Warren Buffett to step down from Berkshire Hathaway

One thing to start: Consultant BCG has published its latest annual report on the state of the global asset management industry. Global assets under management grew 12 per cent year-on-year to a record $128tn in 2024. But the report also exposed the vulnerability of the industry: market performance drove 70 per cent of the $58bn in global revenue growth last year — versus 30 per cent from net inflows.

In today’s newsletter:

• Warren Buffett to step down from Berkshire Hathaway

• Trump’s top economic adviser struggles to assuage investors’ nerves

• US economy contracts in the first quarter

Warren Buffett to retire from Berkshire Hathaway

Warren Buffett, the world’s most famous investor, is stepping down from the helm of Berkshire Hathaway after six decades.

The 94-year-old — known as the “Oracle of Omaha” — said he would propose that Greg Abel take over the leadership of Berkshire at the end of this year, write Amelia Pollard and Stephen Foley.

The death of his longtime friend and business partner Charlie Munger in 2023 increased speculation about when Buffett might step down. On Saturday afternoon in Omaha, the answer finally arrived.

Abel, 62, whom Buffett had previously named as his eventual successor, is vice-chair of Berkshire’s non-insurance operations.

Buffett said he had not given Abel or Berkshire’s other directors any advance notice, making the announcement at the very end of a historic 60th annual shareholder meeting in Omaha, Nebraska.

Although Buffett is among the country’s richest individuals with an estimated net worth of about $168bn, he has maintained a folksy aura, attracting shareholders annually to Omaha for a weekend of festivities. He still only takes home a nominal salary of $100,000, as he has done for more than 40 years.

Buffett has amassed thousands of devotees over the years for his investment prowess. According to research by LCH Investments, gains made by Berkshire Hathaway under Buffett’s leadership were 7.8 times greater than that made by the highest-ranked hedge fund manager.

Berkshire’s annual general meetings tend to attract tens of thousands of people from around the world eager to hear his advice. Shareholders who return year after year develop friendships and networks, making the annual event a sort of reunion.

Buffett’s decision to step down from the financial juggernaut certainly marks the end of an era, leading him to quip at the AGM: “That’s the news hook for the day.”

Investors meet Trump’s top economic adviser

Investors dislike uncertainty. The tariff flip-flopping in the US is a case in point, causing a sharp market sell-off that has left investors rattled.

But when hedge funds and major asset managers recently met Stephen Miran, the top economic adviser to US President Donald Trump, nerves were hardly soothed, write Kate Duguid, Costas Mourselas, Katie Martin and Demetri Sevastopulo.

Miran, chair of the Council of Economic Advisers, convened with top hedge funds and other major investors at the White House during which tariffs and markets were discussed. Two people in the meeting described Miran’s comments on the topics as “incoherent” or incomplete.

Others, though, were more optimistic. Another person familiar with the event was encouraged by the administration’s approach to tax cuts and deregulation. About 15 people attended the gathering, including representatives from hedge funds Balyasny, Tudor and Citadel, as well as asset managers PGIM and BlackRock.

The White House said the “administration officials maintain regular contact with business leaders and industry groups about our trade and economic policies.” It added that “the only interest guiding the administration and President Trump’s decision-making, however, is the best interest of the American people”.

Trump’s trade policies have triggered intense volatility in US equity and debt markets, with US government bonds selling off sharply after the president’s April 2 announcement of steep “reciprocal” tariffs.

Other countries are now baring their teeth. On Friday, Japan’s finance minister publicly identified the country’s more than $1tn holdings of US Treasuries as a “card” in its trade negotiations with the Trump administration.

China is also quietly diversifying from US Treasuries, as investors become increasingly anxious about US government bonds.

Chart of the week

The US economy contracted by an annualised 0.3 per cent over the first quarter, as companies in the world’s largest economy responded to Donald Trump’s trade war by rushing to import goods, writes Claire Jones.

The fall in the GDP reading — the first since 2022 — was worse than economists’ most recent forecasts and compared with the 2.4 per cent rise for the fourth quarter.

It was largely the result of companies’ rush to buy goods from abroad ahead of the US president’s sweeping tariffs, with imports rising at an annualised rate of 41 per cent.

Many analysts argued that the headline GDP number was principally brought down by an extraordinary increase in the US trade deficit, rather than reflecting underlying trends.

Morgan Stanley economists said the surge of imports ultimately contributed to inventories, consumption and investment — positive factors in calculating GDP that were not fully reflected in Wednesday’s data.

“In effect, the imports don’t fully appear in the spending parts of the GDP accounts and therefore exaggerate GDP weakness,” they said.

Some economists focus instead on other measures, such as investment and consumer spending.

Wednesday’s figures showed that the sum of consumer spending and gross private fixed investment increased 3 per cent in the first quarter, up on the previous rate of 2.9 per cent.

In a post on his Truth Social network, Trump suggested the figures had “NOTHING TO DO WITH TARIFFS”.

Blaming former president Joe Biden, he added: “I didn’t take over until January 20th . . . When the boom begins, it will be like no other. BE PATIENT!!!”

Five unmissable stories this week

BlackRock’s shareholders are being urged by proxy adviser Institutional Shareholder Services to vote against chief executive Larry Fink’s pay at the group’s upcoming annual meeting.

Capital Group and KKR are aiming to launch new funds spanning private loans, corporate buyouts, and infrastructure and property deals in the latest tie-up between big traditional asset managers and private capital firms.

Ministers in the UK are using strong-arm tactics to pressure pension funds to honour a proposed “voluntary” commitment to invest more in UK assets, according to industry figures. The Conservatives say the move smacks of “desperation”.

Franklin Templeton is aiming to list $1.7bn of Uzbekistan’s state assets on international markets within a year, as part of a plan by the US investment group to put the central Asian country on the map for global investors.

The late Pope Francis grappled with the opaque finances of the Vatican, a significant task that leaves a forbidding challenge for his successor.

And finally

Portraits by Edvard Munch, the Norwegian artist known for his renowned piece The Scream, are on display at London’s National Portrait Gallery. Widely deemed one of the great portraitists of his time, Munch’s work spanned family and friends to lovers and artists, with many of his pictures serving as examples of the human condition.

On show until June 15