Berkshire Vet Sokol Makes Buyout Play

In the wake of an SEC inquiry that concluded former Warren Buffett lieutenant David Sokol wasn’t guilty of insider trading, Sokol stated in an interview with Fox Business that he is launching a private equity firm, to be called Teton Capital, with “family money.”

It isn’t clear whether he’ll even need limited partners for his next venture, and that alone has the potential to make him a virtually unparalleled force in the buyout community, sister Web site peHUB reported. Having spent more than a decade as a leader of Berkshire Hathaway, Sokol certainly ought to have the resources to make waves in private equity.

The split between Sokol and Buffett was very public, and turned personal. Buffett said he turned information over to the SEC that was “very damning” regarding share purchases made in Lubrizol stock by Sokol prior to Berkshire Hathaway’s acquisition of the target. Berkshire’s board backed up Buffett, and Sokol left the company in 2011.

After being vindicated by the SEC’s inquiry, Sokol sounded off: “[T]he notion that I violated some company policy is absurd.” He later went on to say he tried to resign from Berkshire previously, and that Buffett talked him out of the decision.

Sokol said he will base his LBO shop in Wyoming, but it isn’t this one, Teton Capital Advisers, which—when contacted by peHUB—had a representative who said, perhaps with a twinge of annoyance, that this news outlet was not the first to call seeking an interview with the former Buffett lieutenant. In fact, Teton Capital Advisers, a hedge fund in Jackson, Wyo., has nothing to do with Sokol’s business.

Sokol’s LinkedIn profile contains no details beyond identifying him with the fund (peHUB received no reply to its request for comment).

It remains to be seen whether the very public split between the man who was, at one time, called a Buffett protégé, and one of the most highly regarded investors in the world, will put a damper on limited partners’ interest in the fund. So far, it does not appear that Sokol has registered any paperwork with the SEC for a private equity fund.

Corporate executives’ moves to private equity haven’t always gone as planned. One such example is that of G. Mike Mikan, the former United Healthcare executive who resigned—as the company said in an announcement of his departure—to run a buyout firm. Only, it never happened. Instead, Mikan spent time in a role leading beleaguered retailer Best Buy last year and ultimately wound up joining a hedge fund at the beginning of 2013.

Jonathan Marino is editor/columnist for peHUB.