NEW YORK (
) -- Warren Buffett's newest protégé sold a big slug of
stock, while adding shares of
, in the second quarter, according to
Securities and Exchange Commission
The 80-year-old investing legend, who is Chairman, CEO and CIO of
has selected Todd Combs, manager of a roughly $400 million financial services-focused hedge fund called
, to manage part of Berkshire's $100 billion portfolio, according to
The Wall Street Journal
. A relative unknown, Combs is also "the leading candidate" to succeed Buffett in the CIO role, according to the newspaper.
"It struck me as a little surprising, but doing this instead of having an abrupt change in management is smart," Meyer Shields an analyst at Stifel Nicolaus said. "It is interesting that they are looking for someone who can be tutored," he said, noting there had been speculation Buffett might pick a better-known name such as Chinese American fund manager Li Lu. Indeed, Berkshire vice chairman Charlie Munger told The Wall Street Journal
it was a "foregone conclusion" Li would become a "top investment official" at Berkshire, though there may be a role for both men.
"It is my expectation that there will be more people managing the portfolio along with Combs," Shields said.
Shields believes that Combs will be working closely with Buffett to learn his investment strategy. Shields says there is a similarity in their investing strategies, but says "there is more turnover in Castle Point's than in Berkshire's." Among investments Buffett and Combs have in common are
Another name they have in common is U.S. Bancorp, which has been a loser for Buffett. But Buffett is holding onto the stake despite the fact that it would allow him to take a big write-down, because he
within the next year or two to help Berkshire recover its costs.
U.S. Bancorp is the only stock that has been a top five holding for Greenwich, Conn.-based Castle Point in each of the last four quarters for which data is available.
State Street Corp.
has been a top six holding in each quarter. Combs added 211,000 shares of State Street in the second quarter to bring his fund's ownership to 561,000 shares, or nearly $19 million.
Combs also upped his stake substantially in Western Union and Mastercard, as well as
, among other names.
One of the most attention-getting trades in the latest quarter, however, was the JPMorgan stake sale. Combs and Castle Point owned 500,000 shares of JPMorgan worth $22.4 million at the end of the first quarter, but had reduced that stake to $11.2 million, or 306,000 shares, by the end of June.
Written by Dan Freed and Maria Woehr in New York
Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.