| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
Momentum stocks delivered exceptional returns across developed markets in 2025, with outperformance of 17 percentage points in the U.S. and 22 percentage points in non-U.S. developed markets. Since Liberation Day, leadership has become increasingly speculative, with meme stocks, SPACs, and unprofitable companies driving performance rather than fundamentals. This mirrors historical patterns where momentum cycles become detached from underlying business quality. The current environment shows elevated momentum readings, particularly in Europe at the 99th percentile, while emerging markets have shown more moderate momentum performance. Valuation spreads have widened significantly as capital flows toward speculative opportunities, leaving high-quality companies behind. Historical analysis demonstrates that extreme momentum periods have typically created attractive long-term opportunities for value-oriented investors. After such periods, cheap stocks have historically outperformed meaningfully over subsequent five years while expensive stocks struggled as expectations reset. The firm views the current backdrop as reinforcing the case for patience, selectivity, and emphasis on fundamentals as market dispersion creates opportunity for disciplined value investors.
Momentum has dominated global equity markets in 2025, but the increasingly speculative nature of leadership since Liberation Day, combined with widening valuation spreads, creates an opportunistic setup for patient value investors focused on fundamentals.
The current backdrop reinforces the case for patience and selectivity, with an emphasis on fundamentals as dispersion creates opportunity for value-oriented investors.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 15 2026 | 2025 Q4 | - | EAFE, emerging markets, global, momentum, Speculation, valuation, value | - | Momentum stocks delivered strong gains across developed markets in 2025, with outperformance of roughly 17 percentage points in U.S. and 22 percentage points in non-U.S.… |
| Oct 14 2025 | 2025 Q3 | 2579 JP, BAX, CHTR, LKQ, PFE, SCS, SHEKK NA, SPB, TEP FP, UHR SW, WIZZ LN | Artificial Intelligence, cyclicals, Global Equities, small caps, value |
BAX TPN SPB WIZZ |
Pzena argues that small caps trade at historic lows versus large caps and are poised for multi-year outperformance. The firm views AI-driven market dislocations as… |
| Jul 31 2025 | 2025 Q2 | - | diversification, fundamentals, Mean reversion, Patience, value | - | The letter reiterates a firm-wide commitment to disciplined value investing during a prolonged period of style headwinds. Management emphasizes patience, diversification across recovery paths, and… |
| Mar 31 2025 | 2025 Q1 | 005930 KS | - | - | - |
| Dec 31 2024 | 2024 Q4 | - | - | - | - |
| Oct 15 2024 | 2024 Q3 | - | - | - | - |
| Jul 22 2024 | 2024 Q2 | - | - | - | - |
| Apr 15 2024 | 2024 Q1 | - | - | - | - |
| Jan 25 2024 | 2023 Q4 | - | - | - | - |
| Oct 17 2023 | 2023 Q3 | - | - | - | - |
| Jul 13 2023 | 2023 Q2 | - | - | - | - |
| Sep 4 2023 | 2023 Q1 | ERIC, ING, NOK, RAND AV, RXL FP, SHEL | - | - | - |
| Jan 25 2023 | 2022 Q4 | - | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
Momentum2025 was characterized by extreme momentum dynamics with capital flowing into immediate winners while perceived losers saw unprecedented pressure. Market leadership concentrated in lower-quality, speculative, and cyclically sensitive stocks. The momentum trade has been exceptionally profitable short-term but timing the inevitable reversal remains challenging. |
Cyclical Speculation Leadership Volatility Reversal |
SPACsThe Fund operates three SPAC strategies: arbitrage, non-redemption agreements, and proprietary investments. SPAC IPO issuance was robust with 144 IPOs raising over $30bn in 2025, but transaction announcements lagged at only 65 deals. The supply-demand imbalance created attractive yields for the Fund while recent IPOs underperformed with 70% losing money net of financing costs. |
SPAC arbitrage Non-redemption agreements SPAC IPOs Transaction announcements Trust value | |
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 |
Global Diversification |
|
ValueThe manager sees excellent value opportunities globally, particularly in international and emerging markets despite strong recent performance. U.S. healthcare and consumer staples have been left behind by the AI frenzy and trade at appealing valuations. Portfolio companies show attractive price/earnings ratios with meaningful long-term return potential. |
Valuations Opportunities Healthcare Staples Returns | |
| 2025 Q2 |
ValueThe manager continues to find attractive value opportunities despite expensive markets, purchasing undervalued companies like Centene, GlaxoSmithKline, Carrefour and PayPal trading at low multiples with strong fundamentals. |
Undervalued Low Multiples Contrarian Opportunistic |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Oct 14, 2025 | Fund Letters | Daniel L. Babkes | SPB | Spectrum Brands Holdings Inc. | Consumer Staples | Consumer Products | Bull | NYSE | brands, consumer, Re-rating, tariffs, valuation | Login |
| Oct 14, 2025 | Fund Letters | Daniel L. Babkes | WIZZ | Wizz Air Holdings Plc | Industrials | Airlines | Bull | - | Airlines, Aviation, Engines, Europe, recovery | Login |
| Oct 14, 2025 | Fund Letters | Daniel L. Babkes | BAX | Baxter International Inc. | Health Care | Medical Instruments & Supplies | Bull | NYSE | Hospitals, Margins, Medical devices, recovery, turnaround, value investing | Login |
| Oct 14, 2025 | Fund Letters | Daniel L. Babkes | TPN | TELEPERFORMANCE SE | Financials | Professional Services | Bull | - | AI, Customer service, Outsourcing, turnaround, Value | Login |
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