Berkowitz dumps Buffett, adds to broker-dealer

Fairholme Capital Management LLC sold off nearly all of its holdings of A shares of Berkshire Hathaway Inc. in the second quarter

Aug 22, 2012 @ 3:26 pm

By Jason Kephart

Bruce Berkowitz's faith in the world's richest man apparently is weakening.

During the second quarter, Mr. Berkowitz's Fairholme Capital Management LLC sold off nearly all of its holdings of A shares of Warren E. Buffett's Berkshire Hathaway Inc. (BRK.A) and reduced his holdings of the B shares by almost 17%, according to SNL Financial.

Fairholme held just six shares of Berkshire's A shares as of June 30, down from 1,573 at the end of March, and 803,705 shares of the B shares, down from 967,019, according to filings with the Securities and Exchange Commission.

The biggest difference between the two share classes is the price of a single share. As of Wednesday morning, A shares were trading at $128,529 a share; B-shares at $85 a share. Both classes have returned just over 11% year-to-date.

Mr. Berkowitz's spokeswoman Hedda Nadler declined to comment.

Mr. Berkowitz's biggest addition in the quarter was an increase in its stake in broker-dealer Jefferies Group Inc. (JEF) by 2.7 million shares, or 2%. Jefferies' stock fell 31% during the quarter, according to SNL.

Fairholme has been enjoying a bit of a renaissance this year after struggling mightily last year. The flagship Fairholme Fund (FAIRX) has returned 30% year-to-date, making it the top-performing large-cap-value fund over that time, according to Morningstar Inc.

This year's gains haven't been enough to wipe away the stink of 2011, when the fund lost 32% and was the worst-performing large-cap fund.

The fund's three-year annualized return of 5.89% still rank near dead last in the large-cap category.


What do you think?

View comments

Recommended for you

Sponsored financial news

Featured video


The #MeToo movement and the financial advice industry

Attendees at the Women to Watch luncheon commend the #MeToo movement for raising awareness about the issue of sexual harassment and bringing women together.

Latest news & opinion

What to watch for next with the DOL fiduciary rule

Much hinges on whether the Labor Department appeals the 5th Circuit decision by April 30.

Social Security benefits losing buying power

Low inflation combined with rising Medicare costs threaten the adequacy of seniors' income.

Finra looks to streamline broker-dealer exams

CEO Robert Cook says three examination teams may be consolidated.

The 401(k) robo-revolution is here

Could human advisers be displaced as digital-advice firms use technology to deliver services to plan sponsors and participants?

SEC forging ahead on fiduciary rule despite DOL rule decision in 5th Circuit

Chairman Jay Clayton says 'the sooner the better' when asked when an SEC fiduciary rule will be ready.


Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting It'll help us continue to serve you.

Yes, show me how to whitelist

Ad blocker detected. Please whitelist us or give premium a try.


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print