Ted Weschler of Charlottesville, Va., paid $2.6 million dollars at a charity auction in both 2010 and 2011 to have lunch with Warren Buffett.
In a press release, yesterday, Berkshire Hathaway announced that Weschler was joining Buffett and another partner to manage some of Berkshire's equity holdings. But the interesting part comes later in the release, when the company says:
Warren Buffett, Berkshire's Chairman, will continue, however, to manage most of the funds until his retirement.
After Mr. Buffett no longer serves as CEO, Todd and Ted – possibly aided by one additional manager – will have responsibility for the entire equity and debt portfolio of Berkshire, subject to overall direction by the then-CEO and Board of Directors. With Todd and Ted on board, Berkshire is well-positioned for successor investment management at the time Mr. Buffett is no longer CEO.
The Financial Times says the unusual investment in a job interview has paid off. Weschler's hedge fund manages about $2 billion in assets. In his new job, Weschler will manage a $1 to $3 billion slice of Berkshire's equity securities. But when Buffett retires that could be much, much more as Berkshire's total equity securities are $66 billion.
The FT adds some background:
Mr Weschler, who is not widely known in the fund management community, first came to Berkshire's attention when he spent more than $5m in charity auctions to have lunch with the legendary investor, according to an interview with Mr Buffett in Fortune magazine.
The unusual nature of their meeting raised questions about the level of involvement of Berkshire's board in the process of choosing a replacement, said Alice Schroeder, author of The Snowball, a biography of Mr Buffett. "Only at Berkshire Hathaway can you get a job by paying $5m for an interview," she said.