Buffett's New Hire to Manage 'Significant' Chunk of Berkshire's Portfolio

Warren BuffettWarren Buffett is betting on youth to help lead his revered conglomerate Berkshire Hathaway (BRK.A) after he leaves the scene. The Oracle of Omaha has tapped 39-year-old Todd Anthony Combs to manage a major part of Berkshire's investment portfolio.

Combs, who is CEO and portfolio manager at Greenwich, Conn.-based Castle Point Capital Management, will "handle a significant portion of Berkshire's investment portfolio," Buffett, 80, said Monday, in announcing Combs's hiring.

The three-year search for a successor to Buffett, arguably America's most famous investor, has captivated the financial world. Thanks to a unique combination of homespun wisdom, integrity and consistently outsized investment returns, Buffett has built a fiercely devoted following of fans, thousands of whom gather each year in Omaha, Neb., for Berkshire's annual meeting, also known as the Woodstock of Capitalism.

Combs is an "all-American type" who is "not the least bit interested in publicity, an attitude unlikely to shield him from it," reported Fortune's Carol Loomis, a longtime Buffett confidant. "Now a resident of Darien, Conn., Combs is by birth a Floridian who graduated in 1993 from Florida State University with majors in finance and multinational business operations," Loomis reported.

A Long-Term View

In this year's installment of his widely read annual letter, Buffett reiterated the core investment philosophy that has made him an investing legend along with longtime partner Charlie Munger: Invest in easy-to-understand companies run by honest and talented managers at a good price. Then, nurture those companies and investments over the long term.

"For three years Charlie Munger and I have been looking for someone of Todd's caliber to handle a significant portion of Berkshire's investment portfolio," Buffett said in a press release. "We are delighted that Todd will be joining us."

In 2009, Berkshire notched its best performance since 2003. Shareholder book value increased 19.8% after falling 9.8% in 2008. Berkshire's 2009 performance slightly trailed the S&P 500, however, but over the entire financial crisis the company outperformed that index, thanks to a comparatively small 2008 loss.

The Oracle's Intuition

The appointment of Combs is classic Buffett: Confound the conventional wisdom, and ignore the so-called experts.

Ajit Jain, the Berkshire superstar who runs the National Indemnity business, had long been seen as the front-runner. David Sokol, the hard-driving chief of huge Berkshire subsidiary MidAmerican Energy and recently installed CEO of NetJets, had also been viewed as a top contender.

Sokol remains the leading candidate for the Berkshire CEO job, the second third of the managing triumvirate that will ultimately take over Buffett's duties. Buffett's son Howard is in line to complete the trio as chaiman of Berkshire, the Oracle has said.

Berkshire has nearly $100 billion in assets, including over $50 billion in equity positions and about $40 billion in corporate and government debt holdings.

Combs managed $395 million on July 1, according to Reuters. "Through June this year, his fund has risen 28% from its November 2005 inception, against a 49% drop in his benchmark, the SPDR Financial Services sector fund," according to the wire service.

"Owners of Businesses"

Combs is a respected money manager and obvious disciple of Buffett's value-driven, company-focused approach. "At Castle Point we like to think of ourselves as owners of businesses," Combs said in a July shareholder letter cited by Reuters.

Combs's top 10 long holdings in June included CIT Group senior secured credit, CME Group, MasterCard, US Bancorp, Western Union, State Street Corp, Amadeus IT and RenaissanceRe, according to the wire service.

Combs shouldn't expect to take the job while Buffett still has his wits about him.

Combs is "not going to take over the whole thing as long as I'm around," the Oracle told The Wall Street Journal. "I have this dual position as CEO and CIO, and I will remain in that."


Increase your money and finance knowledge from home

Investing in Real Estate

Learn the basics of investing in real estate.

View Course »

Investing Like Warren Buffett

Learn from one of the world's best investors.

View Course »

Add a Comment

*0 / 3000 Character Maximum

53 Comments

Filter by:
strictpos

I Think this is not News Anyone Can Make Money With Other Peoples Money and Invest it! It's the Rich in This Country That Have Exploited The Poor and the Middle Class and Legally Steal....Plenty of People are Starving in this country right now, To Put Benny Hill here....

