Trott on the march: is he Buffett's chosen successor?

Banker's exit from Goldmans fuels speculation about Berkshire's future

Warren Buffett says you could torture him, and he still wouldn't tell. The world's most famous investor, the Sage of Omaha, has chosen his successors, the duo who will take over at the helm of the Berkshire Hathaway business empire, but he's not saying who it is. He's being astute, as ever. Watch how power and influence drains away from a second-term president, for example, or from a British prime minister who declares he'll stick around for only a while longer. But it cannot stop Mr Buffett's legion of followers from guessing.

After all, Mr Buffett is 78.

The topic will no doubt be on the minds of many of the 30,000 Berkshire Hathaway investors who are expected to make the annual pilgrimage to Omaha, Nebraska, for the company's shareholder meeting in May. And Mr Buffett will no doubt point them to his latest statement on the matter – in his letter to them last month, when he said "all candidates currently work for or are available to Berkshire and are people in whom I have total confidence" – and then say no more.

Except that this time, there has been a big flurry of speculation about one name in particular, a certain Byron Trott, who just quit as head of the Midwestern office of Goldman Sachs, in Chicago. Mr Trott is "a rare investment banker who puts himself in his client's shoes", Mr Buffett has said, praise indeed from a man who is normally disdainful of "the priesthood of finance" and bankers out for a fast buck. Mr Trott is setting up on his own, creating a new merchant bank called BDT Capital Partners, and Mr Buffett likes him so much he is buying into the company.

The two men share a Midwestern background and sensibility, hailing from a part of the US that usually spurns the flash of the West Coast or the cut-throat instincts of the East. It is in these roots that you can find the origins of Mr Buffett's own homespun wisdom, and they are why he has not ever moved from his native Omaha, despite turning Berkshire into one of the world's largest companies, spanning insurance, energy and consumer goods, and with stock market investments in some of the most famous brands on the planet.

In Chicago, Mr Trott is most famous as a workaholic, jetting around the 13 states in his purview and leaving voicemail messages for clients in the middle of the night. Aged 50, after more than half a lifetime at Goldman Sachs, he is finally going to tap an extraordinary Rolodex of uber-rich contacts for himself rather than the firm.

Investment bankers are the diplomats of finance, always searching for a deal that will make all the parties happy, and Mr Trott is the quintessential middleman. He is well-connected, discreet and eminently trustworthy, and he speaks his mind.

His first job for Goldman was as a stockbroker for wealthy clients, a job that put him into the orbit of the wealthy families of the Midwest – the Mars and Wrigley families, whose confectionery companies he helped to merge last year, or the Pritzker family behind the Hyatt hotels chain, on whose board he sits.

Whether it is watching the Chicago Bears American football team from a box at the city's Soldier Field, or advising the Art Institute of Chicago how to manage its funds, or sitting on the board of trustees of his alma mater, the University of Chicago, he intertwines fun and philanthropy with hobnobbing with the great and good. When he stumped up $14,000 (£10,000) for tickets to the David Letterman show and a posh dinner in New York, it was all in aid of one of Chicago's most prestigious ballet companies.

Even his political donations look astute. Whilst he has given most money to the Republican party, he has attended fundraisers for politicians on both sides of the aisle and of both hues in presidential races. Perhaps most notably, he was backing Barack Obama as far back as 2003, a year before the wannabe Senator for Illinois had made that career-changing appearance at the Democratic convention.

His one piece of flash is a giant home on the shore of Lake Michigan, built from scratch to a Robert Stern design. The three-acre parcel of land alone cost him $11.4m, and the house boasts a pool, a boathouse and numerous porches.

So far, so banker. What marks him out, at least according to Mr Buffett, is his smarts, an ability to see deals from both buyer and seller's point of view. For Mr Trott, unlike most, has a business background of his own, stretching back into his teens. At about the same age as Mr Buffett was hawking pinball machines to local businesses, the young Byron Trott borrowed $30,000 from his father to launch a clothing shop for the teenagers of his native Union, Missouri, a small town near St Louis. "There was no local place for kids to buy clothes other than Wrangler jeans and overalls," he would say later. At university, he did it again, selling sportswear.

Mr Buffett became close to him earlier this decade, after Mr Trott brought Berkshire Hathaway a trio of acquisitions that turned out very nicely for all sides, after which the Sage of Omaha wrote: "He understands Berkshire far better than any investment banker with whom we have talked and – it hurts me to say this – earns his fee."

The Berkshire faithful measure the fortunes of Mr Buffett's likely heirs according to the amounts of praise he lavishes on them in his long annual letter, so Mr Trott has been on the radar since that mention in 2003. He is intensely private and protective of his family, though, so may well prefer to stay behind the scenes, unlike the gregarious Mr Buffett. Much could also depend on the progress of his new business venture, prospects for which look strong.

And we should end on a word of wisdom from the Sage's most recent letter. "I also want to assure you that I have never felt better. I love running Berkshire, and if enjoying life promotes longevity, Methuselah's record is in jeopardy."

The contenders: Four who could take over Buffett's mantle

Ajit Jain

When Ajit came to Berkshire in 1996, Mr Buffett wrote: "I did the logical thing: I wrote to his parents in New Delhi and asked if they had another one like him at home."

Mr Jain runs Berkshire's reinsurance arm, one of the world's biggest insurers of insurance companies, with a team of just 31 people.

Richard Santulli

NetJets is one of Mr Buffett's favourite firms, offering fractional ownership of private jets to not-quite-super-rich Americans. Mr Santulli invented the concept, founded the company and still runs it under the Berkshire umbrella, after selling out to his most famous customer.

David Sokol

The 52-year-old David Sokol is one of the most feted corporate bosses in the US, having been chief executive and now chairman of the energy firm MidAmerican since 1989, turning it into one of the most powerful in the land. His charity work mentoring students endears him to Mr Buffett.

Tony Nicely

Chief executive of Geico, Berkshire's insurance arm, Olza "Tony" Nicely is bookies' favourite to take over as chief executive of the parent. He is loyal to Geico to the point of obsession, and has a youthful ambition despite his 64 years. Mr Buffett notes that "Tony feels Geico is just getting started".

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Recruitment Genius: Technical Report Writer

£25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...

MBDA UK Ltd: Indirect Procurement Category Manager

Competitive salary & benefits!: MBDA UK Ltd: MBDA UK LTD Indirect Procurement...

Day In a Page

Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

Isis hostage crisis

The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Maverick artist Grayson Perry backs our campaign
Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

The runaway buccaneers and the ship full of gold

Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

Assisted Dying Bill: 'I want control of my life'

This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
Move over, kale - cabbage is the new rising star

Cabbage is king again

Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
11 best winter skin treats

Give your moisturiser a helping hand: 11 best winter skin treats

Get an extra boost of nourishment from one of these hard-working products
Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee
World War Z author Max Brooks honours WW1's Harlem Hellfighters in new graphic novel

Max Brooks honours Harlem Hellfighters

The author talks about race, legacy and his Will Smith film option to Tim Walker
Why the league system no longer measures up

League system no longer measures up

Jon Coles, former head of standards at the Department of Education, used to be in charge of school performance rankings. He explains how he would reform the system