Ajit Jain is giving up more than half of his Berkshire Hathaway stake

Ajit Jain, Warren Buffett’s insurance chief and chief executive, has sold more than half of his stake in the Berkshire Hathawayshowed a new regulatory file.

The 73-year-old vice president of insurance operations sold 200 shares of Berkshire Class A at an average price of $695,418 per share on Monday for about $139 million. This left him with just 61 shares, while family trusts set up by him and his husband for the benefit of his descendants hold 55 shares and his non-profit corporation Jain Foundation holds 50 shares. Monday’s sale represented 55% of his total holding in Berkshire.

The move marked the biggest decline in Jain’s holdings since he joined Berkshire in 1986. It’s unclear what motivated Jain’s selling, but he took advantage of Berkshire’s recent high price. The conglomerate traded up more than $700,000 to reach a market capitalization of $1 trillion at the end of August.

“This seems to be a signal that Ajit thinks Berkshire is fully valued,” said David Kass, professor of finance at the University of Maryland’s Robert H. Smith School of Business.

It’s also consistent with a significant slowdown in Berkshire’s share buyback activity of late. Omaha-based Berkshire bought back just $345 million worth of its own stock in the second quarter, significantly less than the $2 billion it bought back in each of the previous two quarters.

“I think at best it’s a sign that stocks aren’t cheap,” said Bill Stone, CIO at Glenview Trust Company and a Berkshire shareholder. “At over 1.6 times book value, it’s probably around Buffett’s conservative estimate of intrinsic value. I don’t expect many, if any, share buybacks from Berkshire around these levels.”

Indian-born Jain has played a crucial role in Berkshire’s unparalleled success. He facilitated a push in the reinsurance industry and more recently led a turnaround at Geico, Berkshire’s crown jewel auto insurance business. In 2018, Jain was named vice president of insurance operations and named to Berkshire’s board of directors.

“Ajit has created tens of billions of value for Berkshire shareholders,” Buffett wrote in his 2017 annual letter. “If there’s ever another Ajit and you could trade me for him, don’t hesitate. Make the transaction!”

Before it was officially announced that Greg Abel, Berkshire’s vice president of non-insurance operations, would eventually succeed the 94-year-old Buffett, there were rumors of Jain one day leading the conglomerate. Buffett recently clarified that Jain “never wanted to run Berkshire” and there was no competition between the two.