The billionaire investor Warren Buffett said on Wednesday that he is resigning as a trustee of the Bill and Melinda Gates Foundation and that he has donated half his wealth to philanthropy since pledging 15 years ago to give away his fortune gained from running Berkshire Hathaway.
Mr Buffett, 90, said he has been an "inactive trustee" for years at the foundation, but fully supported its chief executive, Mark Suzman, and that their goals were "100 per cent in sync".
He also announced a new $4.1 billion donation of Berkshire shares to the Gates Foundation and four family charities, part of his 2006 pledge to give away about 99 per cent of his net worth.
The future of the Gates Foundation has been uncertain following last month's announcement that co-founders Bill Gates and Melinda French Gates were divorcing after 27 years of marriage.
Founded in 2000, the non-profit focuses on combating poverty, disease and inequity, spending $54.8bn on such projects in its first two decades. It receives roughly four fifths of Mr Buffett's annual charitable donations.
The foundation did not immediately respond to a request for comment.
Mr Buffett did not mention the Gates's divorce as a reason for his resignation, noting he has also given up all directorships outside Berkshire, reducing his workload.
Arguably the world's most famous investor, Mr Buffett has since 1965 built Berkshire into a more than $600bn conglomerate, taking on businesses such as the BNSF railroad and Geico auto insurance, and stocks such as Apple.
"Over many decades, I have accumulated an almost incomprehensible sum simply by doing what I love to do," Mr Buffett said. "Society has a use for my money; I don't."
Wednesday's donations also go to the Susan Thompson Buffett Foundation, named after Mr Buffett's late first wife, and charities run by his children Howard, Susan and Peter: the Howard G Buffett Foundation, the Sherwood Foundation and the Novo Foundation.
Mr Buffett has assured his children they would still be taken care of.
"A very rich person should leave his kids enough to do anything, but not enough to do nothing," he told Fortune magazine in 2006.
Had Mr Buffett not made his donations, his fortune would roughly equal that of Amazon founder Jeff Bezos, the world's richest person, according to Forbes magazine.
Mr Gates and Mr Buffett also pioneered "The Giving Pledge", through which more than 200 people, including Michael Bloomberg, Larry Ellison, Carl Icahn, Elon Musk and Mark Zuckerberg, committed at least half their fortunes to philanthropy.
Mr Buffett's statement also addressed recent criticism after a ProPublica investigation found that he and other wealthy people paid low taxes relative to their fortunes.
He said his donations have resulted in only about 40 cents of tax savings per $1,000 given.
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Portugal v Chile, 7pm, today
Germany v Mexico, 7pm, tomorrow
KILLING OF QASSEM SULEIMANI
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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10pm – Fatboy Slim
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