Warren Buffett picks another little-known successor (Reuters)

NEW YORK/BOSTON (Reuters) – Warren Buffett advanced his succession plan on Monday by naming Ted Weschler, a low-profile hedge fund manager who has produced out-sized returns in the last decade, to help manage the investments of Berkshire Hathaway Inc.

Weschler, 50, will start at the company early next year and work with Todd Combs, who joined Berkshire last year, to manage its equity portfolios. Buffett, 81, has said he might also bring in a third manager, but meanwhile he continues to oversee the lion's share of the company's $52.36 billion in U.S. equities himself.

Weschler, like Combs before him, has succeeded while keeping a low profile far from the canyons of Wall Street. The Charlottesville, Virginia-based money manager delivered total gains of 1,236 percent over the last 11 years, according to investors.

As of June 30, his Peninsula Capital Advisors had long positions in about $2 billion worth of stock, according to regulatory filings. Combs was managing about $400 million when he was hired.

Since Combs was hired, Buffett has made clear there would be more people added to the investment team to replace him eventually. When and how many, however, have been open questions that have weighed on Berkshire's stock, some analysts following the stock have said in recent weeks. Some investors say Berkshire shares are currently at their most undervalued in a generation.

A number of Buffett's best-known biographers, as well as prominent fund managers including Mario Gabelli, all told Reuters Insider they were not familiar with Weschler or his work. The same was true when Combs was appointed last year.

Moments after one of the biggest personnel mysteries in finance was lifted and Weschler was named as one of a likely trio of heirs to Buffett as managers of Berkshire's investment portfolio, he kept to his usual routine. He was at his desk at Peninsula -- the hedge fund he founded in Charlottesville, Virginia, in 1999 -- dialing investors, his receptionist said.

SECRET LUNCHES

Weschler's interest in Buffett, who is both chief executive of the ice-cream-to-insurance conglomerate and its money manager, has been growing for some time.

According to journalist Carol Loomis, a long-time friend of and ghost-writer for Buffett, Weschler paid millions of dollars to dine with the "Oracle of Omaha" twice in the last two years.

Unlike many who bid to have the annual charity lunch with Buffett to benefit anti-poverty group Glide, Weschler insisted on anonymity -- wanting his name to be kept out of the headlines and requesting a change of venue from the New York steakhouse where the lunch is usually held. Instead, Weschler, who bid $2.63 million, met Buffett on his home turf in Omaha.

Over the last years, pressure has mounted on Buffett to put a succession plan into place for the day he will no longer run the company. Buffett's roles of investment manager will be split after he retires; the names on the CEO succession list are secret, however.

Weschler has overseen a very concentrated portfolio with Direct TV, DaVita, which runs kidney dialysis centers, and Liberty Media, ranking among his biggest and most recent holdings.

In total, he held fewer than a dozen publicly traded U.S. stocks at the end of the second quarter, according to his most recent regulatory filing. He is not required to list stocks he may be shorting or otherwise betting against.

Weschler earned an undergraduate degree in economics from the Wharton School at the University of Pennsylvania, where Buffett began his own undergraduate education decades ago.

Before starting his stock-picking career in Virginia, Weschler worked at specialty chemicals and materials company W.R. Grace, where he at one time was assistant to the vice chairman.

The path for Weschler to join Berkshire was laid at this year's lunch when Buffett pitched the idea of a move to Omaha, Buffett told Loomis. "I very much wanted him to do it, but I didn't expect to get very far with the idea," Buffett said.

"Ted will no doubt make a lot of money at Berkshire. But he was already making a lot of money with his fund -- you can get an idea of that from the size of his (charity) bids -- so money wasn't a reason for him to come."

In Charlottesville, a city one-quarter the size of Omaha, Weschler and his wife have supported a number of charities from helping sponsor a youth film festival to donating to one that builds structures for communities in need.

(Editing by Lisa Von Ahn, Maureen Bavdek and Steve Orlofsky)

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Panetta in Iraq as another US soldier killed (AFP)

BAGHDAD (AFP) – US Defence Secretary Leon Panetta arrived in Baghdad on Sunday to urge Iraqi leaders to act against Iran-backed Shiite militias, as another American soldier was killed in the south of the country.

Panetta, who took office 10 days ago, flew in after visiting Afghanistan and was also to urge Iraqi leaders to decide soon on whether they want US troops beyond the scheduled pullout at the end of this year, a senior US defence official said.

About 46,000 US troops remain in Iraq, down from a high of 170,000 after the 2003 US-led invasion. They are scheduled to leave in less than six months unless a deal is reached between Baghdad and Washington.

"If they are to make a proposal with regards to the continuing US presence there, they have to make a formal request that we would obviously consider," Panetta told reporters shortly after his arrival.

He is due to meet President Jalal Talabani, Prime Minister Nuri al-Maliki and the president of Iraqi Kurdistan, Massud Barzani.

"The issues for Iraq are security there and what's being done, particularly to deal with the Iranian supply of weapons to militants in Iraq," Panetta said.

Three American soldiers have been killed so far this month, after June was the deadliest month in three years for US troops, with 14 killed.

A US military statement said a soldier was killed in southern Iraq on Sunday, but gave no other details.

Asked about increased attacks on US forces by Shiite militants backed by Iran, Panetta expressed "tremendous concern," and called on Iraqi authorities to do more to "go after those extremists that are making use of these weapons" supplied by Tehran.

"If we're all gonna be partners, they have a responsibility to protect against that kind of attack. It's in the interest of Iraq to provide for their own security," he said.

Iran has denied US accusations that it was smuggling weapons to insurgents in two of its neighbours, Iraq and Afghanistan.

Panetta said the United States was open to a request by Iraq on a troop extension.

"If they are to make a proposal with regards to the continuing US presence there, they have to make a formal request that we would obviously consider," Panetta told reporters.

"I think the secretary will convey to the Iraqis... that there's some urgency for them to make that request if they're going to make it," said a senior defence official travelling with the defence secretary.

Panetta is the latest senior US official to arrive in Iraq, asking officials to accept a contingent of American troops beyond 2011. US diplomatic sources in Baghdad say there has been no talk on the possible number who could remain.

But a possible extension would be deeply unpopular among the public in Iraq, where many people look upon the American soldiers as "occupiers."

Talabani, a Kurd, said on Saturday that political parties would announce their decision in two weeks on whether they want some US forces to remain.

Some Kurdish officials have said they want American forces to stay beyond the deadline, but the powerful Shiite movement of Moqtada al-Sadr has threatened to resume armed struggle against American troops if they extend their stay.

Panetta said he would also press Iraqi leaders to speedily appoint defence and interior ministers, posts which remain vacant because of political bickering, despite the formation of a unity government last December.

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