It's been a rough patch of late for Bruce Berkowitz, the head of Fairholme Capital Management, LLC. Things didn't get any better yesterday.
The firm announced that Charlie Fernandez, president and Portfolio Manager at Fairholme -- and co-manager with Mr. Berkowitz of the firm's flagship Fairholme Fund -- resigned from the company. According to Fairholme, Mr. Fernandez left for personal reasons.
“I'm sure Charlie will do well in whatever he decides next," said Mr. Berkowitz. "All of us at Fairholme wish him the best, and hope to work again with him in the future.”
Mr. Fernandez joined the firm in 2008. Management at Fairholme gave no reason for his sudden departure.
Along with the news about Mr. Fernandez, Fairholme also reported two new hires. Fred Fraenkel will serve as chief research officer, while Dan Schmerin was named director of special situations.
Fairholme has certainly seen its share of special situations this year. Currently, the firm manages $8.9 billion in assets. That's about half what it started with. The company's fund's, once top performers, have seen billions in redemptions following disappointing results. Mr. Berkowitz, in particular, has been hammered by his large bets on financial giants, including American International Group and Bank of America.
Despite the high-level departure, Mr. Berkowitz is sticking to his guns. “At Fairholme, we continue to stay the course. Current opportunities in the financial services sector remind me of the early 1990's when it last paid to be greedy while most were fearful.”