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.
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This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers visit http: Berkowitz and Fairholme Capital Management bolted from American International Group AIG in the third quartera move that will hand verkowitz in the firm’s flagship mutual fund a mammoth tax distribution.
Capital gains are berkowits inside a fund when a manager sells winning positions. Funds are required to distribute those gains to their shareholders, who, in turn, must pay taxes on them. The stock had been the fund’s largest holding, and, at times in recent years, comprised nearly half of the fund’s portfolio.
In other words, it’s time for fund owners to shoulder the cost of Faireholme’s successful bet on a risky company. While AIG paid off handsomely, the performance of Berkowitz’s fund has been, shall we say, mercurial. Over the past 15 years, it’s on the top one percentile of all large-cap growth funds, according to Morningstar.
The Rise And Fall Of Bruce Berkowitz’s Fairholme Capital
Over five years, aib, it’s in the bottom one percentile. Barron’s Bill Alpert wrote, back inthat one oddball hire in particular was partly to blame for lackluster performance in recent years. Here’s an interview Barron’s did with Berkowitz when he was at the top of his game.
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How Bruce Berkowitz stumbled with AIG | Fortune
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Not Just Sears Holdings Corp (SHLD) – The Rise And Fall Of Bruce Berkowitz’s Fairholme Capital
AIG headquarters office stands in New York. We determined that it was an opportune time to realize the gain and began to reduce the position in AIG common stock.
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