Kinder Morgan Inc. (NYSE: KMI) has seen its shares rise handily since it was disclosed that Warren Buffett’s Berkshire Hathaway Inc. (NYSE: BRK-A) bought a decent-sized stake. After all, having Warren Buffett as a new shareholder goes a long way for advertising value. So what happens when investors find out that it wasn’t really Buffett who bought the shares?
In a CNBC interview with Becky Quick, Buffett confessed that he was also surprised about the Kinder Morgan stake. It turns out that this stake was purchased by either Ted Weschler or Todd Combs, his two new portfolio managers.
It may seem odd that Buffett would say “I was also surprised” about anything that Berkshire Hathaway owned. The issue now is that the portfolio managers can commit somewhere in the range of $200 million to $400 million (or thereabouts) without having to have discussions with Buffett. The value of this 26.533 million shares was $392.4 million as of December 31, 2015.
Quick asked whether it was Weschler or Combs who made the share purchase in Kinder Morgan. Buffett would not say which one of them did what in their trading accounts. They run two portfolios and get paid based on how those do. Buffett then said he’s never told them to buy or sell anything. Buffett said:
I think when you see a position of that size, it is probably theirs. I am not going to get involved in something that doesn’t involve at least a few billion.
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