Sometimes the cutesiness of Berkshire Hathaway Inc. is part of its endearing charm. Sometimes it is a minor quirk to be brushed aside. Occasionally, it can mislead, as happened this week when Warren Buffett’s favorite scribe, Carol J. Loomis of Fortune magazine, began her insider’s report on the hiring of 50-year-old Ted Weschler, the founder of Peninsula Capital Advisors LLC, as a Berkshire investment manager. She wrote: “It is surely unprecedented for a person to spend $5,252,722 to get a job, but in a funny way, that is precisely what Ted Weschler, of Charlottesville, Virginia, did.”
At first blush, the Fortune description of the Weschler hiring wasn’t at all inspiring: A “cute meet” in which Weschler twice spent millions to win a charity auction for a meal with Buffett. At 81, the Berkshire chairman and chief executive officer is beginning to delegate his responsibilities for investing the company’s $100 billion portfolio to as many as three money managers. Those meetings led directly to Buffett offering Weschler one of the most prestigious jobs in asset management. “I should have bid higher,” a few people joked at a meeting of asset managers that I attended this week.
Weschler (pronounced WESH-ler) will be winding down Peninsula and joining Berkshire early in 2012 as the second member of a team launched last October, when the Omaha, Nebraska-based company announced the hiring of Todd Combs of Castle Point Capital Management LLC.
Understated Qualifications
It’s not the first time that Buffett has hired someone who happened to be smart (or aggressive) enough to seek him out. He did it with Combs as well. This time, though, the manner of meeting was incidental. And Berkshire wound up with someone whose qualifications, if anything, have been understated.
Weschler may be the most important hire Buffett has made in decades. He isn’t just an investor, though his $2 billion portfolio returned 1,236 percent to Peninsula investors over 11 years. “He plays all the instruments in the orchestra,” says Steve Blaine, who served on the board of Virginia National Bank with Weschler.
He does, in fact, cover all the bases: finding acquisitions, financing them, overseeing management of acquired companies, designing their compensation, allocating capital of the entity that owns the businesses, and understanding lending and credit markets from a bank’s perspective. He also knows how to finance acquisitions in special situations such as bankruptcies; manage long-tailed risks like his former employer W.R. Grace & Co.’s asbestos liability; and control equity- portfolio risk in a volatile market using positioning, derivatives and moderate leverage.
For entire article: http://www.bloomberg.com/news/2011-09-15/schroeder-the-hidden-meaning-behind-buffett-s-hiring.html
At first blush, the Fortune description of the Weschler hiring wasn’t at all inspiring: A “cute meet” in which Weschler twice spent millions to win a charity auction for a meal with Buffett. At 81, the Berkshire chairman and chief executive officer is beginning to delegate his responsibilities for investing the company’s $100 billion portfolio to as many as three money managers. Those meetings led directly to Buffett offering Weschler one of the most prestigious jobs in asset management. “I should have bid higher,” a few people joked at a meeting of asset managers that I attended this week.
Weschler (pronounced WESH-ler) will be winding down Peninsula and joining Berkshire early in 2012 as the second member of a team launched last October, when the Omaha, Nebraska-based company announced the hiring of Todd Combs of Castle Point Capital Management LLC.
Understated Qualifications
It’s not the first time that Buffett has hired someone who happened to be smart (or aggressive) enough to seek him out. He did it with Combs as well. This time, though, the manner of meeting was incidental. And Berkshire wound up with someone whose qualifications, if anything, have been understated.
Weschler may be the most important hire Buffett has made in decades. He isn’t just an investor, though his $2 billion portfolio returned 1,236 percent to Peninsula investors over 11 years. “He plays all the instruments in the orchestra,” says Steve Blaine, who served on the board of Virginia National Bank with Weschler.
He does, in fact, cover all the bases: finding acquisitions, financing them, overseeing management of acquired companies, designing their compensation, allocating capital of the entity that owns the businesses, and understanding lending and credit markets from a bank’s perspective. He also knows how to finance acquisitions in special situations such as bankruptcies; manage long-tailed risks like his former employer W.R. Grace & Co.’s asbestos liability; and control equity- portfolio risk in a volatile market using positioning, derivatives and moderate leverage.
For entire article: http://www.bloomberg.com/news/2011-09-15/schroeder-the-hidden-meaning-behind-buffett-s-hiring.html
