This India-Born MBA Can Takeover Warren Buffett’s $620 Billion Business Empire: Who Is Ajit Jain?
Right from the summits of the tech world, to FMCG and retail, Indians have not just raised the bars in excellent deliveries but also have proved to be an epitome of leadership.
The American multinational investment conglomerate, Berkshire Hathaway held a shareholder meeting on Friday, where the 88-year old billionaire and chairman of Berkshire Hathaway, Warren Buffet gave a clue of who might take over the reins of his gigantic empire.
Even though Buffet’s son, Howard Buffet is rumoured to take over Berkshire Empire as the chairman, the Chief Executive’s position is still open and there have been 2 potential names chosen by Buffet and his long time business partner, Charles Munger, 95- Greg Able, 56 and Ajit Jain, 67.
More on the Chosen Ones By Buffett
The ‘Oracle of Omaha’, another name for the third richest man on earth, Warren Buffet promoted the two Able and Jain to the board of directors last year. Abel joined the company in 1992 and oversees Berkshire’s non-insurance operations such as the BNSF railroad, Precision Castparts, retail businesses such and Berkshire Hathaway Energy. Jain, meanwhile has been a longer part of the company, since 1986, in the insurance division and oversees its business in the underlying sector, including auto insurer Geico and re-insurer General Re.
Both of them have worked exceptionally well in their domains, today leading the company as the vice chairman of their respective domains. There are strong speculations of these two either handing the helm of Berkshire Hathaway jointly or at a singular pace. The company has been crackled with these questions in a mass and says that it is taking time as Berkshire Hathaway has a very unbureaucratic way of making decisions.
Warren Buffett wants the future CEO to be someone who has worked for more than 10 years in the company and is trusted by the board. Essentially someone who is not drawn by money but lies his interest in working for the betterment of the company.
Warren’s Most-Favoured Indian Born Star Executive, Ajit Jain:
Ajit Jain, the 66-year old insurance chief at Berkshire Hathaway has moved a step closer to becoming the CEO of the famed investment conglomerate, which the Indian-born executive shares with Greg Abel.
Ajit Jain is an Odisha-born alumnus of IIT-Kharagpur in Mechanical engineering, who did his MBA from Harvard University in 1978. He has professionally worked with IBM and McKinsey and Co., before joining Berkshire Hathaway in 1986, as the insurance exec. Jain is Warren’s most preferred executive and he never misses a change to depict so. Warren says that when Ajit joined the company in 1986, he did not have a day’s experience in the insurance business but due to his resilience and hard work, Ajit has created tens of billions of value for Berkshire shareholders.
“If there were ever to be another Ajit and you could swap me for him, don’t hesitate. Make the trade!” says Warren.
Why is Ajit Jain Fit to Take Over as the CEO?
There are almost multiple reasons for Warren admiring Ajit Jain to great heights, entrusting on to the belief that Berkshire Hathaway could never find another one like Jain. In a letter to his shareholders, Buffet wrote that while opting to save a sinking ship that included himself, his business partner Charlie Munger and Ajit Jain, Swim to Ajit. He has openly praised Jain’s ability to handle critical operations with capacity, speed, decisiveness and most importantly a unique matter of combating the insurance business. The Research analyst, Marcae Skyes says that Jain doesn’t like spotlight but only the insurance business.
Berkshire’s insurance businesses generated after-tax earnings of $1.4 billion from underwriting in 2016, an increase of $208 million from a year ago. Since 1985, Ajit has created an insurance business with float of $37 billion and a large cumulative underwriting profit, a feat no other insurance CEO has come close to matching. He also controls about $123 million of Berkshire stock. Warren Buffet says that Jain has made more money to the company that Buffet himself.
Buffett epitomizes safe, value investing. His investments are carefully scrutinized. Even though the face of the company will change, its culture and investment strategy will remain the same, the idea so central to Buffett. There is no denying that Jain is among the top priorities of the names suggested for the said designation.It now remains to be seen what the board of company directors decide in future.