Charlie Munger personally backed an investor seeking to build the Berkshire Hathaway of Australia — even though he rarely trusts anyone except Warren Buffett to manage his money

One half of an investing duo, Charlie Munger, almost never uses anyone other than himself to manage his money. He recently gave a small amount of his money to a fund manager who is trying to build an Australian version of the company.

The founder of Stonehouse was invested by Munger, the vice-chairman of the company.

At his first annual meeting as a teenager, he modeled Stonehouse on the conglomerate. He wants to acquire and own businesses for a long time, and has structured his fund as a network of subsidiaries.

According to the Australian Financial Review, Munger said that he and Stonehouse's mindset was similar to that of Jennings. "Doing business is done in a very high-grade way."

Munger said that the world is full of madmen and that everyone is willing to stay rational. The billionaire investor has decried mindless speculation on meme stocks, cryptocurrencies, and other high-risk assets.

Stonehouse's subsidiaries include a horse transportation company, a plant supplier, and a maker of portable fridges and iceboxes.

Munger said that he owns different businesses that are similar to the ones run by Warren Buffet. It is difficult to acquire unrelated companies, earn a higher return on capital, and pay market prices for them.

Munger said that Stonehouse makes winning acquisitions because they are rare and prudent.

There is less competition to buy businesses in Australia than in the US, and Munger hopes his public support of Jennings will raise awareness of Stonehouse among future sellers of businesses.

The University of Chicago's endowment manager introduced the University of Chicago's right hand man to Jennings. They met in person in January after connecting over the internet.

The business has been "surreal" since Charlie became involved. He's become a business partner after admiring him my whole life.

Munger is not betting the farm on the investor.

He said that the money wasn't all that material for the Mungers. He is a rare type and I thought it would help him.

Munger said that Li Lu was the only outsider in 95 years to be trusted with his money. The investor praised Li at the time for focusing on Chinese stocks instead of the US market, and seems to see the same value in the focus on Australian businesses.

Stonehouse has around 120 million dollars in capital under management and is looking to buy businesses worth between $20 million and $150 million.

According to the manager of a market-beating $500 million fund, predicted cash-flow is the most important factor. He names six companies that fit the bill and lays out what investors should look for in a stock.