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New Berkshire Manager Short on Experience: Fund Exec

Tuesday, 26 Oct 2010 | 6:03 PM ET

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.

The New Warren Buffett
Todd Combs, a relatively unknown manager of a Connecticut hedge fund was hired to manage a good chunk of Berkshire Hathaway's legendary investment portfolio. Andrew Kilpatrick, a Warren Buffett biographer, and Mark Hake, of Hake Investment Research, take a closer look at the new Buffett.

“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.”

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