s anointing as successor to the world’s most famous investor came seemingly by accident. A rare slip of the tongue for Charlie Munger, the then-97-year-old vice chairman of Berkshire Hathaway Inc., at the firm’s 2021  annual meeting let it be known who was set to replace Warren Buffett. It came as a prediction, or perhaps a mandate: “Greg will keep the culture.”. Bloomberg's Alexandre Rajbhandari joins Bloomberg Intelligence to discuss. More than four years on, the accountant-turned-energy executive is finally taking the reins of Berkshire, the $1 trillion conglomerate with businesses spanning insurance, freight and retail that employ almost 400,000 people. He’s also taking command of a $382 billion war chest, enough to come to the rescue of some of America’s largest companies with a single check. Fans just got a taste of what life will look like without Buffett when the company announced a major management shakeup this week: A star stock picker and head of its biggest insurance business is off to JPMorgan Chase & Co. Berkshire is getting a general counsel for the first time in decades. And after 40 years, a top finance executive will retire. Abel and his team face no shortage of challenges. A mild hurricane season may crimp pricing and future profits in the firm’s sprawling reinsurance business. Lower interest rates have weighed on investment income. Trade tensions with China could spell bad news for Berkshire’s railroad business. The myriad headwinds just landed the company a rare sell rating on its stock. After spending years shying away from the spotlight, Abel is now being thrust into it as he navigates those hurdles and attempts to leave his mark on an empire that was envisioned, created and shaped by Buffett — without the unparalleled admiration and leniency investors afforded the so-called Oracle of Omaha. “The biggest challenge by far is the fact that he is replacing someone who occupies this really unique space in the minds of the financial world,” said Meyer Shields, an analyst at Keefe Bruyette & Woods. Berkshire didn’t respond to a request for comment.  Born in Edmonton, Alberta, Abel has said he grew up in a tight-knit family where education and hard work were paramount. He earned his first wage delivering advertising flyers — an echo of Buffett’s stint as a paper boy for the Washington Post decades earlier. “I also had a desire to work,” Abel said in a 2018 video interview for the Horatio Alger Association. “I just recognized that that was part of life.” He worked a variety of jobs over the years, from laborer for a forest product company to a gig filling fire extinguishers. That last employer gave him a scholarship to the University of Alberta, where he started to focus on business. Abel opted for a start in accounting after his 1984 graduation and joined what is now PwC in Edmonton before decamping to its San Francisco office.  He later joined a client, CalEnergy, the then-small geothermal outfit. The company’s rapid growth culminated with the takeover of MidAmerican Energy In 1999, Berkshire agreed to take a controlling stake in MidAmerican, a deal that allowed Abel to start working with Buffett. In 2008, he was named CEO of what would later become Berkshire Hathaway Energy, a sprawling firm whose grid keeps the lights on in states including Iowa and Nevada and whose natural gas pipelines run some 21,000 miles across the country. The transformation of the energy business into one of Berkshire’s main sources of income cemented Abel’s reputation as a skilled, hands-on manager with an eye for efficient spending. He ultimately rose to vice chairman in 2018, taking responsibility for all of the firm’s non-insurance businesses. His ascension means he’ll also be atop the firm’s insurance operations, as well as of the management of Berkshire’s roughly $280 billion stock portfolio. He lacks a track record in either.  “There’s a skill-set in identifying attractive acquisition opportunities at a good price,” said Jim Shanahan, an analyst at Edward Jones. “Those skills are transferable.” -------- Get more on The Bloomberg Intelligence Podcast On Apple: http://bit.ly/3YrBfOi On Spotify: http://bit.ly/3SPPZ8F Anywhere: http://bit.ly/43hOc0r Follow us on X: https://twitter.com/BloombergRadio Listen on Apple CarPlay and Android Auto with the Bloomberg Business app: Apple CarPlay: https://apple.co/486mghI Android Auto: https://bit.ly/49benZy Visit our YouTube channels: Bloomberg Podcasts: https://www.youtube.com/bloombergpodcasts Bloomberg Television: https://www.youtube.com/@markets Bloomberg Originals: https://www.youtube.com/bloomberg Quicktake: https://www.youtube.com/@BloombergQuicktake