Ted Weschler

Warren Buffett's Right-Hand Man

Ted Weschler, portfolio manager for Berkshire Hathaway, Inc., right, speaks as Tracy Britt Cool, financial assistant to Berkshire Chairman Warren Buffett, left, looks on prior to the 'Berkshire Hathaway Invest In Yourself 5K' race presented by Brooks Sports, a Berkshire Hathaway Inc. company, on the sidelines of the Berkshire Hathaway shareholders meeting in Omaha, Nebraska, U.S., on Sunday, May 4, 2014. Warren Buffett whose Berkshire Hathaway Inc. joined 3G Capital last year in a $23.3 billion takeover of ketchup maker HJ Heinz Co., said yesterday he'd welcome more deals with the buyout firm. Photographer: Daniel Acker/Bloomberg via Getty Images
Ted Weschler, portfolio manager for Berkshire Hathaway.
  • Why it matters

    Why it matters

    Ted Weschler, 55, is a key figure in Berkshire’s corporate succession plan set by Warren Buffett, the holding company’s 85-year-old board chairman and chief executive who’s known as the “Oracle of Omaha.”

  • Facts

    Facts

    • Warren Buffett, Ted Weschler and another portfolio manager oversee a portfolio of stocks worth more than $100 billion.
    • Berkshire Hathaway is headquartered in Omaha, Nebraska, and is the fifth-largest publicly listed company in the United States.
    • Last year, Berkshire took over a Hamburg-based firm that sells motorcycle clothing, spare parts and accessories.
  • Audio

    Audio

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Ted Weschler feels light years away from the hectic activity of Wall Street. His office is above a bookstore in the relatively unhurried city of Charlottesville in Virginia. He doesn’t bother with a nameplate on the door. Anyone who needs him knows where to find him.

Mr. Weschler is one of the two portfolio managers who work for Warren Buffett’s conglomerate Berkshire Hathaway. Together with the star investor, he manages stocks worth more than $100 billion. When Mr. Buffet, 85, no longer heads his firm, the 55-year-old Mr. Weschler is likely to share the title of chief investment officer with his colleague Todd Combs, continuing to play a crucial role at the Omaha, Nebraska-based operation, the fifth-largest publicly listed company in the United States.

In a letter to shareholders, Mr. Buffett said Mr. Weschler had valuable qualities and the decision to hire him was among Mr. Buffett’s best moves ever.

The man with alert eyes and a gentle voice is an unusual investor, just like his boss. Mr. Weschler spends 95 percent of his time reading. Every morning, his assistant prints out 500 to 700 pages of reading material for him. The sheets are piled atop his desk. Down below are old wine crates in which more documents are stored.

The documents include dossiers on German firms, preferably small- and  mid-sized companies. Mr. Weschler is on the lookout for new takeover targets. Even though he also keeps an eye on other European countries, he says its better to concentrate on Germany because Berkshire has already made an acquisition there.

In early 2015, the company took over Hamburg-based Detlev Louis Motorrad Vertriebs GmbH, a store and mail order firm for motorcycle clothing, spare parts and accessories. Mr. Weschler says the firm is small in terms of volume compared with other Berkshire acquisitions, and Mr. Buffet’s company would like to do more deals like that, though it is also interested in larger transactions. Mr. Weschler says he could imagine deals worth up to €50 million in pre-tax profits.

Mr. Weschler and Mr. Combs each manage a significant block of Berkshire’s investment portfolio. But both executives limit themselves to only a few companies: Mr. Weschler manages the stocks in only seven firms. Mr. Combs has a few more companies. Both executives operate according to the “punch card investing” method that’s Mr. Buffett’s favorite. The star investor advises people to approach investing as if they each had a punch card that permitted only 20 decisions over an entire lifetime. Mr. Weschler says that method leads one to make investments only in those companies that the investor feels extremely confident about.

It remains a secret exactly who decides to buys or sell which stocks at the company. Mr. Buffett has revealed that decisions about especially large purchases are made by him. It’s known that Mr. Weschler manages shares in the automaker General Motors and dialysis company Davita. But much else is shrouded in speculation. For example, who is behind acquiring a stake in Apple? In May, Berkshire revealed that it had purchased Apple shares worth $1 billion. Was the decision made by Mr. Weschler or Mr. Combs? Mr. Weschler would only say that Mr. Buffett likes to keep people guessing.

Mr. Weschler met Mr. Buffett via a charity auction. Each year, the Methodist Glide Church in San Francisco holds an auction, and the top bidder’s prize is a lunch with the so-called “Oracle of Omaha.” In 2010, Mr. Weschler offered more than $2.6 million and was the top bidder. The two men hit if off immediately. A year later, Mr. Weschler raised his bid by $100 and won again. At the second meal, Mr. Buffett offered him a job.

Before Mr. Weschler switched to Berkshire, he had his own hedge fund, Peninsula Capital, with a volume of around $2 billion. A large part of the shares came from the chemical company W.R. Grace, Mr. Weschler’s first employer, which went bankrupt in 2001. Six years later, Mr. Weschler worked out a deal with the plaintiffs who had driven the company into insolvency with asbestos-related lawsuits and thereby prepared the way for a comprehensive restructuring. The stock rose to 40 times its value.

Mr. Buffett sought out his investment manager carefully. In a letter to shareholders, Mr. Buffett said Mr. Weschler had valuable qualities and the decision to hire him was among Mr. Buffett’s best moves ever.

Mr. Buffett took over crisis-ridden textile manufacturer Berkshire Hathaway 51 years ago and eventually turned it into an unparalleled holding company. Along with stakes in companies such as Coca-Cola and Wells Fargo, Berkshire also has energy, insurance and chemical firms in its portfolio, as well as about 80 small and mid-sized companies. Mr. Buffett is chief executive, head of the administrative board and chief investment officer.

When he is no longer at the head of Berkshire, his responsibilities will be handled by other people. For example, his eldest son, Howard, is set to be head of the administrative board and will monitor Berkshire’s company values and culture.

Could Mr. Weschler imagine becoming the chief executive someday?

No, he said without hesitation.

“I want to be at the head of small companies and keep the number of people working under me as small as possible. My primary passion is investing.”

 

Astrid Dörner is part of Handelsblatt’s team of correspondents covering finance and U.S. corporations in New York. To contact her: adoerner@handelsblatt.com

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