Monthly Archives: March 2009

Indian Legend – Successing Buffet

Warren Buffet – the legendary investor and chairman of Berkshire Hathaway Inc. has no comparison for himself. But, in Ajit Jain who joined Berkshire in 1986, Buffet found an extraordinary talent. “: I wrote his parents in New Delhi and asked if they had another one like him at home. Of course, I knew the answer before writing. There isn’t anyone like Ajit,” applauds Buffet in his Annual letter to shareholders for 2008.

Speculations have sparked that Jain, born in Orissa in 1951, would be the successor to 78-year old Buffet at Berkshire Hathaway. Similar speculation made round in mid-2006, when Buffet pledged 85 percent of his stake in the company to the Bill and Melinda Gates Foundation and four family charities.

Some specific mentions by Buffet in the recent letter clearly suggest the extraordinary. Buffet mentioned about Jain’s reinsurance division, headquartered in Stamford, the company’s third major insurance operation staffed by only 31 employees. “This may be one of the most remarkable businesses in the world, hard to characterize but easy to admire” writes Buffet.

Jain graduated from Indian Institute of Technology, Kharagpur in 1972 with a bachelor’s degree in mechanical engineering. Jain’s classmates remember him as one who didn’t take his studies very seriously. However, considering Jain’s later career, his friends believe that the lesson to be learnt is that not taking life too seriously is definitely the way to go. But that may not be entirely true.

Between 1973 to 1976 Jain worked at IBM in India before moving to the United States. In 1978, Jain earned an MBA from Harvard Business School and then joined McKinsey & Co. Jain left McKinsey in 1986 to join insurance operations for Buffet. Then, he admits, he knew very little about the insurance business. But, Buffet writes in his letter: “From year to year, Ajit’s business is never the same. It features very large transactions, incredible speed of execution and a willingness to quote on policies that leave others scratching their heads. When there is a huge and unusual risk to be insured, Ajit is almost certain to be called.”

Buffet’s specific mention makes Jain a dearer choice, he wrote: “Who, you may wonder, runs this operation? While I help set policy, all of the heavy lifting is done by Ajit and his crew. Jain’s business division is already generating $24 billion of float along with hundreds of millions of underwriting profit annually. “But how busy can that keep a 31-person group? Charlie and I decided it was high time for them to start doing a full day’s work,” writes Buffet.

Buffet’s once told a group of shareholders about Jain: “If you see him here, be sure to bow.” And he means it, after-all for Buffet ‘There isn’t anyone like Ajit’.