Munger and Buffett were unable to pull off one last deal together

Charlie Munger didn’t manage to help pull off one final deal with his lifelong partner Warren Buffett, but he remained hopeful that Berkshire Hathaway, with nearly $160 billion cash, will find its elephant one day.

“We have $160 billion in cash, plus a great credit rating we deserve. And who in the hell has that? Not very many,” Munger said in CNBC’s special “Charlie Munger: A Life of Wit and Wisdom,” which aired Thursday.

“It can’t be anything too small because it doesn’t matter how good it is, we’re of a size now where too small just doesn’t move the needle very much. So we need something big to come along and use up all our cash, and some borrowing,” he told CNBC’s Becky Quick in an interview conducted shortly before his death this week at age 99.

The Omaha-based conglomerate held a record level of cash — $157.2 billion — at the end of September. Buffett has been touting a possible “elephant-sized acquisition” for years, but his recent deals didn’t quite meet such lofty expectations.

Berkshire bought insurer Alleghany Corp. for $11.6 billion last year, while expanding its energy empire by purchasing Dominion Energy’s natural gas pipeline and storage assets for almost $10 billion. But Berkshire’s total market value now approaches $800 billion.

Squeeze new lemons

Munger, Berkshire’s late vice chairman, said such a mammoth deal may have to be done by the next generation of leaders at the conglomerate.

“I don’t think it’s hopeless. It may have to be done by some different people,” Munger said. “You know that next time, we may not be able just to squeeze a little more lemon juice out of the old lemons. They may have to squeeze some new lemons, meaning new people have to make the decisions.”

It could be Greg Abel, vice chairman of Berkshire’s non-insurance operations and Buffett’s designated successor, or Ajit Jain, Berkshire’s vice chairman of insurance operations, or Buffett’s two investing lieutenants, Ted Weschler and Todd Combs, Munger said, adding it could also be “somebody not yet identified.”

Berkshire’s huge war chest had been a cause for concern when interest rates were near zero, but with short-term rates topping 5% the cash pile is now earning a substantial return.

Over the years, Munger often defended Berkshire’s inaction, always seeing the virtue of sitting on the sidelines, biding its time, letting cash grow and patiently waiting for a good opportunity.

“There are worse situations than drowning in cash, and sitting, sitting, sitting. I remember when I wasn’t awash in cash — and I don’t want to go back,” Munger once said.