Warren Buffett's successor Greg Abel ramps up Berkshire Hathaway stake significantly

Published Tue, Oct 4 202210:41 AM EDT

Greg Abel, Warren Buffett's designated successor, just increased his stake in Berkshire Hathaway significantly. Abel, vice chairman of Berkshire's non-insurance operations, established a $68 million position in Berkshire Class A shares on Thursday at between $405,000 and $408,000 per share, a regulatory filing showed. The price range represents a 25% discount from Berkshire's all-time high of $544,389 reached in March. "It likely may represent a shift as he prepares to assume more responsibility," said Cathy Seifert, a Berkshire analyst at CFRA Research. "Not a whole lot is ever telegraphed out of Berkshire, but I think this represents a pivot point." Abel has been an heir apparent for Buffett for a few years after the "Oracle of Omaha" and his longtime business partner Charlie Munger hinted at his eventual role in the conglomerate at recent annual shareholder meetings. However, up until this point, Abel, who runs Berkshire's massive energy empire, hadn't been a major shareholder himself. A March proxy filing showed he owned 5 A shares and 2,363 B shares, which were worth less than $3 million. Meanwhile, Abel's compensation over the five years including 2022 would likely to be close to $95 million, according to company filings. "This is an important first step for Mr. Abel to demonstrate his long-term commitment to BRK, as well as his alignment with shareholders," James Shanahan, Berkshire analyst at Edward Jones, said in a note. Abel recently sold his 1% stake in the company's Berkshire Hathaway Energy unit for $870 million. The action made some believe he has the opportunity and capital to further increase his stake in Berkshire. Buffett, 92, has been increasing Berkshire's exposure to the energy sector, ramping up his stakes in Chevron and Occidental Petroleum . Some Buffett watchers view the moves as a way to pave the way for his successor Abel, who has been leading the conglomerate's energy unit Berkshire Hathaway Energy. Berkshire acquired MidAmerican Energy in 1999, and Abel became CEO of MidAmerican Energy in 2008, six years before it was renamed Berkshire Hathaway Energy in 2014.