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Fernandez Leaves Fairholme!


Gopinath
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Big deal!  Now you have the guy running the fund who started it, and was responsible for all of its early success.  I think this may be a good thing.  Managers like Berkowitz (stubbornly analytical and confident) should not work with other managers.  They are best as loners.  Cheers!

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I seem to recall a Fortune article indicating that Charlie was brought on because of his restructuring expertise.  Perhaps there's just not a lot of restructuring stuff left for him to work on...

 

In any case, I think Fairholme has always been a one-man show... would be interesting to hear the official reasoning though.

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Big deal!  Now you have the guy running the fund who started it, and was responsible for all of its early success.  I think this may be a good thing.  Managers like Berkowitz (stubbornly analytical and confident) should not work with other managers.  They are best as loners.  Cheers!

 

Buffett Munger?

 

If anyone thinks that Munger calls the shots at Berkshire, they are mistaken.  It's all Buffett.  Munger is a sounding board.  Prem has the final say at Fairfax.  Mohnish calls all his own shots.  Tim McElvaine has the final say.  Francis Chou has the only and final say.  Larry Sarbit was really a one man show.  I call the shots here. 

 

There are some teams out there that work well together, but usually it is one guy who makes the call.  Cheers!

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There are some teams out there that work well together, but usually it is one guy who makes the call.  Cheers!

 

What about Markel and Leucadia?

 

Tom Gaynor handles investments and Steve Markel handles insurance.  Ian Cummings and Joe Steinberg have worked together for a long time, and they are one of the rare exceptions.  I would still bet that one makes more of the calls than the other. 

 

It's a tough business to work as a team, because when things go wrong, there is always some second-guessing.  Barely anyone can come to a consensus on this message board on any single idea, so if your livelihood and reputation are on the line, it becomes even more difficult having confidence in someone else's decision when running a fund or company.  Cheers!

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I think Warren has previous said that he prefers a committee of one (the guy looking back at him in the mirror).

 

At some point, he was asked about putting 40% of his funds into AXP, and he said something to the effect of "can you imagine trying to get a committee to agree to that?"

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"he prefers a committee of one"

 

The IQ of a committee is equal to the IQ of the "dumbest" person divided by the number of people in the committee. i.e he is maximizing the intelligence of his committee

 

I think having partners can work if you have defined roles that compliment each other...each partner knows there own strengths/weakness and each works or is in charge of what they are good at.

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I think having partners can work if you have defined roles that compliment each other...each partner knows there own strengths/weakness and each works or is in charge of what they are good at.

 

I agree, that is how it works with us.

 

People are speculating that he is stepping down to take over JOE.  Read on another message board but who knows. I guess we'll watch to see if Fernandez steps down from there next.

 

I suspect that may be correct.  It would make sense for him to step in there, while Bruce runs Fairholme.  Cheers!

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While i hate to see Fernandez leave the fund, I am extremely pleased to see the fund's size decrease so much over the past year. I liked what i heard and read from Fernandez. He made sense when he spoke, as does Bruce. So few do these days. Bruce is the reason i have some family money with the funds, but I think fairholme is losing another person of talent.

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just pointing out that the team approach is alive and well at brk and luk. cheers!

 

Buffett talks to Ajit more than he talks to Munger.  And we saw what happened to Sokol who was also on the team.  One guy makes the final call, and that is no one other than Buffett.  Not Ajit, not Munger...no one else.  Cheers!

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http://www.investmentnews.com/article/20111019/FREE/111019896

 

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.

 

So he left JOE as well. :(

 

http://en.wikipedia.org/wiki/Fred_Fraenkel

 

Fraenkel has spent over 30 years in investing and his career includes being a member of Barron's year-end roundtable from 1982-1985, and heading global research at Lehman Brothers from 1987 to 1993. During that time, Lehman Brothers had its first number one ranking in the Institutional Investor rankings. He currently is chairman of Millennium 3 Capital, a venture firm specializing in early stage companies. Before founding Millennium 3 Capital in 2000, Fraenkel served as vice chairman of ING Barings Furman Selz and chief operating officer of Furman Selz . Before joining Furman Selz in March 1995, Fraenkel spent nine years at Lehman Brothers where he was a Managing Director and Director of Global Research overseeing 110 analysts located in New York, London, Tokyo and Hong Kong. As Global Research Director, Fraenkel was responsible for managing the department’s ascension in the Institutional Investor poll from a rank of 15th in 1987 to 1st in 1990, 1991, and 1992.

 

Prior to Lehman Brothers, Mr. Fraenkel was Chairman and Chief Executive Officer of Market America Group, an investment advisory firm. He also spent four and a half years as Director of Equity Research and a member of the Board of Directors at Prudential Securities. Mr. Fraenkel began his Wall Street career in 1974 as a securities analyst with Goldman Sachs & Company, and was Chief Investment Strategist for E. F. Hutton & Co. from 1980 to 1982.

 

Dan Schmerin was Chief Operating Officer, Legacy Securities Public-Private Investment, TARP Program, United States Treasury

 

 

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More info:

 

http://finance.fortune.cnn.com/2011/10/20/fairholme-fund-charlie-fernandez/?source=yahoo_quote

 

Last fall, Fernandez was fresh off a string of hits that earned Fairholme about $2 billion. First he saved subprime auto lender AmeriCredit. Fernandez worked consecutive sleepless nights around Thanksgiving 2008 to put together a deal so the desperate lender—close to filing bankruptcy— could sell a tranche of loans into the frozen credit markets. (In those harried days of 2008-09, Fernandez gained about 40 pounds.) Then in 2010, he sorted through one of the largest—and almost everyone agreed, the most complex—real estate bankruptcies in U.S. history. In a matter of two months, he had bought $1.8 billion worth of securities of General Growth Properties (GGP), the country's second-largest mall developer. In short order, a committee led by hedge fund manager Bill Ackman resurrected GGP and turned those securities into riches for Fairholme. It was Berkowitz who saw opportunity. It was Fernandez who hit the phones for two months straight to execute.

 

and

 

"I'm saddened," Berkowitz says of the move. "Shocked, no."
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More info:

 

http://finance.fortune.cnn.com/2011/10/20/fairholme-fund-charlie-fernandez/?source=yahoo_quote

 

Last fall, Fernandez was fresh off a string of hits that earned Fairholme about $2 billion. First he saved subprime auto lender AmeriCredit. Fernandez worked consecutive sleepless nights around Thanksgiving 2008 to put together a deal so the desperate lender—close to filing bankruptcy— could sell a tranche of loans into the frozen credit markets. (In those harried days of 2008-09, Fernandez gained about 40 pounds.) Then in 2010, he sorted through one of the largest—and almost everyone agreed, the most complex—real estate bankruptcies in U.S. history. In a matter of two months, he had bought $1.8 billion worth of securities of General Growth Properties (GGP), the country's second-largest mall developer. In short order, a committee led by hedge fund manager Bill Ackman resurrected GGP and turned those securities into riches for Fairholme. It was Berkowitz who saw opportunity. It was Fernandez who hit the phones for two months straight to execute.

 

and

 

"I'm saddened," Berkowitz says of the move. "Shocked, no."

 

It's times like these you find out who your friends really are.  He'll come back big.  Fernandez will realize he made a mistake one day.  Cheers!

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