Bruce Berkowitz must be one happy man.

The press-shy president of Fairholme Capital Management has a huge stake in bailed-out insurance company American International Group (NYSE: AIG) which has just about doubled in price year-to-date (from just under $30 per share to just under $60).

AIG currently represents a whopping 11 percent of Berkowitz’s $20-billion-plus portfolio. Even more amazing, Berkowitz owns almost one-quarter (24 percent) of all AIG shares outstanding (that is, before the U.S. government converts his huge Preferred shares in the company sometime next year).

Joseph La Perla, chief of Le Ferla Group, a unit of UBS Financial Services, and an investor in Berkowitz’s portfolio, told CNBC that the Fairhome investment vehicle is heavily concentrated.

AIG is the top holding, followed by Sears Holding (NASDAQ: SHLD), at 93 percent; then Citigroup (NYSE: C), 8.3 percent; and Morgan Stanley (NYSE: MS), at 7.9 percent.

While some investors might shy away from such a concentrated portfolio, La Ferla explained that he likes this strategy – since it reflects a strong conviction in the securities by the manager.

He estimates that at any given time the top ten stocks of Berkowitz’s fund represent at least 60 to 65 percent of the portfolio’s total assets. La Ferla indicated that financial stocks tend to dominate the portfolio.

And no one can argue with Berkowitz’s performance. So far in 2010, the Fairhome portfolio is up about 24.5 percent, soundly beating the 15 percent by the S&P 500 index.

Over the longer term, that is between 2000-2009, Fairholme gained 13.2 percent, versus a meager 0.95 percent for the S&P 500.

However, Berkowitz second biggest holding, Sears, gives La Ferla some concern, given that the stock has struggled mightily for the past five-plus years and analysts have little good to say about the company.

Then again, at one time in the not-too-distance past, the market was quite negative on AIG as well -- especially considering that just two years ago it received a government bailout in excess of $180-billion. Then in 2009, the company earned the public’s wrath after it was revealed that it paid millions in bonuses to top executives.

However, now there are some concerns about AIG’s performance in 2011, since the government has said it plans to sell off part of its stake in the company through one or more large public offerings.

At present, the U.S. Treasury holds shares of AIG Preferred stock, which, if, fully converted, would result in the government owning 92 percent of the company.

Some analyst are concerned that the government’s planned offerings could put pressure on AIG share price. UBS insurance analyst Andrew Kligerman has a $53 price target on AIG stock and a “neutral” rating on it.