Billionaire Leon Cooperman’s Top Long-Term Holdings

#2 Chimera Investment Corporation (NYSE:CIM)

– Shares Owned by Omega Advisors (as of December 31): 13.37 Million

– Value of Omega’s Holding (as of December 31): $182.41 Million

Omega Advisors reduced its exposure to Chimera Investment Corporation (NYSE:CIM) by 687,285 shares during the final quarter of 2015, ending the year with 13.37 million shares valued at $182.41 million. According to a Schedule 13G filing submitted with the SEC in early February, Leon Cooperman owns 18.74 million shares of Chimera, which account for 9.9% of the company’s outstanding common stock. It should be noted that Mr. Cooperman acquired the initial stake in Chimera during the second quarter of 2012, a bet that has not been overly successful if ignoring the company’s dividend payments. Chimera Investment is a real estate investment trust (REIT) that primarily invests in a diversified portfolio of mortgage assets such as Agency RMBS, Non-Agency RMBS, Agency CMBS, residential mortgage loans, and real estate related securities. The REIT’s 2015 interest income grew $185 million or 27% year-on-year to $873 million, mainly due to the purchase of seasoned sub-prime residential mortgage loan pools during the second half of 2014 and 2015. The interest income figure for 2015 was also impacted by an increase in agency holdings, which contributed with an additional $12 million in interest income. Chimera Investment pays out an annualized dividend of $1.92 per share, which equates to an attractive dividend yield of 13.96%. The REIT’s shares have declined 14% over the past year. Israel Englander’s Millennium Management had 1.52 million shares of Chimera Investment Corporation (NYSE:CIM) in its portfolio at the end of 2015.

#1 American International Group Inc. (NYSE:AIG)

– Shares Owned by Omega Advisors (as of December 31): 4.10 Million

– Value of Omega’s Holding (as of December 31): $253.86 Million

American International Group Inc. (NYSE:AIG) represented Mr. Cooperman’s second-largest equity position at the end of the December quarter, accounting for 5.54% of his fund’s equity portfolio. Omega Advisors upped its position in AIG by 731,200 shares in the fourth quarter to nearly 4.10 million, which were valued at $253.86 million on December 31. AIG shares landed on the fund’s equity portfolio for the first time during the first quarter of 2012. The insurer has been under pressure from activist investors lately, including billionaires Carl Icahn and John Paulson, who have been urging the company to break-up into three separate companies that would focus on life, property-casualty and mortgage coverage insurance. The so-called de-conglomeration may enable AIG to avoid the systemically important financial institution (SIFI) designation, which is associated with high regulatory costs. In early February, AIG announced that its Board of Directors agreed to increase the size of the Board to 16 seats from 14, with John Paulson of Paulson & Co. and Samuel Merksamer, a Managing Director of Icahn Capital LP, being added to the Board. The insurer plans to reduce expenses by $1.6 billion through 2017, and has already taken steps to achieve this target; AIG recently announced plans to cut 242 jobs in five locations in New York City. AIG shares have plummeted by nearly 14% since the beginning of 2016 and it does not look like they are on track to recover in the foreseeable future. Nonetheless, the new AIG Board additions might serve as an additional catalyst for the company’s financial and stock performance in the short-term future. Icahn Capital LP owned 42.24 million shares of American International Group Inc. (NYSE:AIG) at the end of the previous year.

Disclosure: None