| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 9.7% | 2.0% | 6.4% |
| 2025 |
|---|
| 7.6% |
Southeastern's Small-Cap Fund returned 7.56% in 2025, underperforming benchmarks as the market favored lower quality, unprofitable companies that rallied 70%+ versus the fund's quality holdings. The fund maintained disciplined value approach with P/V ratios in low-60s% and 15.8% cash position. Key contributors included Becle (tequila manufacturer), GCI Liberty (Alaskan telecom), Graham Holdings (diversified conglomerate), and Mattel (toy company). Detractors included Boston Beer (alcohol headwinds), Clearwater Paper (packaging oversupply), and New York real estate holdings Empire State Realty and Alexander's (political concerns). The manager emphasizes current portfolio resilience with holdings significantly less leveraged than in 2007 and 2021, as evidenced by bond spreads at roughly half historical crisis levels. Portfolio activity included seven new purchases and eight exits. Looking forward, the manager expects lower quality rallies to revert, benefiting quality-focused strategies, while maintaining cash for deployment opportunities as market multiples remain elevated from early 2025 levels.
Southeastern focuses on undervalued, quality small-cap companies with strong balance sheets and aligned management partners, maintaining disciplined approach during market environment favoring lower quality, unprofitable stocks while positioning for inevitable reversion.
Manager expresses confidence in portfolio positioning with holdings much less leveraged than in 2007 and 2021, as evidenced by bond spreads roughly half the levels of those periods. Expects to continue Research Perspectives notes and increase P/V Podcast frequency in 2026. Emphasizes virtue in owning real companies on offense during times of excessive speculation, expecting understandable, durable, FCF generating assets run by great partners to win when tide goes out and current fads disappoint.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 14 2026 | 2025 Q4 | ALX, CLW, CNX, CUERVO.MX, ESRT, GHC, GLIBA, GRUMA.MX, MAT, PCH, RYN, SAM, SHEN, TRIP, WTM | Alcohol, Media, real estate, small cap, Telecommunications, undervalued, value |
GLIBA GHC MAT OSCR SAM CLW ESRT ALX PK |
Fund focuses on undervalued companies trading below intrinsic value with P/V ratios in low-60s%. Manager emphasizes buying quality companies at discounted prices when market favors… |
| Oct 15 2025 | 2025 Q3 | CLW, CNX, CUERVO* MM, GHC, GRUMAB MM, MAT, OSCR, PCH, RYN, TRIP, WTM | Compounding, free cash flow, Share repurchase, small caps, Value Investing |
CNX US WFG US MAT US TRIP US |
Longleafs Small-Cap Fund focuses on undervalued, high-quality small-cap franchises generating strong free cash flow. The team notes speculative excess in unprofitable small caps but remains… |
| Jul 22 2025 | 2025 Q2 | BATRA, CUERVO* MM, OSCR, PCH, SAM, WEST | Balance Sheets, mispricing, small caps, value creation, volatility |
OSCR CUERVO MM BATRA WEST SAM PCH |
The letter emphasizes small-cap investing as a fertile area for mispricing due to neglect and volatility. Management highlights stock-specific value creation, aligned owners, and balance… |
| Apr 12 2025 | 2025 Q1 | GHC, GMKKY, PHC, PK, SAM | - | - | - |
| Jan 16 2025 | 2024 Q4 | 3G3B GR, CNX, GHC, KODK, LLYVA, OSCR, WEST | - | - | - |
| Oct 16 2024 | 2024 Q3 | CNX, HOUS, OSCR, WEST | - | - | - |
| Jul 23 2024 | 2024 Q2 | HOUS, KODK, MAT, OSCR, PCH | - | - | - |
| May 7 2024 | 2024 Q1 | CNX, HOUS, OSCR, WTM | - | - | - |
| Jan 17 2024 | 2023 Q4 | 3G3B GR, ESRT, H, KNF, LUMEN SS, MAT, OSCR, WEST | - | - | - |
| Dec 10 2023 | 2023 Q3 | CNX, MAT, OSCR, SAM, WEST | - | - | - |
| Jul 19 2023 | 2023 Q2 | BATRA, HOUS, LXS AV, OSCR | - | - | - |
| Apr 20 2023 | 2023 Q1 | H, LUMEN, OSCR | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
AlcoholDiageo exemplifies brands crystallizing into cornered resources through production realities competitors cannot accelerate, including long-dated aging inventories and protected geographic distribution areas. Recent demand has softened following Covid-led surge, particularly in South America, requiring cost discipline under new leadership. |
Brands Production Geographic Demand Leadership |
MediaWarner Bros Discovery was the top contributor as multiple parties submitted acquisition offers, with Netflix acquiring the Streaming and Studios business while Global Networks spins to shareholders. Paramount Skydance made a $30 per share offer for the entire company, creating a bidding war that unlocked shareholder value. |
Streaming M&A Content Entertainment Bidding | |
