| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 9.1% | 4.5% | 13.7% |
| 2025 |
|---|
| 14.0% |
The Third Avenue Small-Cap Value Fund returned 4.62% in Q4 2025 and 14.04% for the full year, outperforming the MSCI USA Small Cap Value Index. The fund pursues a value-oriented approach focused on owner-operator companies where management teams demonstrate strong alignment with minority shareholders. Top performers included Kaiser Aluminum, which benefited from strong results and capacity expansion progress, and Collegium Pharmaceutical, which delivered record revenue and improved guidance. The fund initiated a position in Flagstar Bank at a discount to book value, viewing the regional bank as having a credible path to normalized profitability after significant transformation. The managers emphasize evaluating control parties as operators, investors, and financiers, seeking companies with governance structures that prioritize long-term shareholder value creation. Key risks include housing market slowdowns affecting certain holdings and regulatory changes in New York affecting Flagstar. The fund ended the quarter with 5.2% cash and managers express optimism for continued progress in 2026.
The Fund pursues a value-oriented investment approach focused on identifying owner-operator companies where management teams act as long-term stewards of shareholder capital, seeking to underpay for ownership of businesses with strong alignment of interests between management and minority shareholders.
As we reflect upon 2025, we are reasonably pleased with the Fund's returns and are encouraged by the operational performance and shareholder value creation of many of the Fund's holdings. We are optimistic for more progress in 2026.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 22 2026 | 2025 Q4 | ALG, BATRK, BXC, COLL, CTAS, ECPG, FPH, ICFI, KALU, LXU, MYRG, NYCB, OCSL, PB, PRA, SEB, SUPN, UMBF, UNF | Aluminum, Governance, Owner-Operator, Pharmaceuticals, Regional Banks, small caps, value |
KALU COLL ECPG UNF FLG |
The Fund pursues a decidedly value-oriented investment approach, seeking to underpay for ownership of a business. The managers focus on finding rare nexuses of good people, good assets and good prices. The Fund initiated a new position in Flagstar Bank at a large discount to tangible book value. Flagstar has been undergoing transformation and has a credible path to achieve profitability more typical of a U.S. regional bank. Kaiser Aluminum led fourth quarter performance following strong quarterly financial results and progress on its multi-year investment to upgrade and expand production capacity in aerospace and packaging. Collegium Pharmaceutical generated strong performance contribution after producing record quarterly revenue and disclosing improved operating income guidance and a new share repurchase authorization. |
| Oct 21 2025 | 2025 Q3 | AMBC, BCC, ROG | Balance Sheet Strength, Insurance Distribution, Resource Conversion, small caps, Transformation |
AMBC AMBC BOISE ROG |
The fund targets small-cap companies undergoing metamorphosis structural change or resource conversion events such as Ambacs sale of its legacy business and shift into insurance distribution. It favors companies with strong balance sheets, self-help catalysts, and strategic flexibility that can drive long-term value creation independent of market cycles. The approach reflects Third Avenues preference for owning businesses in transition with multiple levers for value realization. |
| Jul 25 2025 | 2025 Q2 | CTLP, SUPN, VC | Balance Sheets, Buybacks, M&A, small caps, valuation |
CTLP SUPN |
The commentary highlights once-in-a-generation valuation opportunities in U.S. small caps. Management emphasizes balance-sheet strength and resource conversion through M&A and buybacks. Volatility is framed as a tailwind for active value investing. |
| Mar 31 2025 | 2025 Q1 | BXC, FPH, TDW | - | - | |
| Dec 31 2024 | 2024 Q4 | AMBC, FPH, OCFC | - | - | |
| Sep 30 2024 | 2024 Q3 | PBF, SD | - | - | |
| Jul 19 2024 | 2024 Q2 | - | - | - | |
| May 7 2024 | 2024 Q1 | SPHR | - | - | |
| Jan 28 2024 | 2023 Q4 | COLL, HBB, PRA | - | - | |
| Oct 25 2023 | 2023 Q3 | BATRA, CCF, LXU | - | - | |
| Jul 14 2023 | 2023 Q2 | ITIC, TDW, TPH, WED CN, XHB | - | - | |
| Mar 31 2023 | 2023 Q1 | BATRA, FEPH, MSGE, TDW, WED CN | - | - | |
| Dec 31 2022 | 2022 Q4 | - | - | - | |
| Oct 25 2022 | 2022 Q3 | ECPG | - | - | |
| Jun 30 2022 | 2022 Q2 | BATRA, FEPH, MSGE, TDW, WED CN | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
AluminumCentury Aluminum sits at the intersection of AI data-center buildout and defense/energy security needs. The boom in data centers, EVs, and clean-energy infrastructure is tightening the U.S. aluminum market, pushing up the Midwest premium and incentivizing domestic smelting capacity to restart. |
Metals Data Centers Defense Domestic Production Supply Chain |
PharmaceuticalsEli Lilly represents a high-quality growth franchise in global healthcare, with leadership in diabetes, obesity, and neuroscience providing durable competitive advantages. The company's GLP-1 treatments continue to see demand outpace supply with additional indications on the horizon. |
Pharmaceuticals GLP1 Diabetes Obesity Healthcare | |
Regional BanksFlagstar has exceptional management and board that are ahead of the game in turning their business around after balance sheet issues. Trading at significant discount to conservatively marked balance sheet compared to similar banks. |
Banks Turnaround 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 |
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 |
| 2025 Q2 |
SmallCaps |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jan 22, 2026 | Fund Letters | Vic Cunningham | KALU | Kaiser Aluminum Corporation | Materials | Aluminum | Bull | NASDAQ | Aerospace, Aluminum, CapEx, manufacturing, Margins | Login |
