Warren Buffett picks another little-known successor

Reuters

By Ben Berkowitz and Svea Herbst-Bayliss

NEW YORK/BOSTON (Reuters) - Berkshire Hathaway Inc expanded its succession plan for Warren Buffett on Monday, saying Virginia fund manager Ted Weschler will join the company early next year to help oversee its investments.

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Berkshire said Weschler and Todd Combs, who joined the company last year, would manage its entire equity and debt portfolio after Buffett retires, possibly aided by a third manager. The third manager has not yet been named. For a time Combs and Weschler will run smaller portions of Berkshire's stock holdings.

Berkshire's equity portfolio totaled $52.36 billion as of June 30, according to an SEC filing.

Weschler, like Combs before him, has built up an eye-popping investment record, while keeping a low profile far from the canyons of Wall Street. The Virginia-based money manager delivered total gains of 1,236 percent over the last 11 years, according to investors.

A number of Buffett's best-known biographers, as well as prominent fund managers including Mario Gabelli, all told Reuters Insider they were not familiar with Weschler or his work. The same was true when Combs was appointed last year.

Moments after one of the biggest personnel mysteries in finance was lifted and Weschler was appointed as one of a likely trio of heirs to Buffett's stock-picking empire, Weschler kept to his usual routine. He was at his desk at Peninsula Capital Advisors -- the hedge fund he founded in Charlottesville, Virginia in 1999 -- dialing investors, his receptionist said.

On his voicemail, Weschler said he would call back soon.

Weschler's interest in Warren Buffett, who is both chief executive officer of the ice-cream-to-insurance conglomerate and its money manager, has been growing for some time.

SECRET LUNCHES

According to journalist Carol Loomis, a long-time friend of and ghost-writer for Buffett, Weschler paid millions of dollars to dine with the "Oracle of Omaha" twice in the last two years.

Over the last years, pressure has mounted on Buffett to put a succession plan into place for the day the 81-year-old will no longer run the company. Buffett's roles of investment manager will be split after he retires; the names on the CEO succession list are secret, however.

As Buffett has cast his eyes around the world for skillful money managers, Weschler has overseen a very concentrated portfolio with Direct TV, DaVita, which runs kidney dialysis centers, and Liberty Media, ranking among his biggest and most recent holdings.

In total, he held fewer than a dozen publicly traded U.S. stocks at the end of the second quarter, according to his most recent regulatory filing. He is not required to list stocks he may be shorting or betting against.

Weschler, 50, earned an undergraduate degree in economics from the Wharton School at the University of Pennsylvania, where Buffett began his own undergraduate career decades ago.

Before starting his stock-picking career in Virginia, Weschler worked at specialty chemicals and materials company W.R. Grace, where he at one time was assistant to the vice chairman.

The path for Weschler to join Berkshire was laid at this year's lunch when Buffett pitched the idea of a move to Omaha, Buffett told Loomis. "I very much wanted him to do it, but I didn't expect to get very far with the idea," Buffett said.

"Ted will no doubt make a lot of money at Berkshire. But he was already making a lot of money with his fund -- you can get an idea of that from the size of his (charity) bids -- so money wasn't a reason for him to come."

In Charlottesville, a city one-quarter the size of Omaha, Weschler and his wife have supported a number of charities from helping sponsor a youth film festival to donating to one that builds structures for communities in need.

(Reporting by Ben Berkowitz and Svea Herbst-Bayliss, editing by Lisa Von Ahn and Maureen Bavdek)