Bloomberg News

Fairholme’s Berkowitz Trims Holdings of Fannie, Freddie (1)

May 15, 2014

Bruce Berkowitz, the money manager battling the U.S. government over the future of Fannie Mae (FNMA:US) and Freddie Mac, cut his stakes in the common stock of both U.S.- owned mortgage finance companies in the first quarter.

Berkowitz’s Fairholme Capital Management LLC sold 6.8 million shares of Fannie Mae, bringing his holdings to 19.2 million shares with a market value of $74.7 million as of March 31, according to a regulatory filing today. He sold 2.2 million shares of Freddie Mac, cutting his stake to 17.2 million shares with a market value of $66.3 million.

Berkowitz’s main investment in the mortgage companies is through their preferred shares, which are more senior to common in the capital structure. Fairholme maintained its preferred shares in both firms, which rose in value during the first quarter to more than $1.4 billion.

The firm is pursuing a federal court challenge to the U.S. practice of sweeping up all of the companies’ profits each quarter. Fairholme, along with private shareholders including Perry Capital LLC, is pushing the U.S. to return the companies to private ownership, saying shareholders should benefit from their holdings.

Fannie Mae gained 42 percent this year and Freddie Mac climbed 46 percent.

To contact the reporter on this story: Charles Stein in Boston at

To contact the editors responsible for this story: Christian Baumgaertel at Pierre Paulden

Shake It Up

Companies Mentioned

  • FNMA
    (Federal National Mortgage Association)
    • $2.46 USD
    • 0.13
    • 5.28%
Market data is delayed at least 15 minutes.
blog comments powered by Disqus