So Berkowitz, whose fund has gotten crushed by Sears-related equity investments and owns part of the smelly Seritage deal, was the fourth director to jump overboard in 10 months. For whatever pressing reasons he did that — including the flexibility needed to shut down his failed fund and to its aggrieved investors — he certainly must have seen a hopeless scenario that pushes bankruptcy concerns several notches up the scale.
below is bruce berkowitz's investment thesis on sears via his case study:For more from this investor, head to berkowitz's checklist for investing.Â sears has been one of the more shorted names among hedge funds (who have piled on as the retailer struggles).
"sears has a vast real estate empire complemented by unique businesses. capital's bruce berkowitz has released numerous case studies about his investments in the past and one of his latest features his investment thesis on his second largest position: sears holdings (shld).
Â his latest case study on sears showcases the key pieces to the investment, including:- real estate: vast property portfolio carried at low cost., fairholme remains sears' second-biggest shareholder, owning roughly 25 percent of its outstanding shares.
sears also has constraints, and we understand those constraints," berkowitz told fairholme investors on a february conference call.Â his latest case study on sears showcases the key pieces to the investment, including:- real estate: vast property portfolio carried at low cost.
But Berkowitz is very special. He is the Chief Investment Officer of Fairholme Capital Management, the largest outside holder of Sears Holdings’ shares (insiders Lampert and his hedge fund ESL remain the largest owners). In its filing with the SEC on August 14, Fairholme disclosed that it owned 28.86 million shares of Sears Holdings, or 27% of the total shares outstanding!
About this time last year, Seritage Growth Properties, the real estate investment trust that Sears CEO Eddie Lampert spun off from the retailer, said in an SEC filing that the department store chain had exercised its right to terminate the leases on 19 unprofitable stores. This marked the second time Sears chose to shutter a chunk of the stores it sold off to Seritage in 2015.