Todd Combs to Manage Just $2-3 Billion of Berkshire Hathaway's $113B Portfolio
Newly hired investment manager Todd Combs will be initially handling $2 billion to $3 billion of Berkshire Hathaway's $113 billion portfolio in what amounts to an "extended trial." That's according to longtime Warren Buffett friend Carol Loomis, writing today for Fortune Magazine under the headline "Welcome to Omaha, Todd Combs."
Loomis notes that Berkshire's October news releaseannouncing the hiring of Combs had said he would be running a "significant portion" of Berkshire's money, leading some to believe Combs "was going to be handling megabillions of Berkshire's huge portfolio."
That $2-3 billion is still much more than the $400 million under management at Combs' Castle Point hedge fund, but "roughly comparable" to Lou Simpson's investment portfolio at GEICO. Simpson will be retiring at the end of the year.
Loomis reports that Combs' pay structure will be similar to Simpson's: "by salary and an incentive compensation plan that gives him a proportion of the amount by which his performance beats the S&P 500 over a three-year period."
That's because, says Buffett, "You want to get away from the short-term ups and downs of the market when you're paying someone for running money, and a plan like this does the job."
Buffett also tells Loomis that Combs "can range wherever he wants to" and won't be restricted to any specific area for his investment choices.
Loomis reports today that Combs attended a four-day Berkshire board meeting earlier this month that included a train trip (via Burlington Northern Santa Fe, of course) to the nation's biggest coal mine in Wyoming.
Combs officially starts his Berkshire job in January.
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