Berkowitz dumps Buffett, adds to broker-dealer

Is Bruce Berkowitz down on Warren Buffett? Could be, seeing how Fairholme Capital unloaded nearly all of its Berkshire Hathaway A shares in the second quarter.
AUG 22, 2012
By  JKEPHART
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.

Latest News

The 2025 InvestmentNews Awards Excellence Awardees revealed
The 2025 InvestmentNews Awards Excellence Awardees revealed

From outstanding individuals to innovative organizations, find out who made the final shortlist for top honors at the IN awards, now in its second year.

Top RIA Cresset warns of 'inevitable' recession amid tariff uncertainty
Top RIA Cresset warns of 'inevitable' recession amid tariff uncertainty

Cresset's Susie Cranston is expecting an economic recession, but says her $65 billion RIA sees "great opportunity" to keep investing in a down market.

Edward Jones joins the crowd to sell more alternative investments
Edward Jones joins the crowd to sell more alternative investments

“There’s a big pull to alternative investments right now because of volatility of the stock market,” Kevin Gannon, CEO of Robert A. Stanger & Co., said.

Record RIA M&A activity marks strong start to 2025
Record RIA M&A activity marks strong start to 2025

Sellers shift focus: It's not about succession anymore.

IB+ Data Hub offers strategic edge for U.S. wealth advisors and RIAs advising business clients
IB+ Data Hub offers strategic edge for U.S. wealth advisors and RIAs advising business clients

Platform being adopted by independent-minded advisors who see insurance as a core pillar of their business.

SPONSORED Compliance in real time: Technology's expanding role in RIA oversight

RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.

SPONSORED Advisory firms confront crossroads amid historic wealth transfer

As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.