Real EstateFund holds significant positions in Australian real estate companies including Lendlease, Lifestyle Communities, and Ingenia Communities. These companies are executing simplification strategies, capital recycling, and benefiting from structural tailwinds including aging population and housing undersupply. The fund sees meaningful upside through improved capital allocation and strategic execution. |
Development Capital Recycling Buybacks NTA Discount Demographics | |
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 |
Small CapsThe fund invests in a portfolio of competitively advantaged small and medium-sized businesses, which remained out of favor for most of the quarter. The strategy of owning leading small-cap businesses has been the foundation since inception, delivering 354 basis points of annual outperformance over the benchmark since inception despite recent headwinds. |
Growth Outperformance Benchmark Russell Businesses |
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 | |
| 2025 Q2 |
SmallCaps |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Oct 15, 2025 | Fund Letters | Ross Glotzbach | WFG US | White Mountains Insurance Group, Ltd. | Materials | Insurance | Bull | NYSE | capital allocation, growth, Insurance, M&A, management, Value | Login |
| Jan 14, 2026 | Fund Letters | Ross Glotzbach | ALX | Alexander’s, Inc. | Real Estate | Retail REIT | Bull | New York Stock Exchange | Assetvalue, Leasing, Office, realestate, valuation | Login |
| Oct 15, 2025 | Fund Letters | Ross Glotzbach | MAT US | Mattel, Inc. | Consumer Discretionary | Toys & Games | Bull | NASDAQ | buybacks, growth, Ip, media, tariffs, Toys, valuation | Login |
| Jan 14, 2026 | Fund Letters | Ross Glotzbach | PK | Park Hotels & Resorts Inc. | Real Estate | Hotel & Resort REIT | Bear | New York Stock Exchange | Assetsales, Hotels, Leisure, Macro, Travel | Login |
| Oct 15, 2025 | Fund Letters | Ross Glotzbach | TRIP US | TripAdvisor, Inc. | Consumer Discretionary | Interactive Media & Services | Bull | NASDAQ | Activism, buybacks, growth, Online, recovery, Travel, valuation | Login |
| Jul 22, 2025 | Fund Letters | Ross Glotzbach | OSCR | Oscar Health, Inc. | Health Care | Managed Health Care | Bull | New York Stock Exchange | Balance_Sheet, Healthinsurance, Insurtech, Regulation, underwriting | Login |
| Jul 22, 2025 | Fund Letters | Ross Glotzbach | CUERVO MM | Becle, S.A.B. de C.V. | Consumer Staples | Distillers & Vintners | Bull | New York Stock Exchange | brands, Family_Ownership, Spirits, tequila, valuation | Login |
| Jul 22, 2025 | Fund Letters | Ross Glotzbach | BATRA | Atlanta Braves Holdings, Inc. | Communication Services | Entertainment | Bull | NASDAQ | — | Login |
| Jul 22, 2025 | Fund Letters | Ross Glotzbach | WEST | Westrock Coffee Company | Consumer Staples | Food & Beverage Processing | Bull | NASDAQ | Capacity, cashflow, Coffee, Execution, Insider_Buying | Login |
| Jul 22, 2025 | Fund Letters | Ross Glotzbach | SAM | Boston Beer Company, Inc. | Consumer Staples | Brewers | Bull | New York Stock Exchange | Balance_Sheet, Beer, brands, buybacks, Margins | Login |
| Jul 22, 2025 | Fund Letters | Ross Glotzbach | PCH | PotlatchDeltic Corporation | Real Estate | Timber REITs | Bull | NASDAQ | Asset_Value, dividends, Housing, realestate, Timber | Login |
| Jan 14, 2026 | Fund Letters | Ross Glotzbach | GLIBA | GCI Liberty, Inc. | Communication Services | Wireless Telecommunication Services | Bull | NASDAQ | broadband, Freecashflow, Scarcity, Spin, Telecom | Login |
| Jan 14, 2026 | Fund Letters | Ross Glotzbach | GHC | Graham Holdings Company | Consumer Discretionary | Education Services | Bull | New York Stock Exchange | Balancesheet, conglomerate, Education, healthcare, media | Login |
| Jan 14, 2026 | Fund Letters | Ross Glotzbach | MAT | Mattel, Inc. | Consumer Discretionary | Leisure Products | Bull | NASDAQ | brands, buybacks, Intellectualproperty, Margins, Toys | Login |
| Jan 14, 2026 | Fund Letters | Ross Glotzbach | OSCR | Oscar Health, Inc. | Health Care | Managed Health Care | Bull | New York Stock Exchange | Healthinsurance, Membership, Regulation, valuation | Login |
| Jan 14, 2026 | Fund Letters | Ross Glotzbach | SAM | Boston Beer Company, Inc. | Consumer Staples | Brewers | Bear | New York Stock Exchange | Alcohol, Beverages, buybacks, innovation, Pricing | Login |
| Jan 14, 2026 | Fund Letters | Ross Glotzbach | CLW | Clearwater Paper Corporation | Materials | Paper & Forest Products | Bull | New York Stock Exchange | buybacks, Cyclicality, Freecashflow, Packaging, valuation | Login |
| Oct 15, 2025 | Fund Letters | Ross Glotzbach | CNX US | CNX Resources Corp. | Energy | Oil & Gas Exploration & Production | Bull | NYSE | buybacks, energy, FCF, Gas, growth, management, valuation | Login |
