Noah Zivitz

Managing Editor, BNN Bloomberg

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Prem Watsa is often revered as one of Canada's most influential investors. He's even been called this country's Warren Buffett. And he has once again demonstrated his acumen.

Fairfax Financial Holdings Ltd., the company that Watsa leads as chairman and chief executive officer, reported US$1.14 billion in fourth-quarter pre-tax profit late Thursday. That was down from US$1.24 billion a year earlier.

While the company's core property and casualty insurance and reinsurance business saw its profit almost double to US$625.8 million, it was Fairfax's investing activities that provided the lion's share of earnings.

It reported a $938.3-million net gain on its investments in the quarter. About a third of that came from equities, and the balance came from other investments. For the full year, Fairfax recorded US$3.45 billion in net gains on investments, compared to just US$313.1 million in 2020.

“This is what you get with a company like Fairfax, or Onex, or Brookfield. You are kind of at the whim of the portfolio manager. So, in this case, Prem Watsa,” said Ryan Bushell, president and portfolio manager at Newhaven Asset Management, in an interview Friday. He noted that markets haven’t also moved in Watsa’s favour, however – most notably with a significant investment in BlackBerry Ltd.  

Watsa also found opportunity in his own backyard last year. In December, after he called his own company's shares "ridiculously cheap," Fairfax spent US$1 billion on a share buyback.

Separately, Fairfax announced on Thursday that Peter Clarke, a long-time executive at the company, was named president.

"In many ways, Peter has been the president of Fairfax for some time now; it just took us a while to realize it. There is no one who represents Fairfax culture any better – smart, hard-working with no ego! I look forward to continuing to work very closely with Peter," Watsa said in a release.