The president and co-manager of Fairholme Capital Management LLC has resigned, as the $8.9 billion mutual fund firm continues to suffer from bets on financial stocks and a real-estate development company.
Charles Fernandez, who was also a director, stepped down on October 17 for what Fairholme chief Bruce Berkowitz said were personal reasons.
Fairholme also made two new appointments: Fred Fraenkel, the former head of research for Lehman Brothers, will become chief research officer, and Dan Schmerin, a former Treasury Department official who oversaw its Public-Private Investment Program, will become director of special situations.
The changes come after a rocky year for Berkowitz's flagship Fairholme Fund
The performance is due to bets that have backfired on the insurer American International Group Inc
In a statement, Berkowitz said Fairholme will continue to stay the course on its financial-stock investments.
Fernandez also resigned from his position as a board member of St Joe, according to a regulatory filing. Fairholme is the biggest shareholder of the company.
Fernandez's departure on October 17 came ahead of a report in the financial publication Barron's on Sunday that was critical of his tenure.
(Reporting by Lauren Tara LaCapra in New York, editing by Maureen Bavdek)