March 23, 2020 By:

In Bruce Berkowitz of the Fairholme Fund put 18% of his portfolio into AIG. Investors should have been paying attention as it subsequently. FORTUNE — With AIG stock cratering nearly 50% this year, all eyes have turned to investor Bruce Berkowitz, AIG’s largest private shareholder. Bruce Berkowitz (Trades, Portfolio): As we have written in all of our letters, we bought AIG at substantial discount to tangible book value.

Author: Goltizuru Nakree
Country: Equatorial Guinea
Language: English (Spanish)
Genre: Career
Published (Last): 9 April 2010
Pages: 259
PDF File Size: 1.74 Mb
ePub File Size: 4.24 Mb
ISBN: 467-3-30067-669-1
Downloads: 22646
Price: Free* [*Free Regsitration Required]
Uploader: Kajas

For the best Barrons. And secondly, many value investors have struggled in a market fuelled by easy money which has favored momentum and growth stocks. Over five years, however, it’s in the bottom one percentile. Distribution and use of this material are governed by our Subscriber Agreement and by copyright law.

Bruce Berkowitz Comments on AIG

He then joined consulting firm Strategic Planning Institute. In he set up Fairholme Funds, which managed three mutual funds and acted as an investment advisor to long-only institutional funds.

To order presentation-ready copies for distribution to your colleagues, clients or customers visit http: He, therefore, tends to hold highly concentrated portfolios — in his positions in Fannie Mae and Freddie Mac made up 36 percent of the fund. Berkowitz bets on the berrkowitz as much as on the horse; he looks for companies that are built to survive in any environment with strong management. Firstly, he has avoided the technology sector which is where most of the index gains have accrued.

The five positions above represent He often sticks with specific stocks for very long periods, something that has also hurt performance.


Why he turned out to be wrong on the U. He built a large position in when the US Treasury owned 92 percent of the company. It currently owns 1. AIG is taking to the road this week to entice prospective investors.

Berkowitz’s AIG Sale To Result In Huge Taxable Distribution

In other words, it’s time for fund owners to shoulder the cost of Faireholme’s successful bet on a risky company. He expected the Treasury stake to be sold at book value, but it was ultimately sold back to the market at a deep discount.

Berkowitz graduated from the University of Massachusetts Amherst in Article by Brian Dentino, Finbox. I mean, if you take a look now at the amount of the government shares, the government is going to do great. He favors simple bruc models and has tended to stick to financials, retailers, energy companies, metal producers and real estate stocks.

Fairholme Funds now manages the The Fairholme Fundan equity fund, as well as an income fund and a multi-asset fund. The government had a pretty good record selling its shares in Citi without hurting the stock price. He founded Fairholme Capital in to manage a hedge fund. Barron’s Bill Alpert wrote, back inthat one oddball hire in particular was partly to blame for lackluster performance in recent years.

Funds are required to distribute those gains to their shareholders, who, in turn, must pay taxes on them. By Scott Cendrowski May 10, Cashflow is King Berkowitz is a contrarian investor and invests in companies with reliable cashflows that are trading at attractive levels relative to those cashflows. You can get the latest data on the holdings discussed below at the Fairholme Capital page.

Bruce Berkowitz Comments on AIG –

The list value of stock holdings is down Check out our H2 hedge fund letters here. Over the past 15 years, it’s on the top one percentile of all large-cap growth funds, according to Morningstar.


By October he had stepped down from the board and became highly critical of the company. The stock had been the fund’s largest holding, and, at times in recent years, comprised nearly half of the fund’s portfolio. Berkowitz and Fairholme Capital Management bolted from American International Group AIG in the third quartera move that will hand investors in the firm’s flagship mutual fund a mammoth tax distribution.

Shorts, cash positions, foreign investments and other assets are not included. On the conference call with investors, Berkowitz ended his prepared remarks on AIG with a curious quote attributable to two value-investing luminaries. Subscribe to ValueWalk Newsletter. All Rights Reserved This copy is for your personal, non-commercial use only.

Berkowitz was mum on AIG AIG this year until yesterday, when the Wall Street Journal first reported that he took his lumps and told his investors in a conference call that he had made a critical error. SHLD for many years, having first invested in Sears Holdings Corporation Nasdaq: Another problematic investment for Berkowitz was AIG.

We respect your privacy no spam ever.

Here’s zig interview Barron’s did with Berkowitz when he was at the top of his game. Bruce Berkowitz is the founder and president of Fairholme Funds and a well-known value investor. Instead of the U.

This helped him outperform his peers in Capital gains are generated inside a fund when a manager sells winning positions.