New Berkshire Manager Short on Experience: Fund Exec
Berkshire Hathaway would have been wiser to outsource investing advice to hedge funds rather than hire a manager whose experience is concentrated in one sector, another fund's manager told CNBC Tuesday.
“It sounds like this guy is really going to have a lot to learn,” said Mark Hake, president of Hake Investment Research, referring to Todd Combs, a hedge fund manager that Berkshire Hathaway tapped Monday to manage a large portion of its $100 billion portfolio.
“I’m not impressed with what Berkshire has done with this [hiring],” Hake added.
The legendary investor Warren Buffett is the chairman and CEO of Berkshire and its public face.
Combs is the manager of Castle Point Capital Management, a $400 million fund whose portfolio focuses on such financials as U.S. Bancorp , Mastercard , State Street and Western Union . Since the fund began in 2005, it has risen 28 percent through June 2010.
On the plus side, Hake said, Combs is a "value guy" who, like Buffett, is smart and whose fund has performed well.
Andrew Kirkpatrick, author of the biography "Of Permanent Value: The Story of Warren Buffett," said that Combs will be Buffett’s expert on banks and insurance companies.
“The main thing is what [Buffett and Combs] have not invested in,” said Kirkpatrick, “and those things are similar—like not AIG, not Lehman.”