Greg Abel, an executive in the energy sector and long considered the heir apparent to Omaha, is about to take the reins of Berkshire Hathaway from Warren Buffett. This company, valued at $1.2 trillion, has in its portfolio shares of companies like Apple and American Express, as well as insurance, energy, railroad, and consumer businesses that report $10 billion in operating profits each quarter.
Abel, 62 years old, will inherit approximately $350 billion in cash from Berkshire and will have to decide how to manage it in a volatile market. Shareholders are eager to see how he will transform the direction of the company, whether he will alter the risk tolerance or sector preferences, and whether he will continue to be the first choice for companies seeking financial support.
While Abel is expected not to achieve the same celebrity as Buffett, succeeding a CEO with the longest tenure in the S&P 500 raises questions about potential future pressures in Buffett's absence. Over the years, Berkshire has relied on Buffett's ability to capitalize shareholders' money more effectively than the broader markets. Abel has assured that he will follow the investment and risk management principles established by Buffett.
Greg Abel joined Berkshire Hathaway through an acquisition. Born in Canada, he started his career as an accountant at PricewaterhouseCoopers and joined CalEnergy in 1992 as a controller, where he was discovered by David Sokol, then CEO of the company. Subsequently, Berkshire acquired a majority stake in MidAmerican Energy, which Abel went on to lead.
Under Abel's leadership, MidAmerican Energy significantly expanded and became Berkshire Hathaway Energy in 2014. Currently, the company is a giant in the utility sector in the United States, supplying electricity to several states and operating extensive pipelines across the country. Abel has gained Buffett's trust over the years and in 2018 was promoted to vice president of Berkshire Hathaway, overseeing all non-insurance operations of the company.
Since his appointment as successor in waiting in 2021, Berkshire Hathaway's operating profits have experienced a significant increase. Analysts point out that the cash reserve of nearly $350 billion will be one of the biggest challenges for Abel and the board, given his inexperience in stock selection. However, Abel has demonstrated skill in difficult business deals, such as the purchase of Constellation Energy in 2008. His approach to the cash reserve focuses on its role as a 'huge asset', ensuring continuity in Berkshire Hathaway's investment strategy.
