Fundsters and fans of Bruce Berkowitz
may want to check out today's report
by Shara Tibken of Dow Jones Newswires
. That's because Berkowitz has disclosed an inreased stake in two hard-hit companies: American International Group Inc.
and MBIA Inc.
, sending shares of both insurers sharply higher and instilling more confidence in the sector.
Berkowitz's Fairholme Capital Management
disclosed in a regulatory filing
that it increased its holding of AIG to 24 percent from 19 percent and
22.7 million shares of MBIA , making it the second-largest investor behind private equity firm Warburg Pincus. As a result, MBIA shares jumped 10 percent to $7.10, up 82 percent over the past 12 months and AIG grew 6.8 percent to $38, nearly tripling over the past 12 months, according to the report.
To be sure, Fairholme is AIG's largest private shareholder, holding 24 percent ofthe government-rescued insurer while its benefactor owns some 80 percent of the company, according to the report.
MBIA was one of the hardest-hit firms during the financial crisis because of to its role in selling derivative-based guarantees on mortgage-backed securities and collateralized debt obligations. As house prices fell, MBIA was forced to make good on those guarantees.
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