Lou Simpson, who oversees investments at Berkshire Hathaway’s GEICO Corp. car insurance unit, plans to retire at the end of the year, Debbie Bosanek, an assistant to Berkshire CEO Warren Buffett, said in an e-mail.
Mr. Simpson’s departure strips Mr. Buffett of an executive he has called a “Hall of Fame” investor as the billionaire prepares Berkshire for his own eventual departure.
Mr. Buffett brought Mr. Simpson to Berkshire with the 1996 acquisition of GEICO and touted the new arrival as a backup to handle Berkshire’s investments in the event of an emergency. Mr. Simpson’s equity portfolio at GEICO posted an average annual gain of 20% in the 25 years through the end of 2004, according to that year’s annual report. Mr. Buffett manages investments for Berkshire’s other insurance subsidiaries.
Mr. Buffett, who oversees an equity portfolio of about $55 billion and more than 70 operating units, plans to have his responsibilities split among more than one manager when he retires. Successors have not been named. Responsibility for Mr. Simpson’s portfolio will go to Mr. Buffett, according to published reports.
Stockholdings built by Mr. Simpson are reported alongside Mr. Buffett’s positions in Berkshire’s quarterly filings. Mr. Simpson typically focuses on smaller companies and invests less than Mr. Buffett, according to the 2004 annual report. Mr. Simpson, who ended that year with about $2.5 billion in equities, makes his decisions independently, Mr. Buffett said.
“I typically learn of Lou’s transactions about 10 days after the end of each month,” Mr. Buffett said in his shareholders’ letter published in 2005. “Sometimes, it should be added, I silently disagree with his decisions. But he’s usually right.”
Republic Services, North America’s second-largest trash hauler, and CarMax, the No. 1 U.S. seller of used cars, are among the stocks owned by GEICO, according to a Berkshire filing this month. Wells Fargo, the largest home lender in the U.S. and one of Mr. Buffett’s biggest shareholdings, is also in GEICO’s portfolio, according to the filing, which listed stock investments as of June 30.