About charlesfernandez

Charles M. Fernandez, who most recently served as President of Fairholme Capital Management, L.L.C., and Vice President and Director of Fairholme Funds, Inc., possesses a strong record in corporate growth and restructuring. Immediately after graduating from Florida International University in 1985 with a Bachelor of Business Administration in Finance and International Business, Mr. Fernandez took a Miami-based radio company out of bankruptcy and transformed it into a $23 million concern in just four years. In 1989, Charles M. Fernandez saw his first venture, Viva Broadcasting Corporation, through a merger with Heftel Broadcasting Corporation, whose headquarters are located in Los Angeles, to become Executive Vice President, Chief Operating Officer, and Director at Heftel. In addition to supervising day-to-day operations at Heftel, Charles M. Fernandez managed the purchase of six other radio companies in just over seven years, maintaining Heftel’s position as the eighth largest in the nation. Following his tenure with Heftel, he joined Dr. Frost, where he became involved in Ivax Corporation and cofounded Continucare Corporation and was involved in various other companies controlled by Dr. Frost. Continucare is a publicly traded company headquartered in Miami that is dedicated to outpatient care services throughout Florida. The company’s affiliated doctors and nurse practitioners provided services to more than 50,000 at-risk patients. Charles M. Fernandez acted as Chief Executive Officer, President, and Chair for Continucare until 1999, when he joined New York-based Big City Radio, Inc., as President and CEO. Charles M. Fernandez also took the reins at Ivax Corporation in 1996 as a Director and shareholder. Mr. Fernandez advised the Chairman and CEO of Ivax, the nation’s biggest generic pharmaceutical firm, through numerous mergers and acquisitions, which resulted in a more than 20-fold increase in the company’s value. Ivax also appointed him Chairman of its Audit Committee. Charles M. Fernandez currently serves as a Director of Miami Children’s Hospital Foundation.

Income Funds Charles M. Fernandez

Unlike capital appreciation funds which multiply capital, income funds promise a sustained monthly return during the investment period. They are typically used by well-known funds such as Fairholme Fund to minimize risk through conservative investments in low-risk bonds and funds such as government debt or safe equities. Thus, the proportion of risk-based investments is much less as compared to traditional capital appreciation funds.

This does not mean that income funds are immune to a stock market’s vagaries. Just like any other investing instrument, returns from income funds are inversely proportionally to interest rates. However, unlike riskier funds, the fallout from an income fund’s risky investments is much less because the amount invested in risk is proportionally smaller.

There are several types of income funds. For example, fixed-income funds invest in securities and equities that work within predetermined parameters. Similarly, bond funds invest in bond offerings by government or corporate entities. Typically, government bond funds tend to invest in investment-grade bonds that have been rated favorably by credit agencies. However, corporate income funds have much more flexibility in making riskier investments. Thus, there might be cases of corporate income funds investing in bonds that have been classified as junk by credit rating agencies or of making high-risk betting plays. Some income funds such as real estate funds can be especially advantageous for tax purposes. This is because they can benefit from deferred tax provisions for sale of real estate properties in their portfolio.

About the author
Charles M. Fernandez is an experienced finance professional who served as President of the Miami-based Fairholme Fund.

Charles M. Fernandez Featured in Outstanding Investor Digest About Fairholme Capital Management (Part Two)

Speaking with Outstanding Investor Digest in 2009, former Fairholme Capital Management President Charles M. Fernandez detailed his shareholder revenue–focused investment, acquisition, and restructuring approach. In particular, Charles M. Fernandez emphasized the need to undertake detailed research and analysis in every transaction undertaken.

The reason for this intense M&A scrutiny is that business acquisitions not only need to generate significant revenue to pay off debts, but also need to cover debt incurred during the acquisition process itself. Any major M&A process naturally requires extensive (and expensive) coordination with attorneys, regulators, lobbyists, and other stakeholders. In the pharmaceutical sector, Mr. Fernandez described a complex and time-consuming process of collaborating with leading Washington, D.C., lawyers experienced in lobbying Congress on behalf of the top pharmaceutical companies. He also typically hired consultants with detailed regulatory and law enforcement experience. These experts helped him to understand complex issues regarding government agency investigations, as well as relevant legal issues.

Charles M. Fernandez’s detail-oriented approach has paid dividends, with a sustained M&A strategy with Ivax Corporation over a seven-year period, transforming a small generics company into a major $10 billion international operation.