Buffett's designated successor - Who is Greg Abel? Can he continue the legend of the "Stock God" Buffett?

The "Investor Spring Festival Gala" is about to be staged. Warren Buffett will hold the annual Berkshire Hathaway (BRK.A.US) shareholders' meeting on the morning of the 3rd local time (9pm Beijing time). Many people are focused on the "Stock God's" response to the recent US tariff policy and Berkshire's future investment strategy. With Buffett set to retire, many investors are also very interested in his successor - Greg Abel's past and his significance to Berkshire's future. Successor Confirmed For years, who will succeed Buffett as the head of Berkshire has always been the most intriguing question in the investment world. At the annual shareholders' meeting, Buffett and his partner Charlie Munger always respond humorously to questions about the successor: "The board has selected a successor, but the name is confidential." The turning point came at the online shareholders' meeting on May 1, 2021. At the age of 97, Munger casually revealed during the special pandemic period, "Greg will continue our culture." This seemingly casual comment instantly unraveled the mystery that had plagued Wall Street for decades. Investors immediately realized that this highly anticipated "Greg" was none other than Greg Abel, who heads Berkshire's non-insurance business empire. Buffett later confirmed in an interview that the 62-year-old Abel will become Berkshire's next CEO. Who is Greg Abel? The business leader who is about to helm the $700 billion empire has always maintained a low profile. He rarely gives interviews, with the only important public appearances being at Berkshire's annual shareholders' meetings. However, talking with those who know him best, Abel's leadership traits become clear. He has a wise mind and a charming personality, making him both approachable and awe-inspiring in the boardroom. Abel grew up in a simple family in Edmonton, the oil city of Canada. His mother was a homemaker who occasionally worked as a legal assistant, while his father worked in fire extinguisher sales. The family often struggled to make ends meet. From a young age, Abel showed a talent for business: from delivering ads door to door to collecting empty soda bottles, to helping pack fire extinguishers in his father's factory, he always found a way out of hardship. This resilience and wisdom have accompanied him throughout his career. Larry Cunningham, a professor who has studied Buffett for years, describes Abel as a person with "remarkable intelligence" who "does not make people feel alienated" and does not make others feel inferior to him. He is praised for his humble nature and dedication to helping those in need. Creator of an Energy Empire Abel's connection to Berkshire began in 2000. After earning a degree in business from the University of Alberta in 1984, Abel started his career as an accountant at PricewaterhouseCoopers. He showed exceptional potential after joining the small power company CalEnergy in 1992, rising to the position of president within six years. Under his leadership, CalEnergy expanded its business through acquisitions, purchasing MidAmerican Energy and renaming the company after the latter's name. In 2000, Berkshire acquired it, and Abel became one of Buffett's key lieutenants. This company is now the predecessor of Berkshire Hathaway Energy (BHE). After taking over BHE in 2008, Abel showed extraordinary strategic vision by expanding the business into multiple areas such as utilities, pipeline transportation, and new energy. Today, BHE has annual revenue of $27 billion, surpassing companies like Microsoft Corporation and Chevron Corporation, making it one of the top ten firms in the Fortune 500. Through his efforts, Abel has earned Buffett's full trust, demonstrating a leadership style based on prudent decision-making and a keen eye for value without taking excessive risks. Buffett praised his protege, calling him "a smart man who will never do foolish things." Despite Abel's solid leadership, Berkshire's performance in recent years has not been outstanding. Over the past decade, the company's performance has lagged behind the S&P 500 index, contrasting with its brilliant average outperformance of 10 percentage points over the market from 1965 to 2003. Dave Cote, former CEO of Honeywell International Inc., bluntly stated that this poor performance reflects a broader concern: "The only reason for a diversified conglomerate to exist is to outperform the S&P 500 index." To counter this, Buffett, who still holds 30% of the voting power, had long prepared. He amended his will to donate most of his assets to charitable organizations, building a moat to defend against potential attacks from aggressive investors on his successor. While Berkshire's size may deter acquirers, the trend towards a more diversified ownership structure will be a challenge for Abel's era. Future Vision: Balancing Tradition with Innovation Although often compared to Buffett, Abel has actually pioneered a unique business philosophy. His emphasis on sustainable development and infrastructure investment, especially in the renewable energy sector, showcases his unique strategic vision. Under his leadership, BHE has become the largest wind power operator in the US and has made significant investments in CECEP Solar Energy and wind projects. On Earth Day 2024, he proudly announced that wind power provides 100% of the electricity for MidAmerican's 800,000 customers in Iowa. Unlike Buffett's hands-off management style, Abel is known for his attention to detail. Jim Weber, former CEO of Brooks Running, recalls Abel frequently visiting the company's headquarters to ensure smooth operations and hold each team accountable. Cunningham said, "Greg will not let the laggards stay behind." This highlights Abel's relentless pursuit of results. In addition, while Buffett is praised for his ability to evaluate large-scale business transactions, Abel's strength lies in his ability to control details, from balance sheets to operational efficiency. His early career experiences, especially at PricewaterhouseCoopers and the small power company, have given him profound experience in finance and strategic management. In the future of Berkshire, Abel will face many challenges and opportunities. He needs to maintain the company's steady growth while driving innovation and change to adapt to changing times and market competition. As Buffett's successor, he will bear the responsibility of inheriting Berkshire Hathaway's traditions and values, while also showcasing his reputation in management and leadership. (Note: This translation has been slightly edited for coherence and clarity)His experience on the road as well as his subsequent work experience at CalEnergy helped him gain a deeper understanding of the mechanisms of business operations, including the importance of cash flow and strategic acquisitions.In 2011, David Sokol suddenly resigned, and Abel took over BHE, solidifying his path to leadership at Berkshire Hathaway. Since then, he has proven his strength by leading the energy sector through challenging times and turning challenges into opportunities. His leadership in handling complex negotiations, such as the Klamath River Dam project involving sensitive negotiations with Native American tribes, has earned him respect from environmentalists and regulatory agencies. Can Greg Abel continue Buffett's brilliant achievements? As the Buffett era enters its final countdown, everyone is asking: can Abel continue the legend? From his background, leadership style, and ability to adapt to a constantly changing market environment, he seems to have the ability to meet this challenge. However, the future of Berkshire Hathaway will also depend on its ability to handle the complexity brought by a rapidly changing world, from the growing influence of activist investors to the need for continuous innovation in an increasingly competitive environment. Abel's ability to strike a balance between tradition and innovation, his emphasis on building long-lasting relationships, and his proven track record all indicate a bright future for Berkshire Hathaway. However, as with Buffett's business empire, only time will tell whether Abel can continue the brilliance of the world's most successful wealth creation machine.