Berkowitz dumps Buffett, adds to broker-dealer

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.