| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | 15.7% |
Springview Partnership delivered strong Q2 2025 performance with limited partners gaining 17.8% in the quarter and 15.7% year-to-date, significantly outperforming the S&P 500's 6.2% first-half return. Since inception, the fund has generated 52.3% cumulative net returns versus 37.2% for the S&P 500, with minimal taxable capital gains realization. The portfolio reflects an eclectic mix of businesses selected through bottom-up conviction, with seven of the top ten holdings being founder-led or having meaningful insider ownership. Robinhood Markets emerged as the most profitable investment, quadrupling from an $18-20 cost basis as business results dramatically exceeded expectations. Mercury General validated the investment thesis by recovering from wildfire losses, while Worthington Steel represents a cyclical opportunity awaiting market recovery. The fund maintains concentrated exposure with top ten holdings representing 74.8% of assets, focusing on businesses with durable competitive advantages and strong reinvestment opportunities that can compound capital over years.
The Partnership focuses on compounding capital over the long term by investing in durable, conservatively capitalized businesses with founder-led or insider-aligned management teams that possess competitive intensity and constructive paranoia.
The Partnership is off to an excellent start in 2025 with an eclectic mix of businesses selected based on bottom-up conviction. Management remains excited about portfolio prospects over the coming years.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Aug 5 2025 | 2025 Q2 | AMZN, COF, COIN, CR, EIX, FFH.TO, HOOD, IBKR, INTC, MCY, NTDOY, SCHW, SEG, SPOT, UBER, WRB, WS | Concentration, Fintech, growth, insurance, Long/Short, Quality, value |
HOOD SEG MCY WS HOOD SEG MCY WS |
Springview Partnership's concentrated, quality-focused approach delivered exceptional Q2 results, with Robinhood's quadruple return highlighting the value of backing founder-led businesses trading at discounts to peers. The fund's tax-efficient, long-term strategy continues compounding capital through durable businesses with strong competitive moats and aligned management teams. |
| May 3 2025 | 2025 Q1 | ABAC, AMZN, BRK-B, CPRT, CR, CRH, FFH, HLT, HOOD, MCY, NTDOY, SEG, SPOT, WRB, WS | Compounding, insurance, Long/Short, Quality, value, volatility |
SPOT MCY SEG WS |
Springview outperformed during Q1 market weakness through disciplined stock selection and volatility management, maintaining high net exposure while adding quality positions like Spotify. The fund's focus on defensive, high-quality businesses with strong balance sheets continues to deliver superior risk-adjusted returns, compounding at 8.2% annually since inception versus 6.8% for the S&P 500. |
| Feb 10 2025 | 2024 Q4 | AMZN, BRK-B, CPRT, CR, CRH, FFH, FMX, HLN.L, HLT, HOOD, MCY, MKL, MSGS, SEG, SPOT, V, VAC, WRB, WS, WTM | Capital Allocation, Concentration, long-term, P&C Insurance, risk management, value | - | Springview delivered 19.7% net returns in 2024 through concentrated investing in high-quality businesses, particularly P/C insurers. The fund successfully managed risk during Mexico's political upheaval while adding major positions in Amazon and Robinhood. Strong performance came from disciplined long-term ownership, effective hedging, and focus on businesses with attractive valuations and strong capital recycling abilities. |
| Nov 19 2024 | 2024 Q3 | AAPL, CR, CRH, CSCO, EXO.MI, FFH, FMX, HLT, MCY, MSFT, NTDOY, NVDA, SEPO, TSLA, WRB, WS, YHOO | Concentration, Mega Cap, small caps, technology, value | - | Springview's value-focused approach faced Q3 headwinds but Baron sees a turning tide. Mega-cap valuations have reached mathematical limits while small-cap opportunities abound. Market breadth improvement and Fed easing signal rotation toward overlooked smaller companies. Portfolio positioned with median $10B market cap holdings trading at attractive valuations for potential outperformance. |
| Aug 12 2024 | 2024 Q2 | BRK-A, COKE, CR, CRH, EXO, FFH, FMX, HLT, MCY, NTDOY, WOR, WRB | Concentration, fundamentals, insurance, Long/Short, value | - | Springview's concentrated portfolio underperformed in Q2 despite strong underlying fundamentals, with insurance holdings pressured by cycle concerns. W.R. Berkley and CRH reported robust earnings growth while share prices declined. The manager maintains conviction in long-term value creation through patient capital allocation, expecting business fundamentals to drive future returns. |
| Apr 29 2024 | 2024 Q1 | BRK-A, CPRT, CRH, EXO.MI, FFH, FMX, HLN.L, HLT, MSGS, NTDOY, WRB | Concentration, global, insurance, Long/Short, value | - | Springview delivered 11.3% net returns in Q1 2024, outperforming the S&P 500 through concentrated value investing in quality businesses like W.R. Berkley and Fairfax Financial. The manager avoids AI momentum stocks, focusing on companies growing intrinsic value. With 111.7% gross long exposure, the fund remains bullish and fully invested, finding compelling opportunities in the current market environment. |
