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Jacob Wolinsky
Jacob Wolinsky
Articles  | Author's Website |

Meet Ted Weschler: Buffett Auction Winner, Berkshire's New Hire

September 12, 2011 | About:

And how did Buffett get to know Weschler? It's here that fact becomes stranger than fiction.

Every year, Glide, a San Francisco church and mission, is the beneficiary of an auction in which the prize for the top bidder is a private lunch with Buffett.

In the first year of the lunch, 2000, the winner donated $25,000 to Glide. The auction price then proceeded to skyrocket, and in 2010, an anonymous bidder won with an amazing $2,626,311 bid.

Then, this year, a bidder also wishing to be anonymous won by upping that bid by $100, to $2,626,411.

So here, in a state of affairs being disclosed publicly for the first time, is the fact: Weschler was the winning bidder in both years.

In neither year, since he was trying to stay under the radar, did he wish to have lunch in New York, whose Smith & Wollensky steakhouse has usually hosted the lunch -- and given generously to Glide itself.

The lunch (or dinners, as they turned out to be) were instead held in both years, at Weschler's request, in Omaha. Buffett picked the site, one of his favorite restaurants, Piccolo's (whose ambiance is pervasively casual).

Meeting in July, 2010 for the $2,626,311 dinner, the two men liked each other right away. Buffett learned about Weschler's investment success and how he achieved it—the 'how' being as important to Buffett as the gains themselves.

At Buffett's invitation, Weschler later came to the 2011 Berkshire Hathaway (BRKA) annual meeting, held last spring. At a large private dinner on the night of the meeting, he introduced himself to this reporter, made an impression as smart and friendly, and described himself as having a great time.

And then, at this year's Glide dinner, held July 26th, Buffett almost apologetically sounded out Weschler about the possibility of his joining Berkshire. "I very much wanted him to do it, but I didn't expect to get very far with the idea," Buffett told Fortune. "Ted will no doubt make a lot of money at Berkshire. But he was already making a lot of money with his fund -- you can get an idea of that from the size of his Glide bids -- so money wasn't a reason for him to come."

Even so, Weschler said right away he'd think it over -- and within weeks came to the conclusion that he wanted to accept Buffett's offer. For the moment, Weschler isn't explaining his reasons to the press. But this reporter can speculate that Weschler's long-time admiration for Buffett made this an offer he just couldn't refuse.

Certainly his saying yes has rocked many a boat. He is closing his fund, and that, for a lot of happy partners in it, cannot be good news.

Weschler started his fund 12 years after getting an undergraduate degree from Wharton, working for six years at W.R. Grace, and helping to start a Virginia private equity fund, Quad-C. While that fund worked its way toward buyouts, it held the cash of its partners, and Weschler invested it, doing well in the job.

Deciding in 1999 to strike out on his own, he started Peninsula. The fund's first 13F filing with the SEC, for yearend 2000 -- Weschler had by then opened the fund twice to investments -- shows it owned about $150 million of stocks.

His latest filing, for the second quarter of 2011, gives his long position in stocks as almost $2 billion. (That amount would no doubt be higher, were it not that Weschler closed the fund to new money in the 2004-2005 period).

But that $2 billion in long positions only partly tells the story, because in true hedge-fund style, Weschler shorts stocks (positions that do not have to be reported in 13Fs) and also borrows money to leverage the fund's capital.

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About the author:

Jacob Wolinsky
My investment ideas have been inspired by many of value investors including Benjamin Graham, Charles Royce, John Neff, Joel Greenblatt, Peter Lynch, Seth Klarman,Martin Whitman and Bruce Greenwald. .I live with my wife and daughter in Monsey, NY. I can be contacted jacobwolinsky(AT)gmail.com and my blog is www.valuewalk.com

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