2004: Why doesn't Berkshire own a mutual fund management company?
AUDIENCE MEMBER: Hi, my name is Nate Anthony (PH), from Hinsdale, Illinois.
First, I would like to venture a response to an earlier question about the future of Berkshire.
I believe it is our responsibility as shareholders to think for ourselves and ensure that Berkshire is run as respectably in the future it has been until now.
You both have had a lot to say, both today and in the past, about how mutual funds should be run. But to my knowledge, we do not directly have a fund management business.
What do you think about putting your words in action, and offering to have a Berkshire company manage the assets of funds where the directors are dissatisfied with present management?
WARREN BUFFETT: Yeah, the problem would be, there would be too many conflicts.
You know, we’re managing so much of our own money at Berkshire that to take on the responsibility for managing another group of people to whom we would owe our best efforts, and handling that situation of wearing two hats ethically, I wouldn’t know how to do it.
I certainly wouldn’t want to start a fund management company and be prorating all purchases between Berkshire and that fund management company, or the funds that it managed.
I — we’ve thought about it plenty. I mean, we’ve had all kinds of propositions put to us.
And obviously, we could sell it big time. But when we got through selling it, then we’d have the problem of administering it fairly. And I don’t know how we would do it. Charlie, do you?
CHARLIE MUNGER: No, that’s why we don’t do it. But — (laughter) — I must say it’s an attitude that doesn’t seem to bother many other people. (Laughter)