Building on a Legacy: Greg Abel’s First Quarter Performance
Stepping into the role of CEO at Berkshire Hathaway is a monumental task, given the legendary track record of Warren Buffett. However, Greg Abel has hit the ground running, deploying billions of dollars in capital during his first quarter at the helm. By focusing on both wholly owned subsidiaries and strategic equity positions, Abel has already demonstrated a sharp eye for value, with his three largest investments showing strong performance early in his tenure.
1. The Acquisition of OxyChem
One of the most significant moves under Abel’s leadership was the $9.7 billion cash acquisition of Occidental Petroleum’s chemicals business, OxyChem. Negotiated while the chemical industry was near the bottom of an earnings cycle, the deal was valued at approximately 8 times the unit’s 2025 EBITDA.
The timing proved fortuitous. As global supply chain disruptions—exacerbated by geopolitical tensions in the Middle East—have tightened the market, American chemical producers have gained substantial pricing power. Additionally, Berkshire retained its preferred shares in Occidental Petroleum, ensuring a steady 8% dividend yield on a roughly $8.3 billion investment.
2. A Strategic Foothold in Tokio Marine
Abel also expanded Berkshire’s global reach through a $1.8 billion investment in the Japanese insurer Tokio Marine, securing a 2.5% stake. This move goes beyond a simple equity purchase; it includes a quota-share agreement where Berkshire’s National Indemnity subsidiary absorbs some of the insurer’s risk.
While some market observers noted that Berkshire paid a premium for the shares, the company’s strong financial trajectory justifies the decision. Tokio Marine reported a 17% year-over-year increase in underlying profit, supported by robust international growth. The partnership provides Tokio Marine with increased flexibility to return capital to shareholders, creating a synergistic relationship that benefits both firms.
3. Doubling Down on Alphabet
Perhaps the most high-profile move was Abel’s decision to triple Berkshire’s position in Alphabet. With an investment of approximately $11 billion, Alphabet has ascended to become the conglomerate’s fifth-largest marketable equity position.
The timing of this purchase proved impeccable, as Alphabet’s stock price surged by roughly 35% following a strong first-quarter earnings report. The company’s focus on artificial intelligence has been a major growth catalyst, with Google Cloud revenue jumping 63% and operating margins expanding significantly. With continued demand for AI accelerators and Gemini-based services, Alphabet remains a pillar of growth in Berkshire’s portfolio.
Looking Ahead
While it is unrealistic to expect any leader to perfectly mirror the historic success of Warren Buffett, Greg Abel has established a clear strategy focused on disciplined acquisitions and high-conviction growth. By balancing stable, cash-generating industrial assets with strategic, tech-forward equity positions, Abel has positioned Berkshire Hathaway to maintain its momentum in an evolving global market.