October 29 2010 at 9:37 PM Report abuse rate up rate down Reply
Mr Gamans

I believe Mr Buffet should give all his cash away and let a newbie start from scratch as he did. Whose going to care about some new guy augmenting the Buffet bling?

October 29 2010 at 8:51 PM Report abuse rate up rate down Reply
Karlson Strouse

We live in a time where not all is as it appears. I suggest that rather than believing simply in his well crafted persona that Warrent Buffett is "a harmless, wealthy, benevolent grandfather-type dispenser of wisdomly advice" and understand two things. One, he has an agenda. Two, figure out that agenda by whom he associates". "Trust but verify". Ronald R. Reagan

October 29 2010 at 5:50 PM Report abuse +1 rate up rate down Reply
gymbo bogymm

WEB is an elitist socialist. He wants to RAISE taxes, raise estate taxes, and steal the American tax payers money through government confiscation. He is a hypocrite. He is only taxed through capital gains...he uses trust to dodge income and estate taxes. He's a darn leftist democrat who is openly supporting Obama and his cohorts. He is a fraud. He invested in Petro-China,,,,with no regrets...his words.....................................He and Gates are the same. Don't fall for the grandpa image. Munger said he found folks who hoarded gold to be selfisf.WHAT??? Munger and WEB hoarded 50 plus BILLION and they talk about someone else being selfish?? Only a fool would falll for such nonsense. He is a great investor and WAS a great American...Now he's a leftist socialist...He has NO business telling the American taxpayer what TAXES they should pay...when he avoid them. Conservatives must defeat these creatures..Obama,Gates,WEB,Soros, Koons,Reid,Pelosi.....do you know that WEB supports those people?? He does....Nuff said!

October 29 2010 at 1:43 PM Report abuse rate up rate down Reply
1 reply to gymbo bogymm's comment
JDavis109

Dude, what kind of Tea Party ganga have you been smoking? If Buffett is leftist socialist, then Ronald Reagan was the second coming of Vladimir Illich Lenin!

October 30 2010 at 12:24 AM Report abuse rate up rate down Reply
Dave

Like 90% of the country even knows who Warren Buffett is. Try Jimmy Buffet. You'd get a bigger response.

October 29 2010 at 12:12 PM Report abuse +1 rate up rate down Reply
1 reply to Dave's comment
HI CMA MAN

Dav, you are a MORON. 90% of the country KNOWS who Warren buffett is.

October 29 2010 at 2:34 PM Report abuse rate up rate down Reply
fh1939

Arae you going to votae for (Moonbeam) the hippi Destroyocrat from the land of fruits and nuts, so you can smoke your dope and get taken over by the smart Chinese !

October 29 2010 at 10:50 AM Report abuse rate up rate down Reply
kharismas

I LOVE Warren BUFFETT...TOO BAD HE IS AT THE AGE HE IS, HE IS PROBABLY THE ONLY PERSON WHO COULD HELP US GET OUT OF ALL OF THESE MONEY PROBLEMS WE HAVE TODAY. HE IS A DOER...NEVER A COMPLAINER...like: we the people ... re: ( somebodys elses fault we're in this mess ) He would be a really GREAT person to get it DONE I'll bet we would be working too...at least the people who are HONESTLY trying to get a job, that is ...not the ones who want what we have for doing nothing, the poor oppressed ones....get off your back-side...get out and do it!

October 27 2010 at 10:30 AM Report abuse -3 rate up rate down Reply
timbroderick1951

We should adopt Warren Buffett's investment philosophy for our political choices. We should eleect people who like to simplify things but are not simple themselves. Most importantly, we need to elect people who care about other people and aren't just looking out for themselves and the almighty dollar. We need to put good managers into elected positions, not back slapping good old boys who spenmd all their time trying to raise money get relected.

October 27 2010 at 1:10 AM Report abuse +2 rate up rate down Reply
kastmaster2105

ooops!! Thats Fort Knox!!

October 26 2010 at 5:41 PM Report abuse rate up rate down Reply
kastmaster2105

So, who in the hell is managing Fort Know??

October 26 2010 at 5:40 PM Report abuse +1 rate up rate down Reply