Fairholme Opens Hedge Fund, Up 23%, To Outsiders

Oct 7 2013 | 11:40am ET

Prominent mutual-fund manager Bruce Berkowitz is seeking $1 billion for his nine-month-old hedge fund.

Berkowitz's Fairholme Capital Management launched the fund at the beginning of the year and has now opened it to outside investors. Only institutions need apply—and those that do will have to pony up at least $5 million and agree to a one-, three- or five-year lockup. Berkowitz hopes to raise at least $1 billion within a year.

The hedge fund currently manages about $140 million of internal capital and is up 23% on the year. Fairholme Partnership, like Berkowitz's successful mutual funds, employs a concentrated, long-term strategy, and can invest in real-estate, make larger bets than the mutual funds and may even make private-equity style deals.

"The idea is that we would have the ability to make investments that I could not make in the mutual fund, or larger investments that would not be possible," Berkowitz told The Wall Street Journal.

Fairholme Partnership won't charge a management fee; instead, it will charge performance fees on a sliding scale, or between 15% and 25%, based on the length of lockup and subject to high-water marks.


In Depth

Creating An Offshore Hedge Fund Dream Team: The Seven Key Players

Jun 26 2015 | 6:47am ET

If you want to set up an offshore hedge fund, like any great team, you’re only...

Lifestyle

Hedgies Set to Compete in Wall Street Decathlon

Jun 8 2015 | 12:37am ET

The Wall Street Decathlon — a 10-event physical challenge that will crown “Wall...

Guest Contributor

6 Essential Principles To Balance Your Investment Risk

Jun 26 2015 | 10:07am ET

In this article, financial expert Greg Silberman explores how to hedge a private...

 

Editor's Note