Warren Buffett on alternative investments


Warren Buffett is definitely old school. He's still got some Wall Street "cred" because Berkshire Hathaway has fared well.

"If somebody bought Berkshire Hathaway in 1965 and they held it, they made a great investment — and their broker would have starved to death," Buffet said in a recent interview with DealBook.

But Buffet's not enamored of the current crop of alternative investment gurus. When columnist Andrew Ross Sorkin asked if there were any private equity investors that he admired, he flatly replied: "No." When asked if he followed any hedge fund managers, "he struggled to name any, before saying that he liked Seth Klarman, a low-key value investor who runs the Baupost Group, based in Boston."

He was quoted by Dealbook saying that,  "They're not as good as the old ones generally. The field has gotten swamped, so there's so much money playing and people have been able to raise money by just saying 'hedge fund,'" he said. "That was not the case earlier on; you really had to have some performance for some time before people would put money with you. It's a marketing thing."

He remains a fan of Julian Robertson, an example of an old-school hedge fund manager. All in all, people would have done better investing in Berkshire Hathaway rather than any hedge fund. As long as that holds true, he has the right to criticize.

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