The world’s biggest investor calls it a profession | USAEMALL.com

One thing to start: OpenAI will remain under the control of the group’s non-profit arm, with the ChatGPT maker reversing course after intense criticism from Elon Musk over plans to convert into a for-profit company.

And another thing: Credit Suisse agreed to pay $511mn and plead guilty to helping American taxpayers hide more than $4bn from authorities under an agreement with the US Department of Justice, admitting it violated a deal struck a decade ago for similar reasons.

And a macro plug: How should central banks navigate the new world order? Pose your questions about monetary policy to Chris Giles and other FT experts, and have them answered in a live Q&A on Wednesday.

In today’s newsletter:

• Berkshire after Buffett

• Private equity: past its peak?

• 3G bets $9bn on ugly, comfortable shoes

Take a bow, Warren Buffett

Many fortunes on Wall Street have been made with one good trade, but maintaining excellence in multiple market cycles and exiting on a high note is what makes Warren Buffett stand apart.

On Saturday, Buffett announced he would soon step down as chief of his conglomerate Berkshire Hathaway. 

It will mark the end of a six-decade run in which Buffett transformed a failed textile manufacturer into a financial giant after striking canny takeovers such as insurer Geico, building massive stakes in corporate icons including Coca-Cola and even rescuing Goldman Sachs during the 2008 crisis.

Even this year, at the ripe old age of 94, the Oracle of Omaha continued to demonstrate his magic.

In April, when markets were in freefall, Berkshire was one of the few large finance companies up on the year, in part because of the enormous cash stockpile it had built up by exiting Apple, arguably its greatest trade.

Berkshire first bought into the tech giant in 2016 when it was already the largest company on earth. A flip-phone user in his eighties, Buffett had been reluctant to invest in technology for much of his career, missing out on huge potential gains.

But he and his investment lieutenants Ted Weschler and Todd Combs ultimately found their way in and quickly caught up.

A year ago, the FT calculated Berkshire had spent about $40bn for a stake worth $175bn in 2023, but the gains likely increased as Apple rallied through the year before the conglomerate sold out.

The trade exemplified Buffett’s ability to wait years to understand an investment, then make a decisive bet when an opportunity arose. 

Under Buffett’s watch, $1 invested in Berkshire has turned into roughly $55,000, versus $390 for the S&P 500 index, according to Berkshire’s calculations.

Berkshire now must prove it can thrive under Buffett’s publicity-shy successor Greg Abel, who will oversee a more than $1tn corporate empire holding a $350bn cash pile.

The question for many investors is what Abel will choose to do with that firepower. Some have dubbed it “mission impossible.” 

The upside is that Berkshire has minted throngs of millionaires across the US, giving the conglomerate a halo that won’t soon fade.

But some speculate whether Berkshire will face new threats from the outside such as some investors pushing to break the conglomerate up. Abel will be protected from these forces in the short term by Buffett’s massive stake.

Already there are challengers on the horizon. On Monday, Bill Ackman of Pershing Square struck a deal to take control of a listed property group with the goal of transforming it into an acquisition vehicle in the mould of Berkshire.

Ackman’s play underscores another of Buffett’s rare traits. Buffett charged shareholders no fee for his genius, even as he compounded money better than any PE firm or hedge fund. 

But Ackman will charge shareholders a fee of 1.5 per cent of the market gains he creates above inflation.

It goes to show there will never be another Warren Buffett.

The end of days for private equity?

“Continuation funds [are] the biggest scam ever because you say ‘I cannot sell the business, I’m going to lever it again’.” 

Those words from the Egyptian industrialist and billionaire investor Nassef Sawiris came as part of rare and wide-ranging candid remarks on the challenges facing the multitrillion-dollar private equity industry.

While Sawiris took particular aim at the use of “continuation funds” — a tactic used by private equity groups to recycle capital rather than selling or listing an asset — he more broadly described the buyout sector as past its peak.

“Private equity has seen its best days,” Sawiris, who has invested parts of his fortune in funds managed by multiple buyout firms, told DD’s Ivan Levingston and Arash Massoudi.  

Private equity groups have suffered acutely from a broader slowdown in dealmaking and higher interest rates. As a result, many have struggled to sell off their assets to return money to their investors.

Sawiris, who is overseeing the break-up of his Dutch-listed chemicals and fertiliser empire OCI, was approached about using proceeds from his own recent asset sales to buy private equity-backed groups looking for an exit.