| Feb 21 2024 | 2023 Q4 | BRK-B, CPRT, CRH, EXOR.MI, FFH, FMX, HLN.L, HLT, MKL, NTDOY, UNP, WRB, WTM | Concentration, insurance, Long/Short, tax efficiency, underperformance, value |
WRB MKL SUNP IN FFH FMX |
Springview's concentrated quality portfolio underperformed in 2023's risk-on rally but delivered strong since-inception outperformance. P&C insurers lagged on Fed pivot expectations while Fairfax and FEMSA contributed positively. Manager maintains conviction in noncyclical, well-capitalized companies despite tactical positioning challenges, emphasizing long-term compounding and tax efficiency over market timing. |
| Nov 10 2023 | 2023 Q3 | AAPL, AMZN, BRK-B, CPRT, EXO.MI, FFH, FMX, GOOGL, HLN.L, HLT, META, MKL, MSFT, NVDA, TSLA, V, WRB, WTM | Concentration, insurance, Long/Short, Quality, special situations, value | - | Springview's concentrated long-short strategy outperformed in Q3's declining market, generating +2.5% net returns versus S&P 500's -3.3%. The fund targets solid businesses at 10-15x earnings, emphasizing P&C insurers benefiting from higher rates while avoiding leveraged or China-exposed names. Despite missing tech opportunities in 2022, the manager remains fully invested, expecting equities to outperform cash long-term. |
| Aug 4 2023 | 2023 Q2 | ATVI, BRK-B, CPRT, EXO.MI, FFH, FMX, HLN.L, HLT, MKL, WRB, WTM | Buybacks, Concentration, insurance, Long/Short, Quality, value |
HLN.L FMX WRB |
Springview underperformed in Q2 with concentrated value approach focused on quality businesses at attractive valuations. Heavy insurance exposure and active share buyback programs across 70% of holdings. New positions in discounted Haleon and restructuring FEMSA story. Manager remains optimistic on fundamentals despite near-term headwinds, emphasizing patient capital compounding over five-year periods. |
| May 3 2023 | 2023 Q1 | ATVI, FFH, GGG, HLT, MKL, SHW, V, WRB, WTM | Banking Crisis, Buybacks, Concentration, Float, insurance, value | - | Springview's insurance-heavy portfolio underperformed in Q1 as markets favored speculation over quality. Portfolio companies delivered strong +20% average earnings growth with active buybacks, but P&C insurers faced cycle concerns. The manager expects casualty pricing recovery and remains committed to patient compounding in durable franchises with rising float value. |
| Jan 25 2023 | 2022 Q4 | BRK/A, FFH CN, HLT, MKL, WRB, WTM | - | - | |
| Oct 24 2022 | 2022 Q3 | - | - | - | |
| Jul 18 2022 | 2022 Q2 | BRK/A, GOOG, MKL, WRB, WTM | - | - | |
| May 4 2022 | 2022 Q1 | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q2 |
Capital MarketsRobinhood has been the Partnership's most profitable investment, driven by rapid innovation, market share gains, and customer loyalty in a large growing market. Business results dramatically exceeded expectations with assets under custody growing 115% and earnings up 109% year-over-year. The company benefits from product innovation, international expansion, strategic acquisitions, and favorable tailwinds from strong equity and crypto markets. |
Brokerage Trading Fintech Crypto Innovation |
P&C InsuranceMercury General validated the core thesis after recovering from Los Angeles wildfire losses. The wildfire losses proved to be a short-term earnings event rather than capital impairment, with net exposure of approximately $320 million after tax. The company now trades at 9-10x earnings, generates ample free cash flow, and may soon resume returning capital to shareholders. |
Insurance Catastrophe Reinsurance California Valuation | |
SteelWorthington Steel represents a deeply cyclical opportunity with latent upside despite not meeting expectations. The company is exposed to domestic automotive and construction markets which have weakened, with tariff-related uncertainty causing customer caution. Management believes challenges are mostly cyclical with minimal net debt and attractive exposure to electrical steel growth areas. |
Cyclical Automotive Construction Electrical Consolidation | |
| 2025 Q1 |
VolatilityManager embraces volatility as the price of admission to long-term compounding, viewing it as an opportunity rather than something to avoid. During April's sharp market decline, the fund maintained minimal trading activity and kept net exposure steady at 90-95%. The manager believes volatility is the one constant in markets and reflects human emotion reacting to uncertainty. |
Market volatility Risk management Emotional discipline Market timing Downside protection |
QualityThe fund focuses on high-quality businesses with defensive characteristics, conservative financing, and strong free cash flow generation. Holdings like Spotify are described as founder-led with net cash balance sheets. The manager emphasizes below-average business risk through preference for more defensive businesses and disciplined valuation stance. |
