Ajit Jain leads pack to take over from Warren Buffett
The recent prostate cancer diagnosis of Warren Buffett, chairman and CEO of Berkshire Hathaway, more famous as investment guru and the world's third richest man, has once again fuelled speculation of his succession, with India-born Ajit Jain seen as front-runner for the position. HT reports.business Updated: May 08, 2012 23:18 IST
The recent prostate cancer diagnosis of Warren Buffett, chairman and CEO of Berkshire Hathaway, more famous as investment guru and the world's third richest man, has once again fuelled speculation of his succession, with India-born Ajit Jain seen as front-runner for the position.
Jain heads the $ 1,43.7 billion (Rs. 7,47,240 crore) investment conglomerate's reinsurance division - a vertical that he has helped develop from scratch. Though he has relatively little experience of big-ticket acquisitions, his discipline and ability to take risks without looking foolish has earned him an enviable reputation.
"From a standing start in 1985, Ajit has created an insurance business with float of $34 billion and significant underwriting profits, a feat that no CEO of any other insurer has come close to matching," Buffett said in his letter to Berkshire shareholders last year. "He insures risks that no one else has the desire or the capital to take on. His operation combines capacity, speed, decisiveness and, most importantly, brains in a manner that is unique in the insurance business. Yet he never exposes Berkshire to risks that are inappropriate in relation to our resources."
Born in Orissa, and an alumni of IIT Kharagpur, Jain's ability to take risks matches that of Buffett's. At Berkshire, he has specialised in mega catastrophe coverage. In the aftermath of the 9/11 attacks on the World Trade Centre in New York, for example, Jain insured the Sears towers in Chicago, America's tallest building disregarding all do's and dont's of the insurance business.
Berkshire Hathaway's stock is known to give double-digit returns even while the world economy remains unstable.
In the last three years, though, it has underperformed the S&P500, which records returns of the top 500 US companies.
"This is a tricky time for investment across the world and Berkshire is under the weather," said a market analyst in Mumbai. "But a change of guard may just do the trick as a new chief would bring in new ideas and Jain has all the credentials to have a go."
Jain is 60, but since Buffett is 81, that is unlikely to be held against him.