Mutual-fund manager Fairholme Capital, the largest private-sector shareholder in American International Group Inc., said it had increased its stake in the insurer.
Run by Bruce Berkowitz, Fairholme now holds 39.99 million shares, or 29% of the stock that isn't owned by the U.S. government. That is up from the 38.26 million shareholding disclosed in a filing with securities regulators on Nov. 1.
The 39.99 million shares are valued at about $1.7 billion, based on Thursday's closing price of $42.56. AIG shares have jumped about 42% this year.
Mr. Berkowitz began to amass his stake early this year when it became clear to him that AIG would repay its government bailout. In October, the company announced a road map that, if completed as planned, would enable it to repay the U.S.
The government exit plan will be highly dilutive to existing common shareholders such as Mr. Berkowitz. The U.S. Treasury will have 1.66 billion AIG common shares after it converts its preferred shares to common as part of its exit.