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Fairholme AUM down 70% (ouch!)


BargainValueHunter
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Thanks Jacob from ValueWalk!!  :)

 

http://www.valuewalk.com/2012/01/fairholme-brutal-year-performance-32-aum-declines-70/#.Tyb69lyCkhU

 

Fairholme Fund run by Bruce Berkowitz just released their year end letter. To say Bruce Berkowitz had a bad year is an understatement. Not only did the fund drop by more than 32%, but assets under management (aum) also dropped from ~$23B to $7B; that is a 70% drop in assets! Even John Paulson who lost 47% in 2011, did not see such a drastic decline in aum.
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Thanks for posting Jacob.

 

Painful.

 

Seems self reenforcing decline especially seeing that he is so concentrated (redemptions lead to selling of holdings, which lead to lower prices which lead to more redemptions).

 

Wonder if he has looked at different business model, like FFH or BRK.

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Biaggio, that seems to be what's happening.  People are withdrawing money, causing the fund to have to sell at a loss.  This is a big problem for mutual funds and why individual investors or groups like FFH and BRK can so handily beat them. 

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Yup this is his own fault for not closing the fund to outside investors when he had the chance.  I wonder if he'll learn his lesson and close it next time he has a good run.  Or maybe he'll switch to JOE and make a deal with Eddie to close up shop at Fairholme.  He still has a lot of money though.  Still about as big as YACKX for example...  As a shareholder I'm kind of upset by his refusal to close up shop back in the day...

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On February 8, 2012, Fairholme Capital Management will broadcast an interview with Bruce Berkowitz, Chief Investment Officer.  Fred Fraenkel, Chief Research Officer, will moderate the conversation.

 

Shareholders can submit questions to Bruce via email at investorrelations@fairholme.net by Sunday, January 29th. 

 

His answers will be taped and the entire interview will be posted on www.fairholmefunds.com on February 8th. 

 

Fairholme hopes this conversation will lead to a better understanding of why Fairholme is staying the course with the portfolio that Bruce has built, and why he thinks that this portfolio will position Fairholme Funds to deliver long-term shareholder value.  That is Fairholme’s mantra.

 

http://www.fairholmefunds.com/pdf/ConversationBB.pdf

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