| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | 7.2% | 33.5% |
| 2025 |
|---|
| 33.5% |
Hosking Partners delivered exceptional performance in Q4 2025 with 7.2% net returns versus 3.3% for the MSCI All Country World Index, culminating in a stellar 33.5% annual return versus 22.3% for the benchmark. The diversified, contrarian strategy benefited from underweighting expensive US technology stocks while overweighting unfashionable destinations including emerging markets, Japan, and the United Kingdom. Key contributors included metals and mining positions, particularly South African platinum group metals with Sibanye Stillwater up 360% and Impala Platinum up 243% for the year. The strategy maintained significant overweights in financials and materials while holding just 8% in information technology versus 27% benchmark exposure. Looking forward, the manager expresses increasing confidence in a growth versus value inflection point driven by AI capital intensity requirements. With valuation spreads reaching extreme levels and technology leaders facing $5.2 trillion in physical asset investments, the team believes mean reversion opportunities will drive multi-year outperformance for their capital cycle approach.
Hosking Partners employs a diversified, contrarian capital cycle approach that capitalizes on mean reversion opportunities across undervalued geographies and sectors, particularly emerging markets, Japan, and value-oriented sectors like metals and mining, while maintaining strategic underweights to expensive US technology stocks.
The manager expresses increasing confidence in a growth versus value inflection point driven by AI capital intensity requirements. After a decade of growth dominance creating extended valuation spreads, mean reversion is expected to be a multi-year process. The team believes this represents an inflection point favoring diversified capital cycle strategies, with 2025 potentially being the first of many years of outperformance.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 19 2026 | 2025 Q4 | 000660.KS, 005930.KS, 055550.KS, AA, AAPL, BARC.L, C, FCX, HCC, IMPUY, MSFT, MU, SBSW, STX, SYF, TIGO | AI, contrarian, emerging markets, Japan, Mining, Platinum, technology, value | - | The strategy maintains a contrarian value approach, betting on mean reversion after a decade of growth dominance. Valuation spreads have reached extreme levels with enterprise… |
| Oct 17 2025 | 2025 Q3 | BABA, SAGA LN | AI, commodities, Copper, Mining, Platinum |
FCX US SAGA LN |
Hosking Partners emphasizes a broadening global equity market, favoring value opportunities in underinvested sectors like mining, metals, and energy. It contrasts speculative excess in U.S.… |
| Jul 17 2025 | 2025 Q2 | - | Capital Cycle, diversification, duration, Patience, valuation | - | The letter stresses long-duration investing as a competitive advantage in an environment dominated by short-term momentum. A globally diversified, idiosyncratic portfolio is positioned to benefit… |
| Apr 15 2025 | 2025 Q1 | - | - | - | - |
| Feb 3 2025 | 2024 Q4 | PDL LN | - | - | - |
| Nov 11 2024 | 2024 Q3 | ASC LN, BAB LN, CX | - | - | - |
| Jul 9 2024 | 2024 Q2 | AAL LN, AAPL, NVDA | - | - | - |
| May 31 2024 | 2024 Q1 | - | - | - | - |
| Feb 13 2024 | 2023 Q4 | 5021 JP, ARR CN, MSFT, TPL | - | - | - |
| Sep 30 2023 | 2023 Q3 | - | - | - | - |
| Jun 30 2023 | 2023 Q2 | - | - | - | - |
| May 29 2023 | 2023 Q1 | - | - | - | - |
| Jan 29 2023 | 2022 Q4 | - | - | - | - |
| Sep 30 2022 | 2022 Q3 | - | - | - | - |
| Jan 7 2022 | 2022 Q2 | - | - | - | - |
| Mar 30 2022 | 2022 Q1 | - | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
AIAI has been integrated into RGA's research process through tools like NotebookLM, Gems in Gemini, and Claude Code. The firm views AI as a force multiplier for human judgment rather than a replacement, emphasizing the Kasparov Law principle. They believe the market narrative around AI displacement is swinging to unhelpful extremes, creating investment opportunities. |
Machine Learning Automation Software Productivity Innovation |
JapanJapan offers tremendous value opportunities with one-third of companies trading below book value. Corporate governance reforms, record shareholder returns, and structural changes like unwinding cross-holdings are unlocking value. The investment opportunity is in early innings and could last several years. |
Corporate Governance Value Reforms Shareholder Returns Cross Holdings | |
Platinum Group MetalsRhodium is particularly well-suited for hybrid vehicles requiring catalysts at lower operating temperatures. The US has classified rhodium as a critical mineral with $64.3 billion potential GDP impact, yet prices trade 150% below 2022 levels despite recovery momentum. |
Rhodium Hybrid Vehicles Critical Minerals Catalysts PGM | |
ValueManager emphasizes investing in controlled companies trading at significant discounts to NAV, with European holding companies showing discounts of 30-68%. The strategy focuses on securities mispricing where real value exists, contrasting with overvalued technology stocks. |
Discounts NAV Mispricing Undervalued Controlled | |
| 2025 Q3 |
AIAI has been integrated into RGA's research process through tools like NotebookLM, Gems in Gemini, and Claude Code. The firm views AI as a force multiplier for human judgment rather than a replacement, emphasizing the Kasparov Law principle. They believe the market narrative around AI displacement is swinging to unhelpful extremes, creating investment opportunities. |
