Top fund manager Bruce Berkowitz is once again showing his go-against-the-crowd streak, recently snatching up shares of two of the financial crisis’ biggest whipping boys, Citigroup and AIG.

In an interview with Fortune, Berkowitz says that Citigroup’s balance sheet is slowly improving, its capital ratios are higher than they’ve been in years, and its shares are cheap. “People are so focused on the liabilities that they’ve potentially forgotten about some of the assets,” he says. “The price is right. It’s just a question of when it becomes obvious to everyone that the worst is over.”

Berkowitz also says the government’s decision to allow Citigroup to pay back TARP funds is key. “The only way the government was going to allow repayment was if they thought the bank was recapitalized,” he says. “It’s unclear to me how much our shareholders are going to make [on Citigroup’s shares],” he adds, “but it’s becoming quite clear to me they’re not going to lose.”

As for AIG, Berkowitz tells Bloomberg that his Fairholme fund has bought more than 13 million shares of the insurer’s stock, as well as hundreds of millions of dollars of its debt.

Fairholme started investing in AIG in the second half of 2009, Bloomberg reports, when Berkowitz says its cash flows turned positive. “It is still a good company with a good global brand,” he said.

Berkowitz said it will take some time for AIG to fully recovery, and that he expects to be a long-term shareholder.