Warren Buffett tapped a little-known hedge fund manager as the leading candidate to succeed him as the chief investment officer of Berkshire Hathaway Inc. when the legendary stock picker eventually steps down.

Berkshire named Todd Combs, manager of a small hedge fund from Connecticut, to oversee a portion of Berkshire's roughly $100 billion investment portfolio. The surprise appointment will be a challenge for Mr. Combs, 39 years old, whose fund recently had only about $400 million in assets and primarily invested in the shares of financial-services companies. Mr. Combs didn't return calls for comment.

The succession plan at Berkshire is among the most high-profile in modern American corporate history. Mr. Buffett, who turned 80 in August, has said he will likely split his job in two—into separate CEO and investing functions—and adds that he has no current plans to step down.

Mr. Combs is "not going to take over the whole investment function as long as I'm around," Mr. Buffett said in an interview. "I have this dual position as CEO and CIO and I will remain in that."

Berkshire has previously identified three candidates who could succeed Mr. Buffett in the CEO role. Though the company hasn't named them officially, the front-runner is widely seen as David Sokol, a 53-year-old Omaha native who is chairman of Berkshire unit MidAmerican Energy Holdings and chief executive of NetJets, which sells fractional-ownerships of private jets to companies and individuals.