Who is Greg Abel, the newly announced successor of Warren Buffett as Berkshire Hathaway CEO?

Buffett said that Greg Abel, Vice Chair of Non-Insurance Operations and Chair of Energy at the company, will take over by the end of the year. A BBC report said, “Mr Abel, sitting next to Mr Buffett on stage, was apparently caught unaware by the announcement.”

Here is why the change of guard is making waves, and what is known about Abel, as he prepares to follow one of the most well-known names in business, and lead the $1.18 trillion conglomerate.

1. 01

   Working-class background

   Gregory Edward Abel was born in Edmonton, in the Canadian province of Alberta, on June 1, 1962, to a working-class family. Working odd jobs, he cleaned discarded bottles and filled fire extinguishers, according to the Horatio Alger Association of Distinguished Americans, a non-profit that honoured Abel in 2018.

   Upon graduating from the University of Alberta, he worked at the consulting firm PricewaterhouseCoopers and the energy firm CalEnergy. He joined Berkshire Hathaway Energy, then known as MidAmerican Energy, in 1992, which Berkshire later took over.

2. 02

   Significant role, years in making

   Among other things, Abel oversees several chemical, industrial and retail operations. Within the last year, he has also taken over some of Buffett’s capital allocation responsibilities.

   Buffett said last year he would also want Abel to have final say on decisions regarding Berkshire’s portfolio of public stocks. Many executives who work with Abel call him a perceptive questioner who closely scrutinises financial metrics and wants to closely understand the businesses and how they’re run.

   His name has been floated for a while now, as speculation around Buffett’s successor grew. In 2015, then company Vice Chairman Charles Munger, who was an early collaborator of Buffett, said, “His successors would not be ‘of only moderate ability’. For instance, Ajit Jain and Greg Abel are proven performers who would probably be under-described as ‘world-class’”. Munger passed away in 2023. Jain, 73, is of Indian-origin and an alumnus of IIT Kharagpur. He is currently the Vice Chairman of Berkshire Hathaway.

3. 03

   Big shoes to fill

   The news was met with praise for Buffett at the end of his tenure. “Warren Buffett represents everything that is good about American capitalism and America itself – investing in the growth of our nation and its businesses with integrity, optimism, and common sense,” said Jamie Dimon, CEO of JPMorgan Chase & Co.

   Tim Cook, chief executive of Apple, in a post on X, said: “There’s never been someone like Warren, and countless people, myself included, have been inspired by his wisdom. It’s been one of the great privileges of my life to know him.”

Explained: The rise of Berkshire Hathaway under Buffett

In August 2024, Berkshire Hathaway attained a market capitalisation of $1 trillion, becoming the first non-tech company to do so. Its success has been chalked upto Buffett’s business acumen, in particular.

He was already a millionaire at the age of 30 in 1962. His stints as an investment analyst at his father’s firm, Buffett-Falk & Co., in 1951-54, and as a securities analyst at Graham-Newman Corp. in 1955-56 were immensely successful.

He met Munger in 1959. Together, the duo in 1965 would revitalise Berkshire Hathaway, a struggling textile company, first by using its earnings to fund other investments, and then as a brand that would become a holding company.

One of the key strategies Buffett followed is called value investing. It involves selecting stocks that may be underestimated by the stock market. This is based on understanding the stock market’s volatility, which results in ‘overreactions’ that may not indicate a company’s long-term fundamentals. Value investors stand to profit by purchasing stocks at discounted prices and are generally long-term investors of high-quality companies.

He sought out such companies that seemed to be underdogs in the field, experiencing a spot of trouble even as their business fundamentals remained sound. Thus, Berkshire came to acquire holdings in a diverse array of companies such as GEICO, Coca-Cola, Duracell and the World Book Encyclopaedia.

He reversed his position on staying away from tech stocks in 2016, when he began buying Apple shares, driven by the devotion Apple users show to their devices and viewing the company itself as a “moat,” a business that does not stand to lose its market share while open to growing profit margins.

(With Reuters inputs)