Berkshire Hathaway's annual report came out last Saturday. The shareholder letter is a very interesting read and I highly recommend it. One item that jumped out at me was his commentary on other organizations who are nominally in the same business, namely the old LBO firms who he charecterizes as relabled themselves 'private equity'. Given I just finished the book on KKR and did some research on Blackstone, Forstmann Little, Carlyle Group and others, it struck me as quite funny.
But that does bring up an interesting point. I never saw Bershire Hathaway mentioned in any of the books or articles about private equity. However, what Berkshire does is not different, they buy companies. However, Berkshire does not load up the capital structure with debt, is not known for 'turning companies around', does not do mass layoffs, does not look to resell a company within a few years, does not charge their investors and annual management fee, does not charge a percent of profits for their management, and does not charge a percentage of the original purchase as a fee to their managers.
Sadly, Berkshire is so large that the investments that they have to make are huge and potential for fantastic returns is consequently reduced. It begs the question, who is going to tbe the next Berkshire, investing in smaller companies? Is there ever going to be another Berkshire?