BREAKINGVIEWS - Buffett's new wannabe doesn't have money problems

Tue Sep 13, 2011 1:08pm IST

Berkshire Hathaway Chairman Warren Buffett wanders the company trade show before his company's annual meeting in Omaha, Nebraska April 30, 2011. REUTERS/Rick Wilking/Files

Berkshire Hathaway Chairman Warren Buffett wanders the company trade show before his company's annual meeting in Omaha, Nebraska April 30, 2011.

Credit: Reuters/Rick Wilking/Files

Related Topics

(The author is a Reuters Breakingviews columnist. The opinions expressed are her own.)

By Agnes T. Crane

NEW YORK (Reuters Breakingviews) - Warren Buffett tapped another relatively unknown investment manager to help shepherd Berkshire Hathaway's massive stock market holdings. Ted Weschler's investment record is impressive -- returning 1,236 percent in 11 years. But it may have been his attitude to personal wealth that gave him a spot in the relay race to replace Buffett.

Weschler will join Todd Combs and possibly a yet-to-be-hired third manager to oversee part of the equity holdings in Berkshire's insurance subsidiaries. Eventually the troika will run all of the company's equity and debt investments, but they'll have to wait until Berkshire's homespun CEO moves aside to seize the reins more fully.

The appointment comes some six months after David Sokol, a presumed Berkshire CEO-in-waiting, flamed out in an insider trading scandal that sullied the company's squeaky clean image. Sokol's personal front-running of the $9 billion Berkshire takeover of Lubrizol, along with a professed wish to amass a larger fortune, would have still been fresh on Buffett's mind when he sat down with the investment manager at the Glide charity dinner in July.

Weschler had won the annual auction for the second year in a row, spending over $5 million in all to break bread with the legendary investor. To be sure, forking over that kind of cash says many things about the man; but in July 2011 it spoke volumes about the manager's relationship with money. Namely, he was happy to let some of it go for the right reasons, one of which was giving it to charity.

Buffett has pledged to hand his billions over to philanthropic institutions one day. That kind of comfort with wealth could serve Berkshire shareholders well. The company still relies on the integrity of its officers, rather than a rigid overlay of corporate compliance, to maintain its still mostly sterling reputation. When Buffett, and his star power, are gone, trust in Berkshire's officers could be one of the company's most valuable assets.

CONTEXT NEWS

-- Berkshire Hathaway announced on Sept. 12 that it hired Ted Weschler to manage the equity portfolios of the company's insurance subsidiaries. Weschler joins Todd Combs, who joined the company in 2010, as one of the three investment managers who will run Berkshire's entire debt and equity portfolio when Warren Buffett is no longer CEO.

-- Weschler, a hedge fund manager at Peninsula Capital Advisors, paid more than $5 million dollars to have lunch with Buffett in 2010 and 2011 when he won an annual charity auction, according to long-time friend and Buffett ghostwriter, Carol J. Loomis.

(Editing by Rob Cox and Martin Langfield)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

Earnings Season

Earnings Season

Reliance Q4 sales rise, refining margin narrows.  Read 

Innovative Solution

Innovative Solution

Turning smog into jewels - a Dutch designer's solution to Beijing's pollution.  Video 

Insider Trading

Insider Trading

Rajaratnam's brother loses bid to dismiss insider trading charges.  Full Article 

Literary Giant Dies

Literary Giant Dies

Mourning and memories in Gabriel Garcia Marquez's languid hometown.  Full Article 

S&P on India

S&P on India

S&P: India's ratings to depend on next govt econ, fiscal policies.  Full Article 

Ambitious Aim

Ambitious Aim

In green car race, Toyota adds muscle with fuel-cell launch.  Full Article 

Bond Market

Bond Market

A star abroad, RBI boss riles bond traders at home  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage