Fairholme Funds, Inc. Launches Fairholme Allocation Fund

On January 3, 2011, the Fairholme Allocation Fund will be open to investors.  

According to the announcement, the Fairholme Allocation Fund (ticker: FAAFX) seeks long-term total return from capital appreciation and income, and it attempts to achieve this investment objective by “investing in a focused portfolio of investments in the equity, fixed-income and cash and cash-equivalent asset classes.” 

The proportion of the fund’s portfolio invested in each asset class will vary from time to time “based on Fairholme’s assessment of relative fundamental values of securities and other investments in the class, the attractiveness of the investment opportunities within each asset class, general market and economic conditions, and expected future returns of investments,” according to the Miami-based firm.  

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The fund seeks to capitalize on anticipated fluctuations in the financial markets by changing the mix of the Fund’s holdings in the targeted asset classes, and will use Fairholme’s focused, multi-sector, multi-strategy, value-based approach, according to a press release.  

The minimum investment to open a new account is $25,000. The minimum subsequent investment for regular accounts is $2,500 and $1,000 for retirement accounts. The annual fund operating expense is 0.75%. 

More information is available at http://www.fairholmefunds.com. 

Rattner Settles N.Y. Pay to Play Charges for $10M

Steven Rattner, former founding principal of private equity firm Quadrangle Group and former Obama administration "car czar," has agreed to a $10 million settlement of pension pay-to-play charges in New York.

A news release from New York state Attorney General Andrew Cuomo said the deal with Rattner also called for Rattner to be banned from appearing in any capacity before a public pension fund in New York for five years.

The deal announced Thursday wraps up Cuomo’s two pending lawsuits relating to the circumstances surrounding $150 million in investments in Quadrangle from the New York State Common Retirement Fund. The suits alleged Rattner paid kickbacks to help his company land the pension business in 2004 and 2005; Rattner denied wrongdoing.

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“The state pension fund is a valuable asset held in trust for retirees and supported by taxpayers,” Cuomo said in the announcement. “Through the many cases, pleas and settlements in this investigation, I believe we have been able to help restore and protect the integrity of the state pension fund.”

According to the Cuomo announcement, with Rattner’s deal, the pay-to-play probe has secured agreements with nineteen firms and five individuals, garnering over $170 million for New York and the pension fund. The investigation has led to eight guilty pleas, including pleas by former Comptroller Alan Hevesi, his chief political consultant, and his Chief Investment Officer.

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