October 26, 2010

Warren Buffet Taps Successor From Castle Point Hedge Fund

Todd Combs to take over 'significant portion' of Berkshire portfolio

Todd Combs is in line to become the new Warren Buffett, now that the 39-year-old hedge fund manager was selected by Buffett to succeed him, according to an announcement Monday.

Combs will oversee a “significant portion” of the Berkshire Hathaway portfolio after having spent the past five years running Castle Point Capital Management in Greenwich, Conn.

“He’s always been enamored with Berkshire,” Buffett (left) was quoted as saying in a New York Times report. “I know he’ll be good, but he’s the right type of guy. We don’t want someone who’s trying to figure out if they can make $100 million with us, or $200 million with the next guy.”

Castle Point has “only about $400 million in assets . . . primarily invested in the shares of financial-services companies,” according to The Wall Street Journal, which reported that Berkshire has not disclosed which portion of its $100-billion-plus portfolio Combs will manage.

Buffett also made it clear that Combs’ position as successor to Buffett’s chief investor role was not cast in stone: “He’s got the best chance of being the successor, but if we find the right guy or gal, we’d take that person, too.” Buffett currently serves as chairman, chief executive, and chief investment officer, but his role will be split among several people when he steps down.

That day is not in the immediate future, however. Buffett also said that he has no current plans to leave his dual post as CEO and CIO, and that Combs is "not going to take over the whole investment function as long as I'm around . . . I will remain in that [position]." He also indicated that the chief executive position trumps that of CIO. Currently he is considering three people for that position, although he has not given details.

One potential CIO successor, Li Lu, a Chinese hedge fund manager whose potential had been the subject of a previous Wall Street Journal story, took himself out of the running for the job, possibly over pay.

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