| Jan 14, 2026 | Fund Letters | Ross Glotzbach | ESRT | Empire State Realty Trust, Inc. | Real Estate | Office REIT | Bull | New York Stock Exchange | Assetsales, Leasing, Office, realestate, valuation | Login |
| TICKER | COMMENTARY |
|---|---|
| ALX | In the fourth quarter of 2024, we were trimming our position in New York real estate company ESRT, as it had been a strong performer and the P/V gap had closed. This year, both ESRT and its peer Alexander's (which was a new position in 2025) faced stock market headwinds as New York real estate sentiment shifted. We have added to both at great prices. It is an interesting dynamic where the on-the-ground results are stronger than the headlines, with region-wide leasing trends far outpacing weak stock price performance. The stock market worries about Mayor Mamdani, but that fear is now in the stock prices, plus it remains to be seen how truly business-unfriendly his administration will be. New York real estate has made it through a lot (the city going broke in the 1970s, 9/11, COVID, etc.) historically. These two stocks traded at or above our appraisals during the not-great de Blasio administration and are uniquely undervalued vs. peers today. Both of our holdings are on offense with multiple ways to grow value per share and a willingness to sell assets into a more attractively priced private market. |
| CLW | Packaging company Clearwater Paper was a detractor for the year. We bought shares of Clearwater in April. The stock has since sold off as the already weak solid bleached sulfate (SBS) paperboard market showed few signs of improving. The market has been depressed and below mid-cycle due to oversupply problems that were exacerbated by a competitor conversion earlier this year. Clearwater continues to operate well what it can control, as evidenced by meeting synergy targets from a large and opportunistic acquisition completed last year. The clearest way the oversupply problem will be fixed is through capacity closures, but help is also coming in the form of tariffs on competing European capacity, as well as a weaker dollar that makes these imports less appealing. Management has a strong capital allocation track record and recently decided to focus on share repurchase after running an analysis on a high return but time-consuming project. We agree with this decision as the business trades at a low single-digit multiple of growing mid-cycle FCF. |
| CNX | CNX Resources Corporation was our top contributor for the quarter. Natural gas prices rose into the end of the quarter. The gain was largely weather-driven and with $5/mcf levels viewed as unsustainable in our long-term projections—CNX benefited in the short-term from a favorable near-term pricing backdrop. At the same time, the company continued to execute consistently, delivering on production targets, generating strong free cash flow, and returning capital through a disciplined and accretive share repurchase program, which together supported multiple expansion. |
| CUERVO.MX | Leading manufacturer of tequila and whiskeys Becle contributed this year. The company was severely undervalued in the first quarter when we took advantage of a share price dislocation to purchase during peak US/Mexico tariff uncertainty. The company has strong brands that we know well having previously owned the company in our non-US strategy, even though most of the value now comes from the US despite the company's Mexican listing. Becle's current undervaluation is further complicated by the market's cautious outlook on the alcohol industry, which has continued throughout the year (and led to us adding to the position in the second half of the year). The company has aligned partners in the Beckmann family, and owning roughly 30% of the growing, global tequila market with 200+ year old brands at 10x or less FCF power positions us well for the long-term. |
| ESRT | In the fourth quarter of 2024, we were trimming our position in New York real estate company ESRT, as it had been a strong performer and the P/V gap had closed. This year, both ESRT and its peer Alexander's (which was a new position in 2025) faced stock market headwinds as New York real estate sentiment shifted. We have added to both at great prices. It is an interesting dynamic where the on-the-ground results are stronger than the headlines, with region-wide leasing trends far outpacing weak stock price performance. The stock market worries about Mayor Mamdani, but that fear is now in the stock prices, plus it remains to be seen how truly business-unfriendly his administration will be. New York real estate has made it through a lot (the city going broke in the 1970s, 9/11, COVID, etc.) historically. These two stocks traded at or above our appraisals during the not-great de Blasio administration and are uniquely undervalued vs. peers today. Both of our holdings are on offense with multiple ways to grow value per share and a willingness to sell assets into a more attractively priced private market. |