| Jan 22, 2026 | Fund Letters | Vic Cunningham | COLL | Collegium Pharmaceutical, Inc. | Health Care | Pharmaceuticals | Bull | NASDAQ | buybacks, cashflow, earnings, Painmanagement, pharmaceuticals | Login |
| Jan 22, 2026 | Fund Letters | Vic Cunningham | ECPG | Encore Capital Group, Inc. | Financials | Consumer Finance | Bull | NASDAQ | cashflow, Collections, Credit, recovery, Specialty finance | Login |
| Jan 22, 2026 | Fund Letters | Vic Cunningham | UNF | UniFirst Corporation | Industrials | Diversified Support Services | Bear | New York Stock Exchange | Alignment, Governance, Takeovers, Uniforms, valuation | Login |
| Jan 22, 2026 | Fund Letters | Vic Cunningham | FLG | Flagstar Bank, N.A. | Financials | Regional Banks | Bull | New York Stock Exchange | banking, Bookvalue, Credit, restructuring, turnaround | Login |
| Oct 21, 2025 | Fund Letters | Vic Cunningham | AMBC | Ambac Financial Group Inc. | Financials | Insurance Brokers & Services | Bull | NYSE | acquisition, Capital-light, Insurance, Mga, Tax assets, transformation | Login |
| Oct 21, 2025 | Fund Letters | Vic Cunningham | AMBC | Ambac Financial Group Inc. | Financials | Insurance Brokers & Services | Bull | NYSE | acquisition, Capital-light, Insurance, Mga, Tax assets, transformation | Login |
| Oct 21, 2025 | Fund Letters | Vic Cunningham | BOISE | Boise Cascade Co. | Other | Building Materials | Bull | NYSE | Building materials, cash, consolidation, Housing, recovery | Login |
| Oct 21, 2025 | Fund Letters | Vic Cunningham | ROG | Rogers Corporation | Information Technology | Electronic Components | Bull | NYSE | Activism, Electronic materials, growth, Ip, Margins, restructuring | Login |
| Jul 25, 2025 | Fund Letters | Vic Cunningham | CTLP | Cantaloupe, Inc. | Information Technology | Data Processing & Outsourced Services | Bull | NASDAQ | Automation, consolidation, Payments, premium, Privatization, Spreads, Transactions | Login |
| Jul 25, 2025 | Fund Letters | Vic Cunningham | SUPN | Supernus Pharmaceuticals, Inc. | Health Care | Pharmaceuticals | Bull | NASDAQ | acquisition, Depression, Integration, Netcash, Optionality, pharmaceuticals, Postpartum | Login |
| TICKER | COMMENTARY |
|---|---|
| BATRK | The largest negative performance contributions this quarter derived from Atlanta Braves Holdings, FivePoint Holdings and BlueLinx Holdings. |
| BXC | The largest negative performance contributions this quarter derived from Atlanta Braves Holdings, FivePoint Holdings and BlueLinx Holdings. The latter two investments have faced headwinds from the slowdown in U.S. housing construction activity. |
| COLL | U.S. pain medication specialist, Collegium Pharmaceutical, also generated a strong performance contribution in the quarter after producing record quarterly revenue and disclosing improved operating income guidance and a new share repurchase authorization. |
| CTAS | During the quarter, we initiated new positions in two companies – Cintas Corp (CTAS) and Marvell Technology Inc. (MRVL). Cintas is the nation's largest uniform rental and facility services provider serving around 1 million customers. We are attracted to the company's strong execution, potential for continued growth in the future, return profile, and current valuation leading us to initiate a new position in the stock. |
| ECPG | Specialty finance company, Encore Capital Group, also provided an important contribution on the back of better than anticipated financial performance. |
| FPH | The largest negative performance contributions this quarter derived from Atlanta Braves Holdings, FivePoint Holdings and BlueLinx Holdings. The latter two investments have faced headwinds from the slowdown in U.S. housing construction activity. |
| KALU | Fourth quarter performance was led by North American aluminum manufacturer, Kaiser Aluminum, following strong quarterly financial results and progress on its multi-year investment to upgrade and expand production capacity in aerospace and packaging. |
| NYCB | During the quarter, the Fund initiated a new position in Flagstar Bank, NA. Flagstar Bank, National Association is a regional bank headquartered in New York and founded in 1859. Over the past few years, Flagstar has been undergoing a highly visible transformation featuring the legacy Flagstar Bank's acquisition of New York Community Bank (2022) and the absorption of former Signature Bank assets purchased from the FDIC during the depths of the 2023 regional banking crisis. |
| SEB | Seaboard's 83% return helped, but not enough. |
| SUPN | Supernus Pharmaceuticals is a specialty pharmaceutical company focused on the treatment of diseases in the central nervous system. We believe the company could benefit from its differentiated products in attention-deficit/hyperactivity disorder and Parkinson's disease. |
| UMBF | UMB Financial also contributed negatively. UMB Financial has also been a model of the owner-operator mentality. Many of the traits described above relating to how a good owner-operator company finances itself and guides capital reinvestment decisions can be seen in UMB Financial, which has established a long record of excellent financial stewardship. |
| UNF | UniFirst is a national uniform and laundry services business headquartered in Massachusetts. Today, governance of the company is controlled by Unifirst's founding family through a dual-class share structure, though the family owns a distinct minority of the shares and we are now two generations removed from the founder. We do not believe it is controversial to say that operating performance of the company has been mediocre, and shareholders have little, if any, return to show for their ownership during the last five or six years. |
| 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 | |||
