Hedge fund manager Li Lu has become the first candidate named as a potential successor to famed investor Warren Buffett to oversees the $100 billion portfolio at Berkshire Hathaway. According to The Wall Street Journal, Charlie Munger, Berkshire’s vice-chairman and a close friend of Mr. Li, has identified him as a possible candidate to take over Berkshire’s top investment position in the future.
Li Lu singled out Chinese battery and car manufacturer BYD Co. as an investment opportunity for Mr. Munger soon after the company’s IPO on the Hong Kong stock exchange, and since 2008 Berkshire Hathaway’s $230 million stake in BYD has generated a $1.2 billion profit for the firm. Mr. Li mostly invests in Asian technology companies, and since 1998, his Himalaya Capital funds have earned a 26.4% annualized compound rate of return.
Mr. Buffett, who says he does not anticipate retirement any time soon, has nevertheless revealed that he is likely to separate his role at Berkshire into different investing and CEO capabilities after he steps down, spreading the executive and investment responsibilities among two or more managers. David Sokol, the chairman of Berkshire’s MidAmerican Energy Holdings, has been identified as a potential successor to Mr. Buffett as CEO. Mr. Li is the first contender for investment manager to be identified by name. Notably, Mr Munger is also Himlaya Capital’s largest investor.
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