Okay, Warren Buffett isn’t a hedge fund manager, but Berkshire Hathaway (BRK.B) sure looks a lot like a hedge fund.
True, where hedge fund managers invest capital collected from investors, Buffett deploys cash generated by Berkshire’s insurance company holdings. But after that, similarities abound. After all, Berkshire owns outright or has sizable positions in other companies (as do hedge funds), and it even uses derivatives to help hedge risk.
Of course the most important similarity is that the company’s success has hinged on the investing genius of a single man — just like any killer hedge fund (but without all the ego). Berkshire’s up 28% for the year-to-date, beating the S&P 500 by 5 percentage points.
As of this writing, Dan Burrows did not hold a position in any of the aforementioned securities.