Warren Buffett says he's 'going quiet', picking up donation pace

Warren Buffett

Warren Buffett, the billionaire investor who turned an aging textile mill into a more than $1 trillion conglomerate, said he’s “going quiet,” marking the end of an era for one of the business world’s most-watched investing gurus.

In a letter disclosing that he’s donating more than $1.3 billion to four family foundations, the 95-year-old investor, who is stepping down from his role of chief executive officer at the end of the year, said he’s going to stop writing Berkshire Hathaway Inc.’s annual letters and speaking at its meetings.

The letter marks another step in Buffett’s year of hand-off steps following his surprise announcement at the end of the firm’s annual shareholder meeting that he would finally pass the reins to longtime deputy Greg Abel. Buffett’s leaving his 63-year-old deputy a $382 billion cash pile that has grown over the past few years, as the billionaire refrained from doing large acquisitions and buying back his firm’s shares.

While he said he generally feels “good,” he is planning to “step up the pace” of his charitable giving to his kids’ foundations while he’s still alive.

“Though I move slowly and read with increasing difficulty, I am at the office five days a week where I work with wonderful people,” Buffett said in the letter. “Occasionally, I get a useful idea or am approached with an offer we might not otherwise have received. Because of Berkshire’s size and because of market levels, ideas are few – but not zero.”

Letters such as the one released Monday, along with the ones that accompany the firm’s annual results, have become a must-read for his fans, who seek out the pearls of wisdom, investment advice and witticisms that drew a legion of fans to the legendary investor.

In the letter, Buffett said he wanted to accelerate the pace of his lifetime donations to his children, so they can dispose of his entire estate. But his children — Susie, Howard and Peter — are in their 60s and 70s, with Buffett saying it’d be a “mistake” to wager that they all might enjoy his “exceptional luck” in aging.

“All three children now have the maturity, brains, energy and instincts to disburse a large fortune,” Buffett said. “They will also have the advantage of being above ground when I am long gone and, if necessary, can adopt policies both anticipatory and reactive to federal tax policies or other developments affecting philanthropy.”

Buffett cautioned that he would want to keep a “significant” amount of Class A shares until Berkshire Hathaway shareholders are as comfortable with Abel as they were with him and his longtime business partner, Charlie Munger.

“That level of confidence shouldn’t take long,” Buffett said. “My children are already 100% behind Greg as are the Berkshire directors.”

While he will remain as chairman, Buffett said last May that Abel will have the final word on the running of Berkshire Hathaway’s operations and in terms of capital deployment. Buffett is expected to complete the handoff to Abel at year-end.

In his letter Monday, Buffett reiterated his trust in Abel, saying the executive has exceeded his expectations since he first thought of him as a successor.

“I can’t think of a CEO, a management consultant, an academic, a member of government – you name it – that I would select over Greg to handle your savings and mine,” Buffett said in the letter.

Charitable Donations:

He intends to continue to address shareholders in his traditional Thanksgiving missive, which also details his massive philanthropic donations.

Buffett will convert 1,800 of Berkshire’s Class A shares into 2.7 million Class B shares, according to the letter. He’ll then give 1.5 million of those shares to the Susan Thompson Buffett Foundation, named for his late wife, and 400,000 to each of his children’s foundations, the Sherwood Foundation, the Howard G. Buffett Foundation and NoVo Foundation.

In 2006, Buffett started making donations to the Gates Foundation, as well as to foundations tied to his children. He later started the Giving Pledge with Bill Gates and Melinda French Gates, with the objective to donate his fortune either in his lifetime or at his death. Last year, Buffett announced that the Gates Foundation wouldn’t receive any more donations after his death, with Buffett’s daughter and two sons overseeing a new charitable trust.

“If my children simply do a decent job, they can be certain that their mother and I would be pleased,” Buffett said. “Their instincts are good and they each have had years of practice with very small sums initially that have been irregularly increased to more than $500 million annually.”