Machine Learning Automation Software Productivity Innovation |
CommoditiesBull market may be in early stages with most commodities 46% below nominal peaks and 73% below inflation-adjusted highs. Commodity-to-equity ratio near historic lows suggests capital starvation. Current cycle appears only one-third complete compared to historical precedent. |
Cycles Capital Valuation Equities | |
| 2025 Q2 |
Duration |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Oct 17, 2025 | Fund Letters | Steve Chambers | FCX US | Freeport-McMoRan Inc. | Materials | Copper Mining | Bull | NYSE | AI, cash flow, Copper, Electrification, infrastructure, Mining, valuation | Login |
| Oct 17, 2025 | Fund Letters | Steve Chambers | SAGA LN | Saga plc | Financials | Travel & Leisure | Bull | NYSE | Demographics, growth, Insurance, Travel, turnaround, UK, valuation | Login |
| TICKER | COMMENTARY |
|---|---|
| 000660.KS | SK Hynix has solidified its leadership in high-bandwidth memory (HBM), emerging as the exclusive HBM supplier for Microsoft's in-house AI accelerator and securing roughly two-thirds of NVIDIA's anticipated HBM4 demand for its next-generation platforms at meaningfully higher price points and margins than prior generations. |
| 005930.KS | Top gainers included Samsung (+38% in U.S. dollar terms) |
| 055550.KS | Shinhan Financial Group (+71%) for the year, contributing to strong results in Korea |
| AA | Alcoa (+62%) in Q4 |
| AAPL | Apple Inc. represents 1.6% of company owned with cost basis of $6,255 million and market value of $61,962 million, providing $280 million in 2025 dividends. |
| BARC.L | Our bank holdings have been outstanding performers throughout the year, and even at their current valuations, we believe they continue to look attractive. |
| C | Money center bank Citigroup rose amid strong capital markets activity and benign credit conditions. The company continued to repurchase stock and return capital to shareholders, while expenses related to its transformation are expected to decline next year. |
| FCX | Freeport McMoRan was able to recover the share price drawdown seen in September following a major mudflow event at their Grasberg mine, which resulted in a full suspension of production and a material cut to guidance. The share price finished 2025 at its high. |
| HCC | Warrior Met Coal is a leading metallurgical coal producer (coal used to steel production). There has been minimal worldwide met coal resource development over the last 10 years which could lead to tight supply (higher pricing) when steel production improves. Currently the bulk of HCC's FCF is being invested in a capital project that will be largely concluded in 2025 and is ahead of schedule. Once the business winds down their investment period they will gush cash. HCC's existing mines should generate $100-$350MM in annual free cash flow. Blue Creek development is wrapping up by the beginning of 2026 and at mid-cycle should generate $200-$500MM in additional free cash flow. The combined assets should generate $300MM-$850MM in free cashflow with non-heroic pricing and volume assumptions. This equates to ~$6-$16 in annual per share cash generation vs. a price of ~$88 or a 7-18% unlevered annual free-cashflow yield. 2026 should be a sea-change in their free-cash-flow generation. |
| IMPUY | Impala Platinum (24%) in Q4 and (+243%) for the year, with platinum exposures performing well |
| MSFT | MSFT was a detractor in 4Q25 following its fiscal first-quarter 2026 earnings report released on October 29. While results were better than expected operationally, investor reaction was driven by guidance and capital expenditure intensity rather than headline performance. Revenue grew 17% year-over-year, exceeding consensus expectations, and Azure revenue increased 39% year-over-year, also ahead of estimates. However, management guided to a sequential deceleration in Azure growth in fiscal Q2, signaling some moderation after a period of exceptional demand. |
| MU | Core gains were led by investments in the Technology sector including Micron |
| SBSW | Sibanye Stillwater (+28%) in Q4 and (+360%) for the year, with platinum exposures performing well |
| STX | Some of our top performing closed positions: STX 53% |
| SYF | Synchrony (+18%) in Q4, benefiting from the financials overweight |
| TIGO | Latin American telecommunications operator Millicom was a contributor for the year. The company extended its strong 2024 performance through 2025, with the share price tracking operational delivery and the visible inflection in equity FCF we flagged in prior letters. This was driven by a focused new management team and an aligned majority shareholder partner in Iliad Group (Atlas). The business exceeded its already twice-raised 2024 FCF guidance and guided to material further growth in 2025, while reaching its 2.5x leverage target and increasing dividends and buybacks. The discount to our appraisal narrowed with this positive performance and solid Colombian M&A news. What was an attractive outlier at a double-digit dividend yield earlier in the year has now aligned with peers at mid-single-digit levels. With the value gap largely closed and limited upside remaining on a risk-adjusted basis, portfolio discipline dictated our exit in the third quarter. |
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