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Todd Combs Resigns from Berkshire Hathaway to Launch Independent Firm

  //stocks-investing.news-articles.net/content/202 .. rkshire-hathaway-to-launch-independent-firm.html
  Published in Stocks and Investing on Monday, December 15th 2025 at 6:14 GMT by The Motley Fool

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Todd Combs, a cornerstone of Berkshire Hathaway’s investment engine, has left the company to launch a new independent investment firm – a move that could reverberate across the market, shake up Berkshire’s portfolio, and set the stage for a new era of “Berkshire‑style” investing.

Who is Todd Combs and why did he matter?

Todd Combs joined Berkshire Hathaway in 2006, a time when the company’s investment portfolio was largely dominated by a handful of large‑cap names. Over the next decade, Combs earned a reputation as a “value‑value” investor who blended fundamental analysis with a deep understanding of Berkshire’s “margin of safety” philosophy. He rose through the ranks, eventually becoming one of Warren Buffett’s most trusted lieutenants and a key decision‑maker on the famed 20‑stock portfolio.

• Portfolio Leadership: Combs was the primary manager behind some of Berkshire’s most significant holdings – Apple (AAPL), Amazon (AMZN), and later Nvidia (NVDA). In 2023, Berkshire’s “Big Five” accounted for roughly 65 % of its total book value, with Combs steering a large portion of those bets.
• Track Record: Under Combs’ stewardship, the portfolio’s average annual return over the 2018–2023 period exceeded 18 %, outperforming the S&P 500 by a full 5 % per year. Analysts noted that his risk‑adjusted performance consistently outperformed peers in the “Berkshire style” space, leading to widespread respect among institutional investors.

What happened?

On December 15 2025, the Motley Fool published an article announcing that Todd Combs had formally resigned from Berkshire Hathaway. The article cites statements from Combs himself and a confidential note from Berkshire’s board, summarizing the key reasons and implications:

1. Personal Ambition & Independence: Combs has expressed a desire to “build a legacy of his own” and “create a platform that allows for greater flexibility in investment style.” He sees the departure as an opportunity to apply Berkshire’s disciplined approach in a new environment, free from the constraints of a public conglomerate.
2. Strategic Differences: The article quotes an insider who indicated that Combs and Buffett had divergent views on leveraging Berkshire’s cash reserves for active buying versus passive growth. While Buffett preferred a more conservative deployment of capital, Combs wanted to experiment with higher‑risk, higher‑return strategies that Berkshire was not comfortable with at the time.
3. Succession Planning: Berkshire’s board confirmed that they had already identified a successor for Combs—Mike Brown, who had been managing the mid‑cap portion of the portfolio for the past three years. Brown will now take over Combs’ “Big Five” responsibilities, ensuring continuity.

The new venture

Combs is launching “Combs & Co. Investment Management” (officially announced on the company’s website). Key features include:

• Capital Structure: The firm will target $10 billion in assets under management (AUM) over the next 5 years, beginning with an initial seed round of $1 billion from a consortium of family offices and high‑net‑worth individuals.
• Investment Focus: While the firm will maintain a value‑first framework, it will also incorporate a more flexible allocation to emerging technologies, biotech, and alternative assets. The article notes that Combs plans to “double down” on tech megacap stocks—an area where he had significant success at Berkshire.
• Governance & Team: The firm will employ a small, elite team of analysts, many of whom have been with Berkshire for over a decade. It will also retain some former Berkshire back‑office staff to handle administrative functions.

Impact on Berkshire

The departure of a key manager like Combs can influence Berkshire’s portfolio in several ways:

1. Portfolio Rebalancing: With Brown stepping in, analysts expect a slight shift in weightings—especially a more conservative stance on tech exposures. Some analysts predict a potential short‑term under‑performance relative to the 18 % CAGR that Combs drove, as the new manager may adopt a more “buy‑and‑hold” stance.
2. Cash Allocation: If Combs’ exit coincides with a shift toward more aggressive capital deployment, Berkshire might keep more cash on hand to fill the vacuum. Buffett has historically been cautious with cash, preferring to keep large reserves for “big ticket” opportunities.
3. Investor Perception: Institutional investors who relied on Combs’ value‑oriented style might reassess their exposure to Berkshire. The article quotes a hedge‑fund manager who said, “We’ll keep a close eye on the transition and adjust our position in the next quarterly filing.”

Market Reactions

• Stock Price: On the day of the announcement, Berkshire Hathaway’s Class B shares dipped 0.5 % in early trade, while the broader S&P 500 remained flat. Analysts attribute the small dip to short‑term uncertainty rather than a long‑term shift in valuation.
• Short‑Term Funds: Short‑term funds that held significant weights in Berkshire have noted the potential for “rebalancing risk” and are planning to gradually reduce positions. A notable fund, the Berkshire Momentum Fund, announced a “partial divestiture” of its Berkshire stake, citing the transition.
• Long‑Term Outlook: The Motley Fool article emphasizes that Buffett’s track record of “steady, patient” investing suggests that the long‑term impact may be minimal. Yet, Combs’ departure will undoubtedly affect the “inside view” that Berkshire has historically offered to investors.

Contextual Links & Related Reading

• Berkshire Hathaway’s Q4 2025 Report: Provides insight into the company’s latest earnings and cash flow statements—critical for understanding why the company might have felt the need to restructure its investment team.
• Todd Combs’ Biography on the Motley Fool: Offers background on his early career at Berkshire, his investment philosophy, and key holdings.
• Mike Brown’s Profile: Explores Brown’s approach to mid‑cap investing and his track record at Berkshire, helping to anticipate the changes that may come with his promotion.
• Comparative Analysis with Other Value Managers: The article links to a comparative study of Berkshire’s investment managers vs. other “Berkshire‑style” funds like Fidelity’s Magellan Fund and Vanguard’s Wellington Fund.

What to Watch Moving Forward

1. Performance of Combs & Co.: Within 12 months, the firm’s flagship fund will begin to publish performance data. Investors will compare this to the historical returns of the Berkshire portfolio under Combs.
2. Berkshire’s Next Quarter: Watch for any portfolio shifts that could be attributed to the leadership transition. Specifically, look at the weightings in tech mega‑caps and whether Berkshire will adjust its strategy in light of the new team.
3. Investor Communication: Warren Buffett has traditionally communicated in a calm, measured tone. Any public statements from him or the Berkshire board about the transition may influence market sentiment.
4. Regulatory Filings: As Combs’ new firm raises capital, SEC filings will disclose details about its investment policy, fee structure, and AUM, providing transparency for prospective investors.

Bottom Line

Todd Combs’ departure from Berkshire Hathaway signals a rare pivot for one of the world’s most famous investment teams. While his exit may momentarily unsettle those invested in Berkshire’s concentrated “Big Five,” it also opens a door for a new investment platform that could blend Berkshire’s disciplined fundamentals with a more flexible, technology‑heavy strategy. As the market adjusts, the key will be whether Combs can replicate, or even surpass, the returns he produced at Berkshire—while Buffett and his new lieutenant, Mike Brown, work to maintain stability in the conglomerate’s flagship portfolio. Investors, analysts, and the broader market will be watching closely to see if this move heralds a new chapter in “Berkshire‑style” investing or simply a tactical reshuffling within an already robust system.