Li Lu: Possible Berkshire CIO Candidate?

May 17, 2010 · 1 Comment

By Steve Jordon (World Herald)

Charlie Munger is interested in China, and now the Chinese can learn more about Munger thanks to an imaginative friend who, some have said, might handle Berkshire Hathaway’s investments some day.

Munger, vice chairman of Berkshire and longtime confidant of Berkshire CEO Warren Buffett, turned 85 last year. That’s an auspicious birthday among the Chinese, according to Li Lu, who met Munger several years ago.

Lu decided to surprise Munger with a translation of his biographical collection of speeches, writings and observations, “Poor Charlie’s Almanack,” a Ben Franklin-esque volume published in 2005.

Lu gave Munger a proof of the translated book on his 86th birthday, and the first copies were available for sale at this month’s Berkshire shareholder meeting in Omaha. Copies are just now filtering into bookstores in China, Lu said, out of an initial printing of 5,000 copies.

A professional translator took first crack at turning Munger’s pithy prose into Chinese, but Lu said he edited the final version himself because it would be difficult for someone else to convey Munger’s exact meaning in Chinese.

“I know how Charlie thinks,” Lu said. “It came out quite well.”

That Lu is in touch with Munger’s thinking is no surprise.

It was Munger who turned Buffett’s attention to the Chinese automaker BYD Inc., which resulted in a 10 percent ownership share by Berkshire. And it apparently was Lu who told Munger about BYD. Lu declined to discuss the matter, beyond his role with the translated book.

Lu also owns a substantial stake in BYD, and Munger once mentioned a “young Chinese-American partner” who had suggested BYD as an investment, according to the Seeking Alpha website. Munger has named Lu as an outstanding money manager, and at this year’s Berkshire shareholder meeting Munger said one of the candidates to take over investment duties at Berkshire had scored a 200 percent return with no borrowed money.

Munger didn’t say who the candidate was, but BYD had just such a substantial return.

Lu operates an investment fund out of the same office building in Pasadena, Calif., as the Berkshire division Wesco Financial, which Munger heads.

According to several news accounts, Lu was born in 1966 but separated as an infant from his parents, who were sent to labor camps during the so-called Cultural Revolution because they were intellectuals. His adoptive family was killed in a 1976 earthquake, and he was homeless for a year before finding his grandmother, who encouraged his education.

Lu was a principal student leader during the 1989 Tiananmen Square uprising, escaping to the United States later that year. He attended Columbia University from 1990 to 1996, earning a bachelor’s degree in economics, a law degree and an MBA at the same time.

The New York Observer magazine reported two years ago that Lu wrote a book about his experiences in China and used the royalties from the book and from working at a law firm to begin investing.

He had success on Wall Street with a high-risk hedge fund called Himalaya Capital Partners. One of his investors was the rock star Sting, plus many business luminaries.

Categories: News
Tagged: berkshire hathaway, BYD, Charles Munger, himalaya capital, li lu, Value Investing, Warren Buffett

1 response so far ↓

  • valueinvestor // May 24, 2010 at 1:39 am | Reply

    Hi Li is definitely a good investor as his track record show.
    However as the Chinese economy grows and Berkshire’s interaction with it through direct investments like BYD and subsidiaries like Iscar increases, would it not be better to have a more apolitical investment manager?
    After all after the TSquare issue I am not sure the Chinese would welcome him even if he can invest 100′s of billions of dollars?
    What do you think??

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