When Warren Buffett announced his retirement in May, investors immediately considered who would fill his shoes.
In terms of his role as CEO of Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B), that question has already been answered.
Back in 2021, Greg Abel was named as Buffett's eventual successor.
At the most recent Berkshire Annual General meeting, Buffett shocked investors by announcing he would be stepping down by the end of the year. At the age of 94, Buffett has well and truly earned retirement. However, a large number of investors had assumed he would never retire.
Buffett is widely regarded as the world's most successful investor. Under his leadership, Berkshire shares have increased at a compound annual growth rate (CAGR) of around 20% for almost six decades.
Other prominent fund managers, such as Peter Lynch, have achieved higher annual returns. However, Buffett has uniquely sustained an impressive track record over such a long period of time that he has earned the title of the greatest investor in history in many investors' eyes.
But Buffett has been more than just a company CEO with an impressive track record. He is renowned for inspiring thousands of investors and has acted as a source of wisdom during periods of market volatility.
Perhaps Greg Abel will grow into that role, too.
Or maybe, the next Warren Buffett will be closer to home.
Could the next Buffett be an Australian fund manager?
In January, the Australian Financial Review named three of Australia's most successful fund managers.
These managers have delivered double-digit returns over the past ten years and provided their outlook for the year ahead.
David Wilson, deputy head of Australian equities growth at First Sentier Investors, which manages the Colonial First State Geared Share Fund, was the first Australian fund manager named. Colonial First State's Peter Labrie manages the gearing of the fund. Between 2015 and 2024, the fund returned a CAGR of 19.67%. Impressively, this roughly matches Buffett's long-term track record.
WIlson said stock selection was critical in a geared portfolio, amplifying both the errors and successes. Wilson attributed the CFS Geared Share Fund's success to picking strong Australian companies. He named Aristocrat Leisure Ltd (ASX: ALL), WiseTech Global (ASX: WTC), CSL Ltd (ASX: CSL), Brambles Ltd (ASX: BXB), and Resmed Inc (ASX: RMD).
The second fund manager cited was Alex Pollak, chief investment officer and founder of Loftus Peak. Between 2015 and 2024, the Loftus Peak Global Disruption Fund returned a CAGR of 18.15%, going close to Buffett's 20% long-term track record.
The fund has owned Nvidia (NASDAQ: NVDA) since 2015. Pollack expects further upside from the artificial intelligence giant. He also believes AI-infused companies such as Salesforce (NYSE: CRM), ServiceNow (NYSE: NOW), and Datadog Inc (NASDAQ: DDOG) will continue to do well.
Pendal portfolio manager Lewis Edgley was the third Australian fund manager to be named. Between 2015 and 2024, the Pendal MicroCap Opportunities Fund returned an annualised 15.82%, another impressive run. Edgley's top stock picks for the year ahead included TechnologyOne Ltd (ASX: TNE), Codan Ltd (ASX: CDA), and Gentrack Group Ltd (ASX: GTK).
Foolish Takeaway
In the weeks that have followed Warren Buffett's retirement announcement, investors have pondered who might be capable of filling his shoes. With Greg Abel set to take on the role of Berkshire CEO at the end of the year, he may rise to the occasion. However, several Australian fund managers, who have been quietly building outstanding track records over the past 10 years, may be candidates as well. Even if they don't rise to Buffett's level, they are certainly worth following in the coming years.
