Todd Combs
Investment Manager & CEO of GEICO, Berkshire Hathaway
Investment manager hired in 2010 to help manage Berkshire's equity portfolio; later took over as CEO of GEICO.
Biography
Todd Combs joined Berkshire Hathaway as an investment manager in 2010, becoming the first of the two investment managers Buffett added to help run the equity portfolio and eventually succeed him in the investment role.
Before Berkshire, Combs ran Castle Point Capital, a hedge fund he founded in 2005, building a strong track record in financial-sector analysis. Buffett was impressed by Combs's investment acumen, his deep knowledge of financial businesses (banks, insurers, specialty finance), and his work ethic.
In addition to managing investments, Combs has taken on substantial operational responsibilities within Berkshire. In 2020 he became CEO of GEICO — Berkshire's largest insurance company — where he has undertaken a significant transformation of the business to restore its cost advantage and profitability after a difficult period. Buffett and Munger have repeatedly praised Combs as one of the most capable people at Berkshire.
Key Stories
Building Castle Point — Before Berkshire, Combs built Castle Point from scratch, demonstrating the kind of independent, concentrated, conviction-based investing that Buffett values. His analytical strength in financial companies — notoriously difficult to understand and value — caught Buffett's attention.
JPMorgan Board — In addition to his investment and operational roles, Combs served on the JPMorgan Chase board of directors, giving Berkshire insight into one of the world's most important financial institutions while expanding Combs's own experience.
GEICO's Turnaround — Taking the CEO chair at GEICO in 2020 required Combs to shift from investor to operator — and to tackle a seriously underperforming business. GEICO had fallen behind its competitors on telematics (usage-based insurance) and allowed its cost advantage to erode. Combs launched a major restructuring, cutting costs and investing in the technology needed to restore GEICO's competitive moat. The turnaround under his leadership has shown results in improved profitability.
Impact on Berkshire
Combs's impact on Berkshire is already significant and growing, with his role expanding well beyond what "investment manager" suggests.
GEICO Rescue: GEICO is one of Berkshire's crown jewels. Its cost advantage — the source of its ability to offer lower premiums — had been eroding. Combs's operational intervention is among the most consequential business decisions at Berkshire in recent years.
Investment Judgment: Together with Weschler, Combs manages a portfolio now worth tens of billions of dollars. Their analytical work increasingly shapes Berkshire's equity portfolio.
Proving the Model: Buffett has said he wants successors who can both invest and manage businesses. Combs has demonstrated both capabilities — a rare combination. He is central to Berkshire's future.
Key Passages from Buffett's Letters
Berkshire as far more than a job. When Charlie and I met Todd Combs, we knew he fit our requirements. Todd, as was the case with Lou, will be paid a salary plus a contingent payment based on his performance relative to the S&P. We have arrangements in place for deferrals and carryforwards that will prevent see-saw performance being met by undeserved payments. The hedge-fund world has witnessed some terrible behavior by general partners who have received huge payouts on the u
What’s more, their efforts have paid off. As 2011 started, Todd Combs joined us as an investment manager, and shortly after yearend Ted Weschler came aboard. Both of these men have outstanding investment skills and a deep commitment to Berkshire. Each will be handling a few billion dollars in 2012, but they have the brains, judgment and character to manage our entire portfolio when Charlie and I are no longer running Berkshire. Your Board is equally enthusiastic about my succ
GEICO.com. When I count my blessings, I count GEICO twice. Š Todd Combs and Ted Weschler, our new investment managers, have proved to be smart, models of integrity, helpful to Berkshire in many ways beyond portfolio management, and a perfect cultural fit. We hit the jackpot with these two. In 2012 each outperformed the S&P 500 by double-digit margins. They left me in the dust as well. Consequently, we have increased the funds managed by each to almost $5 billion (some of thi
*S&P 500, both Todd Combs and Ted Weschler handily did so. Each now runs a portfolio exceeding $7 billion. They’ve earned it. I must again confess that their investments outperformed mine. (Charlie says I should add “by a lot.”) If such humiliating comparisons continue, I’ll have no choice but to cease talking about them. Todd and Ted have also created significant value for you in several matters unrelated to their portfolio activities. Their contributions are just beginning: *
*I therefore think it’s worthwhile for Todd Combs and Ted Weschler, our two investment managers, to each have oversight of at least one of our businesses. A sensible opportunity for them to do so opened up a few months ago when we agreed to purchase two companies that, though smaller than we would normally acquire, have excellent economic characteristics. Combined, the two earn $100 million annually on about $125 million of net tangible assets. I’ve asked Todd and Ted to each *