Buffett Has $2.1 Million Lunch Date With Hedge-Fund Manager

Date: Monday, June 30, 2008
Author: Josh P. Hamilton and Dan Reichl, Bloomberg

A lunch date with billionaire investor Warren Buffett was sold to a Chinese hedge-fund manager yesterday for more than $2.1 million during an online auction, more than tripling last year's record of $650,100.

Zhao Danyang, who manages the Pureheart China Growth Investment Fund in Shenzhen, won the auction by bidding $2,110,100, said Denise Lamott, a spokeswoman for Glide Foundation. Glide, a San Francisco charity, will receive all proceeds from the auction.

It was Buffett's ninth annual auction to benefit Glide, and the fourth consecutive time the winning bid set a record. A total of nine bidders placed 78 offers over five days this week, according to the EBay Inc. auction site. Lamott said a crowd of Glide employees, board members, donors and others gathered to watch the results at a San Francisco hotel last night, and were jubilant.

``There were screams, shouts -- it was amazing in here,'' Lamott said in a phone interview.

Buffett, chairman of Berkshire Hathaway Inc., will entertain Zhao and seven companions at a New York steakhouse and answer virtually any question except what he is buying and selling. He praised Glide, which provides services including job training, medical care and 750,000 meals a year to the poor.

``It takes people who've hit bottom and brings them back,'' Buffett, 77, said in an interview before sitting down earlier this week with last year's winners. ``That's why we're here.''

No one answered the phone at the Pureheart offices in Shenzhen after the auction closed on Saturday morning local time.

World's Richest

Buffett built Berkshire Hathaway from a failing textile manufacturer into a $200 billion holding company. Berkshire has a $72 billion stock portfolio and owns businesses including Geico car insurance, Dairy Queen restaurants, Benjamin Moore paints and Fruit of the Loom underwear.

Buffett owns about 28 percent of Omaha, Nebraska-based Berkshire, making him the world's richest man, according to Forbes magazine. Two years ago, he pledged most of his stock to the Bill & Melinda Gates Foundation.

Susan Buffett, the billionaire's late first wife, volunteered at Glide, founded in the 1960's by the Rev. Cecil Williams in the blighted Tenderloin district of San Francisco.

``He went to a dying inner-city church,'' Buffett said in the June 25 interview. ``He was a young black minister at the time. He worked, starting with nothing, and he basically built one of the great organizations I've seen for helping people that are really down and out. I'm a huge admirer of Cecil Williams and Glide.''

`Thank God for Warren'

Williams is equally appreciative of Buffett. He said the foundation is about 15 percent behind last year's fundraising, even as costs soar and lines of people waiting for services get longer.

``Thank God for Warren Buffett,'' Williams said in an interview earlier this week. ``We're going through trying times, that's why it's so important for people like Warren Buffett and others to respond.''

Buffett exhorted government and individuals to do more to help.

``You have 20 percent of the households in the United States with almost 60 million people in them that have $21,000 a year or less of income,'' Buffett said. ``And I'd just invite anybody to try to live on $21,000 a year for their household.''

Past winners have discussed a wide range of topics with the legendary investor.

Lessons, Mistakes

``We talked about how to pick good people, how to educate the children, how to donate money,'' said former winner Yongping Duan, a California investor and founder of a consumer- electronics company in China. ``He talked about his opinion on some industries'' and shared lessons he learned from his mistakes, Duan said after his lunch meeting last year. Duan won in 2006 with a bid of $620,100.

David Einhorn, founder of hedge fund Greenlight Capital LLC, won with a bid of $250,100 in 2003, the first year the auction was conducted on San Jose-based EBay's online site.

Alan Stillman, founder of steakhouse Smith & Wollensky, pledged $10,000 and the meal for the right to host the event.

The following table lists the winners from previous years and the price paid, according to Glide.

Winner                                            Final Bid
2000 Anonymous                                     $25,000
2001 Anonymous                                     $18,000
2002 Edward Jones Co. and 2 Anonymous              $25,000
2003 David Einhorn, Greenlight Capital            $250,100
2004 Jason Choo, Singapore                        $202,100
2005 Anonymous                                    $351,100
2006 Yongping Duan, California                    $620,100
2007 Mohnish Pabrai, Guy Spier, Harina Kapoor     $650,100

To contact the reporters on this story: Josh P. Hamilton in New York at jphamilton@bloomberg.net; Dan Reichl in San Francisco at dreichl@bloomberg.net.