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Third Point Joins Blue Ridge, Omega in Bets on AIG

Aug. 15 (Bloomberg) -- American International Group Inc. extended its streak of gains to the longest since March as John Griffin’s Blue Ridge Capital LLC and Daniel Loeb’s Third Point LLC disclosed stakes in the bailed-out insurer.

Blue Ridge added 10.4 million shares of New York-based AIG in the quarter ended June 30, according to a filing yesterday. Third Point had a new stake of 2.25 million shares, it said in a filing. Loeb’s fund had $8.9 billion under management as of July 31, according to its website.

AIG jumped 1.4 percent to $34.29 at 10:03 a.m. in New York, heading for its ninth straight daily advance since reporting a profit gain after the close of regular trading on Aug. 2. The U.S. Treasury sold $5.75 billion of AIG shares in May and an equal amount this month, cutting its stake to 53 percent. AIG trades for about 57 percent of book value, a measure of assets minus liabilities.

“The company is on a positive track, continuing to move forward in its turnaround,” Gloria Vogel, an analyst at Drexel Hamilton LLC, wrote in an Aug. 6 research note. “The repurchase of shares at a significant discount to book value helps to raise earnings” per share. She has a buy rating on AIG.

Leon Cooperman’s Omega Advisors Inc. tripled its AIG stake in the three months ended June 30 to 4.59 million shares, an Aug. 13 filing shows. Omega has earned an average of about 13 percent annually since it was founded in 1991, according to Chicago-based Hedge Fund Research Inc.

Bruce Berkowitz’s Fairholme Capital Management LLC is the largest owner of AIG shares after the U.S. government, with about 88 million, according to data compiled by Bloomberg.

“Our best idea remains AIG,” Berkowitz wrote in a letter to investors posted on his website. “There are few occasions when systemically important franchises sell for half of book value and are profitable. This is one of those times.”

AIG has rallied 48 percent this year, beating the 12 percent climb of the Standard & Poor’s 500 Index. The insurer dropped 52 percent in 2011.

To contact the reporters on this story: Zachary Tracer in New York at ztracer1@bloomberg.net;

To contact the editor responsible for this story: Dan Kraut at dkraut2@bloomberg.net

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