Great expectations

Since Todd Combs, a little-known fund manager from Florida, emerged last week as the likely heir to take over legendary investor Warren Buffett’s US$100-billion portfolio, tales of his prodigious hard work have been trickling out. A spokeswoman for the State College of Florida said Combs was earning credits at the community college when he was only 16 and still in high school. “Definitely a good indication of his ability at an early age,” she told Florida’s Herald-Tribune.

Former colleagues said the 39-year-old is a meticulous researcher, who takes a very detailed and analytical approach to his work, spending hours a day studying newspapers and obscure financial documents. Like his new Berkshire Hathaway contemporaries, he’s low key; after the announcement that he had joined Berkshire, the media couldn’t find a photo of him anywhere on the Internet. His own firm, Castle Point Capital Management LLC, doesn’t have a website. Even in dress, he opts for khakis and button-down shirts over flashy suits.

Since 2007, the 80-year-old Buffett has been searching for a successor to manage “a significant portion” of Berkshire’s portfolio when he retires. Nobody suspected that Combs might fit the bill, although one of Buffet’s only hints about the race to replace him in recent years has been an admission that he was searching for a youthful heir—someone who could lead the company for years into the future.

Until recently, most of the speculation around Buffet’s replacement centered on Li Lu, a promising Chinese-American fund manager and former student organizer of the Tiananmen Square uprising in China. Li has since withdrawn as a contender for the Sage of Omaha’s throne.

There remains some doubt about whether Combs has what it takes to manage Buffet’s fortune, when his own fund is only worth $400 million. Investors didn’t react with enthusiasm to the news, sending Berkshire shares down nearly five per cent last week. But Combs passed Buffet’s “gut check,” and for now, that’s good enough.