Insurance company AIG recently reached an agreement with the US government on how to repay the financial aid the company received during the recent financial meltdown. Bruce Berkowitz, through of the Fairholme Fund, spent close to $2 billion to acquire AIG’s common shares, preferred shares and debt. In the process, the fund has become the largest shareholder of the company.
In a statement released on Thursday, Berkowitz said his funds "strongly support the proposed solution to revitalize AIG in a fair and equitable manner for all constituents."
According to GuruFocus data, Berkowitz bought 15 million shares of AIG common shares in 1Q10 and another 17.7 million shares in 2Q10:
Besides, he owned 20.3 million preferred shares at the end of the first quarter and 29.9 million at the end of the second quarter of 2010.
In the past, Berkowitz commented on his AIG investment:
To see the other holdings of Berkowitz, click: http://www.gurufocus.com/holdings.php?GuruName=Bruce+Berkowitz
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In a statement released on Thursday, Berkowitz said his funds "strongly support the proposed solution to revitalize AIG in a fair and equitable manner for all constituents."
According to GuruFocus data, Berkowitz bought 15 million shares of AIG common shares in 1Q10 and another 17.7 million shares in 2Q10:
Besides, he owned 20.3 million preferred shares at the end of the first quarter and 29.9 million at the end of the second quarter of 2010.
In the past, Berkowitz commented on his AIG investment:
1. Berkowitz to the WSJ (7/29/2010):
“It’s a powerful franchise . . . that has been under the weather with most other financials in the United States,” Mr. Berkowitz said. “It’s a company that’s well run and is resuscitating itself with a significant global presence. And the price was right.” … As for AIG, Mr. Berkowitz continues to believe that the government can eventually sell its stake in AIG and exit the company and that a clear exit path should be established by the end of 2011.
2. Fairholme Funds Semi-Annual Report:
“Over one-half of The Fairholme Fund’s assets are invested in securities of mostly hated financial services and real estate related companies. After all, “there is no job growth without economic growth; no economic growth without access to credit; no access to credit without a stable, functioning financial system.” Financials tend to lead markets into and then out of recessions followed by asset deflation and then inflation. Never being 100% certain as to events and timing, approximately 20% of the Fund’s assets are in relatively, short-maturity corporate debt and cash equivalents.
Over one-third of The Fairholme Focused Income Fund is invested in short-term credits of American International Group, Inc. (“AIG”), General Growth Properties,Inc. (“GGP”) and others that are perceived to be or are in actual financial stress. Underlying equities lead us to believe that all are “money good.” Nearly two-thirds of the Fund is invested in cash and what we consider to be cash equivalents. “
3. Berkowitz interview with Consuel Mack of Wealthtrack
“A great company that stumbled for various reasons, that still has intact franchises, that still has the ability to repay tax payers, the New York Fed and the US Treasury, and will hopefully emerge a smaller, yet streamlined organization with [Charters], and the old SunAmerica, and with… It’s sad but some very valuable divisions will be sold: AIA, Alico… but we see the company has the ability to pay back tax payers over time. “
To see the other holdings of Berkowitz, click: http://www.gurufocus.com/holdings.php?GuruName=Bruce+Berkowitz
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