Fairholme Capital Management

Bruce Berkowitz

US-listed stocks across every Fairholme account, including accounts that belong to no fund below. Bruce Berkowitz is the founder and chief investment officer of Fairholme Capital Management, the firm he established in 1997 and runs from its Miami office. He earned a degree in economics from the University of Massachusetts Amherst in 1980, then spent years as a portfolio manager at Lehman Brothers before moving to Smith Barney, where he served as a managing director until leaving in 1997 to start his own firm. Two years later he launched The Fairholme Fund, the mutual fund that carries his name to most retail investors. Berkowitz is a concentrated, contrarian value investor. He traces his approach to Benjamin Graham's "The Intelligent Investor" and describes his own style as "counting the cash": he looks for businesses with strong management and dependable cash flows, then buys them when they are deeply out of favor. He runs a deliberately small book — typically a handful of positions — and holds them through long stretches when the market disagrees with him, betting that conviction beats diversification. His run through the 2000s earned him recognition as Morningstar's Domestic-Stock Fund Manager of the Year for 2009 and its Domestic-Stock Fund Manager of the Decade for 2000 through 2009, and Institutional Investor named him its 2013 Money Manager of the Year. His defining trade came during the financial crisis, when Fairholme put much of its money behind American International Group, the insurer the U.S. government had just rescued with a massive bailout. Berkowitz argued the insurance franchise itself was intact and worth far more than the market allowed, a bet that became the firm's signature episode and a fixture of its reputation as a buyer of beaten-down companies.