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Billionaire Chamath Palihapitiya models firm on Buffett, Berkshire

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Billionaire Chamath Palihapitiya models firm on Buffett, Berkshire 1

  • Billionaire venture capitalist Chamath Palihapitiya is modeling his Social Capital firm on Warren Buffett’s company.
  • “My ambition is to be our generation’s Berkshire Hathaway,” the Virgin Galactic chairman said in a recent Fortune interview.
  • Palihapitiya expects to take Social Capital public and build a tech conglomerate.
  • “It’ll be a Berkshire, a holding company that, instead of holding Gillette and Coca-Cola and McDonald’s, will hold technology businesses,” he said.
  • Visit Business Insider’s homepage for more stories.

Billionaire investor Chamath Palihapitiya wants to build his Social Capital firm into a tech-focused successor to Warren Buffett’s $400 billion conglomerate.

“My ambition is to be our generation’s Berkshire Hathaway,” the Virgin Galactic chairman said in a recent Fortune interview.

Palihapitiya ultimately expects to take Social Capital public, he said, and doesn’t envision it as a venture-capital firm.

“It’ll be a Berkshire, a holding company that, instead of holding Gillette and Coca-Cola and McDonald’s, will hold technology businesses,” he told Fortune.

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Buffett’s Berkshire owns dozens of businesses including Geico, Duracell, and See’s Candies, and holds billion-dollar stakes in public companies such as Apple, Bank of America, and Coca-Cola. It sold its stake in Gillette to Procter and Gamble in 2005, and cashed out its McDonald’s shares in 1998.

Palihapitiya’s investments to date include Slack, Box, and SurveyMonkey. He also partnered with billionaire Richard Branson to take Virgin Galactic public using a “blank-check” company last year, and has raised almost $1.1 billion for two further blank-check companies.

The investor revealed in the interview that he’s been making “highly structured, high-volume bets” on credit markets in recent weeks.

“There’s been a lot of asymmetry building because of what the Fed has been doing,” he said, referring to the central bank’s unprecedented interventions during the coronavirus pandemic, which include spending hundreds of billions of dollars on bonds, and buying corporate debt for the first time.

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Palihapitiya isn’t the first tech executive to try to emulate what Buffett has done with Berkshire:

  • Google bosses Larry Page, Sergey Brin, and Eric Schmidt had the idea for Alphabet — the holding company that sits above Google, YouTube, Waymo and other businesses — when they visited Buffett more than a decade ago.
  • SoftBank CEO Masayoshi Son — whose Vision Fund has invested in the likes of Uber, WeWork, and TikTok-owned ByteDance — said in 2017: “Warren Buffett in the technology industry, that is what I would like to become.”

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