Warren Buffett's likely successor: Chinese Tiananmen protestor, hedge fund manager
Who will succeed billionaire super-investor Warren Buffett when the 79-year-old Oracle of Omaha finally retires as chairman of his Berkshire Hathaway holding company?
Perhaps no question in global finance has preoccupied investors like this one in recent years.
The answer, at least according to Friday's Wall Street Journal, appears to be a 44-year-old Chinese hedge fund manager who participated in the deadly Tiananmen Square protests 20 years ago named Li Lu.
Li was taken from his parents in China when they were sent through Mao's brutal Cultural Revolution re-education process, which set China back decades and was responsible for more than 1 million deaths.
He became a student activist and took part in the Tianamen Square resistance, in which as many as 7,000 Chinese were killed by their own government, according to NATO intelligence.
Afterward, Li left for France and later came to the United States, where he was hailed as a human rights hero. He gained admission toColumbia University, despite speaking little English, and earned degrees in economics, law and business.
He saw Buffett speak at Columbia in 1993 and became inspired to start trading stocks, which led to a Wall Street job. By 1997, he had set up his first hedge fund.
Li got to know Buffett via one of his human-rights contacts -- Jane Olsen, wife of a Berkshire director. In 2003, Li met Charlie Munger, Buffett's right hand man and, according to the Journal, "made an immediate impression." Li began investing for Munger and, in 2002, discovered BYD, a Chinese maker of lithium batteries, which power everything from iPhones to the new Volt electric car.
Li, Buffett and Berkshire bought into BYD, and Berkshire's $230 million investment is now worth $1.5 billion.
That said, the Journal points out, BYD is Li's one big home run, which sort of makes him the Alan Dershowitz/Bucky Dent of investing. The rest of Li's ideas have been singles and doubles.
But Li thinks like Buffett: Buy stocks in companies you believe in and understand, and hold onto them. Berkshire Hathaway/Buffett own or own stakes in Geico, Coca-Cola, Burlington Northern Santa Ferailroad, Dairy Queen, Mars candy, and others.
Picking a Chinese investor makes perfect sense for Buffett, who knows where the future is and who is, for all his pro-America proselytizing, intensely pragmatic. Even though Li does not have unlimited travel in communist China, he knows China; Buffett knows China is key to the world's economic future; and the Chinese government may change.
Disclosure: Buffett is a director of The Washington Post Co.
By Frank Ahrens | July 30, 2010; 6:41 PM ET
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