However, he did not find any one of them to be an attractive target for a deal.

He also criticised private equity managers’ priorities, saying they were far more focused on raising capital for their investment vehicles than their portfolio companies’ operational performance.

“They’re spending 90 per cent of their time fundraising and 10 per cent managing the businesses,” Sawiris said. “They attend board meetings, have a board dinner and there’s a reason why they didn’t execute the plan.”

Read on for his views on the PE groups best positioned to succeed in the current market.

And if you missed part one of his interview, in which he explains why he is moving out of the UK, read that here.

Skechers’ escape from public markets

A pair of Skechers might not be the flashiest kicks that money can buy, but their comfort made them a hit brand for all ranks of society in this dressed-down era.

The footwear company has assembled an array of brand ambassadors, ranging from US TV personality Martha Stewart to England football captain Harry Kane.

There’s even a “Skechers x Snoop Dogg” collection that’s been “blessed by Tha Doggfather himself”.

It’s been a long journey to the top of the footwear market. Founded in 1992, Skechers experienced a burst of growth in the 2010s with its focus on the comfort that other brands had neglected.

The move paid off; Skechers now claims to be the world’s third-largest shoemaker by sales. In the first quarter of 2025, it posted record sales of $2.4bn.

Its success hasn’t gone unnoticed. On Monday, the company was taken private by 3G Capital for $9.4bn in cash. The purchase marks a return to dealmaking for the New York-based private equity group, best known for its merger of Kraft and Heinz. 

But it’s a new approach for 3G, whose founders Jorge Paulo Lemann, Alexandre Behring, Beto Sicupira and Marcel Telles rose to prominence from roots in Brazil by installing ruthless cost-cutters at corporate icons such as Anheuser-Busch and Kraft Heinz.

Recently, 3G has turned to partnering with families and founders to grow their businesses over the long term. 

The Skechers deal fits the friendlier 3G: founder Robert Greenberg will stay on as chief executive, and the existing management team — including Greenberg’s son Michael — will stay on to run the business.

There is some opportunism on 3G’s part. Skechers’ share price had fallen about 30 per cent since the start of the year, as Trump’s trade war weighed on footwear companies. China and Vietnam — the target of some of the biggest tariffs — provide most of its manufacturing.

But 3G is betting the trade wars will pass — so much so it cannot back out of the deal if Trump doesn’t capitulate on his “liberation day” tariff agenda.

The sneaker mega-deal specifically exempts any trade war from being a “material adverse” change that would give 3G an opening to back out of the deal.

Job moves

• Eutelsat, the owner of Starlink rival OneWeb, has appointed Jean-François Fallacher as its new chief executive. Fallacher, who heads the French division of telecom operator Orange, replaces Eva Berneke, who had held Eutelsat’s top job since 2022.

• Wells Fargo has hired Joshua Moradfar as a managing director in its healthcare investment banking team in Los Angeles. He will join after a period of gardening leave from JPMorgan Chase, where he was a managing director in the healthcare services business. 

• Tidal Partners has hired Bill Shope as partner. He joins the firm in New York and has previously served as a managing director at Credit Suisse and Goldman Sachs.

Smart reads

Citi del Sol Citigroup promised junior bankers sea, sun and eight-hour work days when it opened an office in Spain’s Costa del Sol, the FT reports. Less than three years later, the office is closed and the party is over.

Psy ops America’s most powerful business leaders quietly lobbied the US president to win tariff reprieves, the FT writes. Here’s how they did it.

A troubling precedent Warren Buffett’s marathon run atop Berkshire Hathaway will spur emulators to push for special treatment, Lex argues. But Buffett was one in a million.

News round-up

US coal producer Peabody threatens to terminate deal with Anglo American (FT)

Donald Trump to block Harvard from federal grants (FT)

Sunoco strikes $9bn deal for Parkland to form N American fuel distributor giant (FT)

Santander raises €7bn from Poland sale (FT)

Ford expects $1.5bn profit hit from Trump tariffs (FT)

Berkshire shares slip as Warren Buffett prepares to step aside as CEO (FT)

Mattel quickens effort to move production from China as tariffs hit toys (FT)

Maker of AI ‘vibe coding’ app Cursor hits $9bn valuation (FT)

Billionaire duo Tull and Walter launch joint venture for AI-driven deals (FT)