Fairholme big looking for new home after surprise exit

Fairholme big looking for new home after surprise exit
You wouldn't blame Bruce Berkowitz if he thought the world was ganging up on him. This year, he's been embroiled in a boardroom fight at St. Joe's. Clients have withdrawn billions from the firm's mutual funds. Meanwhile, Berkowitz' big bets on big financial companies have failed to pay off so far. And now, Charles Fernandez, co-manager of the firm's flagship fund, has resigned unexpectedly.
FEB 01, 2012
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.”

Latest News

Most asset managers are using AI, but few let it call the shots
Most asset managers are using AI, but few let it call the shots

Survey finds AI widely embedded in research and analysis, but barely touching portfolio construction or trade execution.

LPL, Raymond James score fresh recruits in advisor recruiting battle
LPL, Raymond James score fresh recruits in advisor recruiting battle

Two firms land teams managing more than $1.1 billion in combined assets from Kestra and Edward Jones.

Edward Jones facing more race bias claims in new lawsuit
Edward Jones facing more race bias claims in new lawsuit

A private partnership, Edward Jones is a giant in the retail brokerage industry with more than 20,000 financial advisors.

Advisor moves: LPL recruitment momentum continues with $815M Northwestern Mutual team
Advisor moves: LPL recruitment momentum continues with $815M Northwestern Mutual team

Meanwhile, Raymond James and Tritonpoint Partners separately welcomed father-son teams, including a breakaway from UBS in Missouri.

SEC chief Atkins signals caution on prediction market ETFs amid broader rethink of novel fund structures
SEC chief Atkins signals caution on prediction market ETFs amid broader rethink of novel fund structures

Paul Atkins has asked staff to solicit public comment on novel ETFs, pausing the clock on as many as 24 filings linked to the booming event contracts market.

SPONSORED Are hedge funds the missing ingredient?

Wellington explores how multi strategy hedge funds may enhance diversification

SPONSORED Beyond wealth management: Why the future of advice is becoming more human

As technical expertise becomes increasingly commoditized, advisors who can integrate strategy, relationships, and specialized expertise into a cohesive client experience will define the next era of wealth management