Shares of bond insurer MBIA Inc and bailed-out insurer American International Group Inc soared on Tuesday after Bruce Berkowitz's Fairholme Capital Management disclosed new stakes in the companies.
Fairholme holds an 11.1 percent stake in MBIA and a 24.3 percent stake in AIG as of June 30, according to U.S. Securities and Exchange Commission filings late on Monday.
Fairholme Capital, an investment adviser with about $16.5 billion under management as of March, had reported an 18.9 percent stake in AIG in May.
Fairholme is the largest private shareholder in AIG. The U.S. government owns nearly 80 percent of the insurer after pledging $182.3 billion in bailout funds. The Fairholme stake is a percentage of the float excluding the government's interest.
Fairholme's stake in MBIA also makes it the second largest shareholder in the bond insurer, behind private equity firm Warburg Pincus .
The Miami-based adviser is run by Berkowitz, who was named domestic stock manager of the decade by research firm Morningstar Inc in January.
Shares of MBIA were up 10.1 percent to $7.08 and AIG's shares were up 6.3 percent to $37.82 during early afternoon trading on the New York Stock Exchange.
(Reporting by Paritosh Bansal; Editing by Phil Berlowitz)