And what kind of deals does Buffett pine for? He likes buying large, family-owned enterprises with long histories of predictable profitability achieved with very little additional capital infusion. Typical of the breed: Buffett bought Marmon Industries, a collection of 125 manufacturing and service companies, for $4.5 billion from Chicago's Pritzker family, in 2007.
Those kinds of deals need a gentle touch, a special perspective that's cultivated, honed -- not in the trenches, not in the conference room -- but through personal interaction, at Sun Valley and Aspen. The critical sit in those deals takes place in homes, not board rooms. To put it in pop-culture terms, you don't need Bob Sugar. You need Jerry Maguire.
Current Geico boss Tony Nicely doesn't have what it takes, either. He knows insurance. Burlington Northern CEO Matthew Rose knows trains and Lubizol head James Hambrick knows about industrial manufacturing, but neither have the temperament. Greg Abel comes close, but he, like Jain, is too valuable in his current role as the head of MidAmerican. And he makes more money there, too, which is not an incidental consideration.
The Envelope, Please ...
The right man for the job is Bryon Trott.You might not have heard of him, but he's my odds-on favorite to run Berkshire after Buffett retires, which he has scheduled for "five years after [his] death." I give Trott a three-in-four chance. Trott, 53, is a Goldman Sachs (GS) alumnus -- former vice chairman, to be exact. Buffett's $5 billion investment in Goldman was at Trott's suggestion. He's worth a fortune, of course, and now runs a boutique investment shop in Chicago, catering to -- wait for it -- extremely wealthy families. That's three votes in his favor: Buffett worships Goldman Sachs, they've done a deal together and Buffett loves family-owned businesses. He greatly respects the people who, like him, can put those deals together. That is the legacy he wants to leave at Berkshire. The rest of the company runs itself. Another thing to like about Trott -- besides the fact that he is a well-connected, well-respected outsider, is that he's a major holder of Berkshire shares: 392 Class A shares as of his latest filing with the SEC. The shares were worth $45 million, about a third of his BDT Capital Partners' $115.1 million publicly disclosed portfolio.
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