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Famed investor Warren Buffett named Darien resident Todd Combs to help manage the investments at Buffett's company, Berkshire Hathaway, Inc. The announcement set off speculation that Combs could eventually succeed his new boss as the firm's chief investment officer.
Buffett, 80, made it clear that he would have the final say on BHI's investments for as long as he's capable. However, he has been pressed by both his investors and his board to come up with a succession plan. In a 2007 letter to shareholders, he wrote that he was looking for a younger man or woman who could stay with the company for a long time.
Combs, 39, fills that bill. He founded the Greenwich hedge fund Castle Point Investment Management in 2005 with seed money from Stone Point Capital, a Greenwich private equity firm. Castle Point describes itself as a long/short equity fund, meaning that it not only buys stocks but also sells them short. Combs focuses on the financial industry. At the end of June, his holdings included U.S. Bancorp, MasterCard, State Street, Western Union, CME Group, Renaissance Re, Pennymac, Chubb, Starwood Property Trust and Annaly Capital.
Castle Point takes a value approach to investing, meaning that it looks for well-managed companies that have been beaten down by the market. That's much in line with Buffett's own philosophy. Buffett, however, emphasizes buy-and-hold. Combs is an active trader, according to a Fortune magazine study of his filings with the Securities and Exchange Commission.
Castle Point currently manages about $400 million -- a far cry from the $50 billion in BHI's equity portfolio. In interviews, Buffett said that Combs would ease into managing larger amounts, as he grew more comfortable with it.
Combs wasn't responding to questions. Reportedly, he will remain in Connecticut rather than move to BHI's headquarters in Omaha. Castle Point will wind down, returning the money to investors.
Buffett holds three titles at Berkshire Hathaway chair, chief executive officer and chief investment officer. His job will be split among at least three people if he retires or dies.
In announcing Combs' hiring, Buffet said that, for three years, he and his partner, Charlie Munger, have been looking for "someone of Todd's caliber to handle a significant portion of Berkshire's investment portfolio." It's not known if he will hire additional money managers. At present, however, Combs apparently has the inside track to the CIO job.
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