AIG (AIG) common (41.0%) and warrants (8.1%) remain the Fund’s locomotive. Last year, AIG increased its quarterly dividend by 25% and bought back over $3.4 billion of stock. Efficient capital management allowed the company’s reported book value to grow by about 15% year-over-year to $77.35 per share as of Q3 2014. Going forward, we expect that AIG’s property and casualty business will be the main driver of further increases in value. If management is able to deliver underwriting margins and expense efficiencies consistent with its peer group, then the company’s book value and stock price will meaningfully increase. We shall soon see.
Form Bruce Berkowitz (Trades, Portfolio)'s Fairholme Fund 2014 Annual Report and Investor Letter.
