Fairholme big looking for new home after surprise exit

Fernandez bows out 'for personal reasons'; not the best year for Berkowitz

Oct 19, 2011 @ 6:43 pm

By InvestmentNews staff

+ Zoom

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.”

0
Comments

What do you think?

View comments

Recommended for you

Featured video

INTV

State Street's Brie Williams: The story behind the 'Fearless Girl' statue

The idea started with the creation of a statue to coincide with International Women's Day, and the results surpassed expectations, according to Brie Williams, head of practice management at State Street Global Advisors.

Video Spotlight

Will It Last As Long As Your Clients Do?

Sponsored by Prudential

Video Spotlight

The Catalyst

Sponsored by Pershing

Latest news & opinion

Brian Block's $4 million bonus was tied to a key metric at ARCP

Prosecution rests case in fraud trial against CFO of American Realty Capital Properties.

Edward Jones is winning the Google search war

Brokerage firm's digital marketing investment helps land it at the top of local and overall search engine results, report finds.

Voya's win in 401(k) fee suit involving Financial Engines bodes well for other record keepers

Fidelity, Aon Hewitt and Xerox HR Solutions are currently defending against similar fiduciary-breach claims.

Collective investment trusts getting more attention from 401(k) advisers

The funds are catching on due largely to lower costs and more product availability, but come with some inherent drawbacks.

Vanguard rides robo-advice wave to $65B in assets

Personal Advisor Services, four times the size of its closest competitor, combines digital and human touch.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print