Eddie Lampert as the Next Warren Buffett

There will never be another Warren Buffett, but that won’t stop anyone from deeming people new Warrens now and then. Buffett is too much a creature of the times — in a sense, we made Buffett who he is because we needed  someone like him, a grandfatherly patriach of equities.

Nevertheless, BusinessWeek is off hunting for Buffett this week, and it names Eddie Lampert and his ESL Investments as the Next Contender. With his 53% stake in K-mart and his penchant for unsexy investments he has delivered returns average 28% a year back to 1988, which has brought in investors like Michael Dell and David Geffen, among many others.

The key to his ambitions, though, is a 53% stake in Kmart Holding Corp. (KMRT ). If a fading textile maker in New Bedford, Mass., called Berkshire Hathaway Inc. (BRKB ) provided the launchpad for Buffett, then Kmart might do the same for Lampert. Much like the textile mill when Buffett got hold of it, the once-bankrupt Kmart is now throwing off far more cash — it has $3 billion on hand — than it can use in the business. It also has $3.8 billion in accumulated tax credits, which can offset taxes on future income, and a fast-rising stock that is valuable in deal-making. Those advantages make Kmart a perfect vehicle for bankrolling big acquisitions. They give Lampert “the ability to buy a lot of companies and shield a lot of income from taxes,” says John C. Phelan, a former ESL principal who is now managing partner of MSD Capital, which also manages Dell family money.

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