26 February 2012 Last updated at 06:10 ET

Buffett says a successor is lined up to replace him

Profits at Warren Buffett's investment group were lower in 2011

Warren Buffett has announced that he has a successor in mind to replace him as chief executive of his investment group Berkshire Hathaway, but he stopped short of revealing a name.

Mr Buffett, 81, said that while he had no plans to step down, the eventual transfer of power would be "seamless".

In his annual letter to Berkshire shareholders, he added that the company also had two back-up candidates.

Berkshire made a net profit of $10.3bn (£6.5bn) in 2011.

Also releasing its annual results on Saturday, the profit in 2011 was down from $13bn in 2010, as Berkshire was affected by the weakness in the US economy.

The company was also knocked by the earthquake and tsunami in Japan, which contributed to annual losses of $1.7bn at its insurance businesses.

There has long been speculation over who will ultimately replace Mr Buffett.

Some commentators have suggested that Ajit Jain, who currently runs Berkshire's reinsurance division, is the leading candidate.

In his letter to shareholders, Mr Buffett also said that he had been "dead wrong" to predict that the US housing market would have started to recover by now, but added that he said he was sure it would eventually do so.