Legendary investor Warren Buffett released his annual letter to shareholders Saturday in conjunction with the company’s annual financial results.
In the letter, Buffett began with a tribute to Forest River founder Pete Liegl, who passed away Nov. 19, 2024. Buffett’s Berkshire Hathaway company bought Forest River in 2005.
Buffett wrote that the first time he heard about Forest River was June 21, 2005, when he received a letter from an intermediary detailing Forest River data. The letter’s author told Buffett that Liegl specifically wanted to sell to Berkshire, and for a specific price.
“I liked this no-nonsense approach,” Buffett wrote. “I did some checking with RV dealers, liked what I learned, and arranged a June 28 meeting in Omaha.”
Liegl, his wife, Sharon, and his daughter, Lisa, trekked to Nebraska to meet with Buffett. Pete Liegl told Buffett he wanted to continue running the company but would feel more comfortable if he could assure his family’s financial security.
Forest River leased real estate that was not disclosed in the original letter to Buffett, so the two men discussed the land and arrived at a price within a few minutes. Buffett said he did not need an appraisal but would simply accept Liegl’s valuation. Then, Buffett asked what he should pay Liegl—adding that Buffett would accept whatever price Liegl said.
Buffett wrote, “This, I should add, is not an approach I recommend for general use.”
Buffett wrote that Liegl paused, then said he would not want to make more than his boss. Since Buffett was making $100,000 annually, that was the price Liegl said he would require.
“After I picked myself off the floor,” Buffett wrote, “Pete added: ‘But we will earn X (he named a number) this year, and I would like an annual bonus of 10% of any earnings above what the company is now delivering.’ I replied: ‘OK Pete, but if Forest River makes any significant acquisitions, we will make an appropriate adjustment for the additional capital thus employed.’ I didn’t define ‘appropriate’ or ‘significant,’ but those vague terms never caused a problem.”
The quartet went to dinner that night at Omaha’s Happy Hollow Club and, Buffett wrote, “lived happily ever after. During the next 19 years, Pete shot the lights out. No competitor came close to his performance.”
Buffett wrote that few business owners or managers are like Liegl.
“I avidly believe in lifelong learning,” Buffett wrote. “I’ve observed, however, that a very large portion of business talent is innate, with nature swamping nurture. Pete Liegl was a natural.”
Forest River’s 2024 revenues were disclosed in the company’s financial report. Berkshire Hathaway said the RV manufacturer’s revenue grew 6.4% from 2023 levels, after an 8% increase in 2022 from 2021 revenue.
Liegl founded Forest River in 1996, with the vision of bringing the power of nature to as many Americans as possible. Liegl’s goal was to create a company that could meet a wide range of consumer needs. Forest River grew rapidly under his leadership, expanding its product range to include RVs, buses, cargo trailers and marine products. His strategic acquisitions and commitment to innovation helped Forest River to become one of the largest RV manufacturers in North America.
