Bloomberg News

Berkowitz Says He’d Buy AIG Shares From U.S. Given ‘Enough Cash’

June 10, 2011

June 10 (Bloomberg) -- Bruce Berkowitz, chief investment officer at Fairholme Capital Management LLC, said he would help buy the U.S. Treasury’s stake in American International Group Inc. if he had the money.

The gradual divestment by Treasury of its 77 percent holding in AIG is “the No. 1 worry” among investors considering a purchase of the New York-based insurer’s stock, Berkowitz said yesterday in an interview from the Morningstar Inc. investor conference in Chicago. The interview is scheduled to air today on Bloomberg Television.

“People want to stay away until the United States Treasury is out, which has pushed the price down dramatically,” said Berkowitz, who controlled 2.3 percent of AIG through Fairholme as of March 31. “If I had enough cash, it wouldn’t take long at all” for Treasury to reduce its stake below 50 percent, he said.

AIG is the second-worst-performing stock in the Standard & Poor’s 500 Index this year. The insurer, once the world’s biggest, is down 42 percent from Dec. 31 through yesterday, compared with the 2.5 percent advance in the S&P 500. AIG posted its first annual profit in three years in 2010. Berkowitz said he increased his AIG stake in May by buying stock in a Treasury offering.

“I think a bunch of people should get together who really do recognize the value of AIG, and just take the U.S. Treasury out tomorrow,” Berkowitz said.

--Editors: Dan Reichl, Stephen West.

To contact the reporter on this story: Erik Schatzker in New York at eschatzker@bloomberg.net. Andrew Frye in New York at afrye@bloomberg.net.

To contact the editor responsible for this story: Dan Kraut at dkraut2@bloomberg.net.


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