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Fairholme Reopens to New Investors

AllianceBernstein to buy W.P. Stewart, FPA Paramount alters its focus, Fidelity to roll out a short-duration high-yield fund, PIMCO plans for a managed-futures fund, and a sad farewell to retired T. Rowe Price manager and 1995 Fund Manager of the Year Jack Laporte.

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On Aug. 15, 2013, Fairholme announced that it has reopened the $7.9 billion, Silver-rated  Fairholme Fund (FAIRX) to new investors, effective as of this past Monday.

In a release, the fund's advisor, Fairholme Capital Management, noted that the fund's board had decided to reopen the ultraconcentrated fund "based on the expectation that given the fund's current holdings, investment opportunities, and liquidity, inflows from new investors can be invested in a manner that is consistent with" Fairholme Fund's investment objective and strategies. The fund had seen investors pull out $10 billion in assets in 2011 and 2012, requiring manager Bruce Berkowitz to sell positions during those years that he would have preferred to keep. As a result, the firm announced early in the year that it would close at the end of February 2013 as a way to reduce the risk of hot inflows and stabilize its shareholder base. The closing also was aimed at preventing current positions from being diluted by potential inflows; diversification guidelines prevent the fund from adding to positions greater than 5%.

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Morningstar Fund Analysts does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.