| GHC | Diversified conglomerate GHC performed strongly throughout the year. The company's Kaplan education segment has multiple subparts that are finally back to growth in aggregate after a multi-year turnaround has borne fruit. It is encouraging that broadcast television M&A has increased this year, which could give GHC a unique opportunity to grow and realize its value in this segment. The healthcare segment continued its strong growth and looks to be navigating a leadership change well. Overall, GHC remains on offense with its strong net cash balance sheet and overfunded pension. |
| GLIBA | 95 percent of GLIBA right holders exercised their basic rights, and therefore our overallocation was relatively modest. The rights offering increased our weighting to the name at a highly attractive price that allows considerable upside to GLIBA's Alaska cable properties alone. At Liberty Media's analyst day this past November, Dr. Malone sounded bullish on GLIBA and expressed confidence that this company could evolve into the next Liberty Media vehicle. GLIBA has likely identified a couple of targets, but it is a crapshoot on when any acquisition closes. |
| MAT | Children's toy, media, and consumer products creator Mattel was a contributor for the quarter and the year. The company is in its strongest position in over 10 years, and there are multiple ways to win. Over 80% of Mattel's value comes from growing power brands like Hot Wheels, Barbie, and UNO. Mattel has a strong balance sheet which allowed material stock repurchases of $600 million in 2025, and we believe additional share repurchase will come at these discounted prices in 2026. |
| RYN | Rayonier, one of the largest owners of timberlands in the U.S. completing the divestiture of its New Zealand venture, paying a special dividend, and announcing a merger with industry peer PotlatchDeltic. Once completed, the combined company will benefit from additional efficiencies within its timber segment, in Fund Management's opinion, as well as more scale in its real estate and resources portfolio that includes substantial sub-surface rights in the Smackover Formation. |
| SAM | Alcoholic beverage company Boston Beer was a detractor for the year as alcohol consumption faced headwinds. Volume declines at Twisted Tea, the company's largest brand, weighed on the stock. Twisted's pricing had gotten a little overextended, but the company is actively working to fix this problem and has also successfully fended off numerous competitors that entered the hard tea space over the last few years. Additionally, Truly is still having difficulty returning to growth after multiple difficult years but is now a much smaller part of the company. Boston Beer has continually proven itself as one of the best innovators in the industry, as shown again by its new and successful vodka-based product Sun Cruiser, which is in the process of a national rollout and will be key to getting the company back to growth. We have been pleased by the speed at which management has corrected margin problems that arose in the aftermath of the hard seltzer boom, and we still believe there is further room for improvement. Founder Jim Koch stepped back into the CEO seat in August for the first time in almost 25 years after former CEO Michael Spillane stepped down. The company still has a net cash position and is one of our largest share repurchasers. We think repurchase is a great use of capital for a consumer packaged goods company with quality brands that trades at 1x revenue, all at a time that it could be an acquisition target amidst industry consolidation. |
| WTM | WTM was a top performer after announcing the sale of a controlling stake in its retail brokerage platform, Bamboo, generating a roughly 4x return in just two years. The transaction, alongside a concurrent share buyback, drove a meaningful increase in book value per share and reinforced confidence in management's disciplined capital allocation and ability to compound shareholder capital. |
| Ticker | Put/Call | Amount Bought | Shares Bought | % Change | Weight % |
|---|---|---|---|---|---|
| No Recent Buys Data | |||||
| Ticker | Put/Call | Amount Sold | Shares Sold | % Change | Weight % | Status |
|---|---|---|---|---|---|---|
| No Recent Sells Data | ||||||
| Industry | Prev Quarter % | Current Quarter % | Change |
|---|---|---|---|
| No industry data available | |||
