MBIA Shares Rise After Berkowitz's Fairholme Buys 11.1% Stake


Share in financial services company MBIA (MBI) are up more than 10% in pre-market trading after Fairholme Capital Management, the investment firm headed by Bruce Berkowitz, disclosed a big stake in the bond insurer.

Fairholme increased its bet on the recovery of U.S. financial firms by buying an 11.1% stake in MBIA, the world's largest bond insurer. With over 22 million shares valued at about $146 million (based on Monday's closing price of $6.43), Berkowitz is the second-biggest holder of MBIA stock after Warburg Pincus, according to Bloomberg.

And MBIA wasn't Fairholme's only stake increase. The investment firm also boosted its ownership in bailed-out insurer American International Group (AIG). Already the biggest non-government shareholder in AIG, Fairholme raised its stake to 32.8 million shares, up from 25.5 million shares.

Fairholme also owns the largest stake in lender CIT Group (CIT), and the second-biggest in Regions Financial (RF), Bloomberg reports.