Charlie Munger, who recently passed away at age 99, expressed hope that Berkshire Hathaway, with its nearly $160 billion in cash, would eventually find a significant acquisition. Speaking in an interview conducted shortly before his death, Munger highlighted Berkshire’s substantial cash reserves and strong credit rating. He emphasized the need for a sizable deal, mentioning that smaller deals wouldn’t have a significant impact given Berkshire’s size.

The conglomerate ended September with a record cash level of $157.2 billion. Warren Buffett has been discussing the possibility of an “elephant-sized acquisition” for years, but recent deals, such as the acquisition of insurer Alleghany Corp. for $11.6 billion and Dominion Energy’s natural gas assets for almost $10 billion, fell short of meeting that expectation.

Munger suggested that the next generation of leaders at Berkshire might need to execute such a substantial deal, indicating potential successors like Greg Abel, Ajit Jain, Ted Weschler, and Todd Combs. While Buffett’s current team might need to find new opportunities, Munger noted that Berkshire’s significant cash pile had become less of a concern with short-term interest rates exceeding 5%, allowing the cash to earn a substantial return.

Munger, over the years, defended Berkshire’s strategy of holding onto cash, waiting for the right opportunity, and letting it grow. Despite concerns about inaction, Munger saw the virtue of sitting on the sidelines and patiently waiting for favorable circumstances. The search for a major acquisition continues to be a key focus for Berkshire Hathaway’s leadership.