Greg Abel takes the helm of Berkshire Hathaway at a critical moment for investment

The appointment of Greg Abel as the new CEO of Berkshire Hathaway marks a significant milestone in American corporate history. With approximately $358 billion in available liquidity, the company is in a unique position: it has unprecedented capital, but faces an environment of high valuations that limit attractive investment opportunities. This leadership change occurs in a context where capital allocation decisions have become extraordinarily complex, and strategic patience is emerging as the company’s greatest asset.

The Complex Legacy Greg Abel Inherits

Berkshire Hathaway has experienced a paradigm shift in its capital strategy over recent years. The company has conducted net divestments of its own shares for twelve consecutive quarters, an unprecedented situation in the conglomerate’s history. Berkshire’s share repurchases have been halted for five straight quarters, reflecting Warren Buffett’s strategic stance: when opportunities are not sufficiently attractive, it’s better to accumulate liquidity.

Market valuations reinforce this caution. The S&P 500 index posted a 16% year-over-year return in 2025, extending a three-year bullish streak that began in 2022. However, valuation multiples are well above historical averages, with companies trading at more than five times their net assets, compared to a ten-year average of 3.9 times. Berkshire Class B shares are trading at a price-to-book ratio of 1.6, according to FactSet data, which explains the strategic silence in recent quarters.

Warren Buffett has characterized this cash accumulation as “a huge asset” during the 2025 annual meeting, noting that it provides protection against potential market downturns. In comments to the Wall Street Journal, Buffett expressed confidence in his successor: “Greg has exceeded my expectations in every way, and I expect him to have a 20-year or longer career.” This statement underscores the magnitude of the challenges facing the new leadership.

Greg Abel’s Background and Executive Preparation

Greg Abel arrives at this position after more than two decades working at Berkshire Hathaway, during which he developed a deep understanding of the conglomerate’s operational businesses. His career began when Berkshire acquired 75% of MidAmerican Energy over two decades ago, with Greg serving as president. Under his leadership, the business expanded significantly across the central and western United States, eventually transforming into Berkshire Hathaway Energy through sustained growth based on acquisitions and long-term investments in energy assets.

In 2018, Greg took control of all non-insurance divisions of Berkshire, overseeing a vast portfolio that ranges from confectionery brands to footwear manufacturers and building materials. During these years, he maintained a low profile, avoiding media appearances, declining television interviews, and rejecting opinion columns. His focus remained consistently on operational results, not public projection.

Greg Abel’s background reveals an executive shaped by values of hard work and discipline. Born in the Canadian Prairies, he was involved in income-generating activities from a young age: distributing flyers, recycling bottles for money, and refilling fire extinguishers. Professional hockey played an important role in his development—a sport he continues to teach by coaching his children’s teams today. At the 2025 shareholders’ meeting, Greg expressed his personal values: “If I am to be remembered for anything right now, I would obviously want to be remembered as a great father, but equally, as a coach.” These words reflect the priorities that will shape his corporate leadership.

Expectations for Capital Allocation Under New Leadership

The central question now facing shareholders and investors is: how will Greg Abel deploy this enormous cash reserve in an environment of high valuations? Warren Buffett has expressed confidence in his successor’s ability to make capital decisions: “If you understand the businesses, you understand common stocks,” he stated at the 2024 annual meeting. This suggests Buffett expects Greg to develop his own independent judgment regarding investments.

Berkshire Hathaway reached a market value of $1 trillion in 2024, a feat achieved by only one other U.S. company outside the tech sector in the country’s commercial history. The scale of operations—with roughly 400,000 employees and businesses including BNSF Railway, Dairy Queen, Duracell, Fruit of the Loom, and Geico—presents specific challenges for capital allocation. Small acquisitions have minimal impact on a company of this size, while large-scale acquisitions require considerable time and meticulous evaluation.

Market outlooks on Greg Abel’s next moves vary considerably. Some analysts anticipate that the new leadership will wait for a correction or significant recession before deploying capital aggressively, especially considering Berkshire’s history of paying only a single dividend in 1967, equivalent to 10 cents per share. Taxes remain a critical factor in deciding what to do with these resources, and Berkshire has historically demonstrated discipline in optimizing tax considerations.

What remains unchanged is the fundamental philosophy. Greg Abel has reaffirmed: “We will remain Berkshire. How Warren and the team have allocated capital over the past 60 years will not change.” This statement underscores that the change is of people, not principles. Warren Buffett continues working from the Omaha headquarters, remaining available as a strategic advisor, while Greg Abel now formally controls the checkbook of one of the world’s most important companies.