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From the archives: A star on the rise

FORTUNE — In the Oct. 30, 1989, issue, Fortune profiled 12 rising stars in the world of investing under a provocative headline: “Are These the New Warren Buffetts?” There can be only one Oracle of Omaha, of course. But looking back, our search for investors with a Buffett-like skill for compounding money proved to be highly successful. “Odds are that at least a few will go on to investing fame and their clients to fortune,” the story read. More than 20 years later, that’s very true indeed.

Among the money managers we featured were Eddie Lampert, founder of the now $11 billion hedge fund ESL and chairman of Sears Holdings (SHLD); short-seller extraordinaire Jim Chanos of Kynikos Associates, perhaps best known for his prescient bet against Enron; Michael Price, who became a legend for his record running the Mutual Shares fund (TESIX); distressed-asset specialist Richard Perry of $9 billion Perry Capital; and even a hyper, curly-haired trader named Jim Cramer.

We also shined the spotlight on a young investor in Cambridge, Mass., named Seth Klarman. Klarman, then 32, had posted 28% annualized returns over his first seven years at Baupost Group. “Klarman’s exceptionally quick and subtle mind allows him to see value in many different guises,” writer Brett Duval Fromson observed. Much like Buffett himself.

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This article is from the February 27, 2012 issue of Fortune.