Founder and Managing Member of the Fairholme Fund

What with the financial crisis continuing to rock the global market, most investment funds have taken a turn for the worse. There is one fund manager, however, who is still excited at the potential for making a lot of money. And this is not just naïve optimism talking, but seasoned and calculated confidence in his expertise. Meet Bruce Berkowitz.

Fortune 500 recently identified Bruce Berkowitz’s Fairholme fund as one of the five funds for 2009 which stands above the rest. He is currently the managing member and portfolio manager of Miami-based Fairholme Capital Management, L.L.C. This is a post he has manned since the company’s inception in 1999. Bruce Berkowitz is also Fairholme’s president and director of the company. His other affiliations include a directorship and audit committee membership in TAL International and White Mountains Insurance Group.

Shortly after Bruce Berkowitz graduated from the University of Massachusetts Amherst, he worked for a time at Lehman Brothers. As a management consultant, he helped open the firm’s first private client office. From 1993-1997 Bruce Berkowitz was part of esteemed investment firm Smith Barney, Inc. as one of its managing directors. Then finally, in late 1999, he founded Fairholme, which was named after the last street he lived on in London from 1981-1989.

In the course of less than a decade, Bruce Berkowitz grew Fairholme Capital Management to what is now a $9 billion portfolio. Around $7.2 billion of that is in the Fairholme Fund (FAIRX) which he himself manages. The five-star, large-blend fund tops its Morningstar category for the one, three and five-year periods. What is remarkable about the fund is that it has annualized returns of better than 9%, overshadowing away the S&P 500 by close to 14% a year.

Bruce Berkowitz is a follower of Benjamin Graham’s investment strategy. He manages a concentrated portfolio (currently at 22 stocks and two bonds) by choosing only companies with healthy cash flows, solid assets, and excellent management. With a growing focus on health and wellness, he has been investing in health care companies and pharmaceuticals. Among his top picks are UnitedHealth Group, Wellpoint, Forest Laboratories, and Pfizer.