The global investment community took notice on Tuesday when billionaire hedge fund manager Seth Klarman issued a stern warning that increasing debt and global tensions could potentially bring on the next worldwide financial crisis.
As CNBC reported, the warning in Klarman's annual letter to investors (which CNBC "Squawk Box" co-anchor Andrew Ross Sorkin wrote about in The New York Times) caused a stir at the annual World Economic Forum in Davos, Switzerland.
Stephen Schwarzman, CEO of Blackstone, told CNBC that Klarman is correct that global tensions are creating increased market uncertainty, while Bridgewater Associates hedge fund manager Ray Dalio also agreed, telling CNBC that "the implications of the political conflict, for markets, are very profound."
So who exactly is Klarman, a relatively unknown figure to the general public but considered one of the world's smartest financiers? As The New York Times once put it: "He is the most successful and influential investor you have probably never heard of."
The 61-year-old Klarman, who co-founded Boston-based hedge fund the Baupost Group, where he manages roughly $32 billion in total assets, is known for his "sober and meticulous analysis," according to the Times. He has been dubbed "the next Warren Buffett" due to similarities in the two men's investing styles and strong track records. He is even sometimes called "the Oracle of Boston " in a nod to Buffett's famous nickname.
Much like Buffett, Klarman (who is worth of $1.5 billion according to Forbes) is a value investor, which means his investment philosophy revolves around putting money behind stocks that he believes to be undervalued by the rest of the market. In 2015, Klarman wrote a list of the top lessons he learned from following Warren Buffett's career, and he placed the advice to "buy bargains" at the top of that list.