Louis Simpson, who helped pick stocks for famed investor Warren Buffett as part of a financial career that spanned more than 50 years, has died. He was 85.
He died in Chicago on Jan. 8 following a prolonged illness, according to Northwestern University in Illinois, where he had served as a trustee. He and his wife, Kimberly, were residents of Naples, Florida.
Simpson spent more than three decades selecting equities for Geico, the auto insurer owned by Omaha, Nebraska-based Berkshire Hathaway Inc. Buffett, Berkshire’s billionaire chief executive officer whose stock-picking prowess earned him a worldwide following, was a longtime stakeholder in Geico and helped choose Simpson to be its chief investment officer in 1979. When Berkshire acquired full ownership of Geico in 1996, Buffett asked Simpson to continue managing its stock portfolio.
Simpson was a “Hall of Famer” as an investor and “the best investment manager in the property-casualty business,” Buffett wrote in annual letters to Berkshire shareholders. In his 2004 letter, Buffett included a section called “Portrait of a Disciplined Investor,” saying Simpson’s picks had produced an annual average return of 20 percent since 1980, compared with 14 percent for the S&P 500 Index.
Simpson rose to president and CEO of Geico’s capital operations from 1993 through 2010 and was once identified by Buffett as a candidate to succeed him in an emergency to oversee all of Berkshire’s investments.
Good Moves
One of Simpson’s successes came with the breakup of American Telephone & Telegraph Co. in the 1980s. He invested about 40 percent of Geico’s capital in three of the regional “Baby Bell” operating companies formed by the dismantling. The stake doubled over two years and added $400 million to the insurer’s $1 billion net worth, according to Jack Byrne, the former chairman of Geico. His other notable investments included Nike Inc., an athletic apparel maker, and CarMax Inc., which sells used autos.
“He just knocked the cover off the ball year after year after year,” Byrne said in a 2011 interview. “I have been asking Lou for 20 years whether he would take a separate account with me.”
Simpson retired from Berkshire in 2010 and founded SQ Advisors with his wife, Kimberly Querrey, the following year. The firm, based in Naples, Florida, planned to manage money for Simpson’s family and friends, as well as outside charities, Simpson said in an interview with Bloomberg News at the time.
Short Retirement
“I did retire for a day,” Simpson said in the interview. He then realized, “I would probably drive myself crazy and my wife crazy if I really retired and didn’t do anything.”
SQ Advisors held a stock portfolio valued at about $2.67 billion as of March 31, 2016, according to a filing. That included a Berkshire stake of more than $380 million.