Business quality Defensive characteristics Cash generation Balance sheet strength Founder-led | |
P&C InsuranceMercury General represents a significant position in California personal auto and homeowners insurance. The manager believes the California personal lines market is entering a favorable pricing period with regulatory support. Despite wildfire losses creating near-term uncertainty, the manager views this as an earnings event rather than capital event, with the catastrophe potentially improving the operating environment through tightened capacity and rising pricing. |
Auto insurance California market Rate increases Catastrophe losses Hard market | |
| 2024 Q4 |
P&C InsuranceThe property/casualty insurance industry remains a favorite hunting ground for the partnership. The fund currently owns five P/C insurance companies (six including Berkshire Hathaway), with one being a special situation merger-arbitrage play. These insurers trade at attractive valuations, generate strong Returns on Equity, and have the ability to recycle and reinvest capital internally at high returns. |
Insurance Returns on Equity Capital Allocation Valuations Underwriting |
Risk ManagementThe FEMSA investment serves as an instructive case study in research process, hedging strategy, and buy/sell discipline. The fund prepared by buying cheaply, managing position sizing, and shorting a Mexican stock market ETF to hedge country-specific risks. This approach limited the net loss and turned what could have been a material loss into a modest profit overall. |
Hedging Position Sizing Country Risk Downside Protection Portfolio Management | |
Capital MarketsThe fund initiated a major new position in Robinhood Markets, which became one of the top five positive contributors for the year. The investment reflects exposure to the evolving retail trading and investment platform landscape. |
Retail Trading Investment Platforms FinTech Brokerage Digital Finance | |
| 2024 Q3 |
ValueManager believes value-oriented investing is making a comeback as mega-cap stocks face mathematical reality of size constraints and elevated valuations. The fund focuses on smaller, less high-profile companies trading cheaply relative to intrinsic value estimates. Current market offers rich opportunities in small- and mid-cap stocks trading at single-digit earnings multiples or below liquidation value. |
Value Small Caps Undervalued Intrinsic Value Cheap Stocks |
Small CapsPortfolio companies have median market cap of $10 billion with many investments below $1 billion mark, some as small as $100 million. These stocks have been left behind in the frenzy to buy mega-cap technology names. Manager sees above-average probability that carefully selected small-cap securities will outperform the S&P 500 in coming years. |
Small Caps Mid Cap Market Cap Undervalued Outperformance | |
| 2024 Q2 |
P&C InsuranceThe manager discusses property/casualty insurance cycle concerns and skeptical investor sentiment about near-term profit outlook. Despite market volatility, the manager believes prospects for insurance holdings remain unchanged and reports strong fundamental progress with W.R. Berkley showing 37% Y/Y increase in operating EPS and Fairfax increasing book value per share by 17% Y/Y. |
Insurance Underwriting Premiums Book Value Cycle |
HotelsHilton is discussed as a significant holding that performed well in Q1 with 17% returns but underperformed in Q2 with only 2.4% gains. The manager reports strong fundamental progress with Hilton's Q2 EPS rising 17% Y/Y, indicating continued business value creation despite share price volatility. |
Hospitality RevPAR Occupancy ADR Travel | |
| 2024 Q1 |
InsuranceThe fund holds significant positions in W.R. Berkley and Fairfax Financial, which were top contributors to performance. The manager uses sector ETF shorts to hedge insurance sector exposure, indicating concentrated exposure to this sector. |
P&C Insurance Reinsurance Insurance Brokers |
ValueThe manager emphasizes investing in businesses growing intrinsic value that will translate into higher stock prices. The approach is described as patient, concentrated investing focused on long-term value creation rather than momentum or AI trends. |
Value Quality Growth | |
| 2023 Q4 |
P&C InsuranceFund holds three large property/casualty insurers (W.R. Berkley, White Mountains, Markel) that underperformed in 2023 as investors rotated away from companies benefiting from rising rates. Despite disappointing short-term performance, excellent underwriters like Berkley have historically earned solid returns across interest rate cycles. |
Insurance Float Underwriting Interest Rates Berkley |
Tax OptimizationManager emphasizes deferring capital gains realization to benefit from lower long-term tax rates and essentially receive an interest-free loan from the Treasury. This strategy allows keeping more capital productively invested while minimizing tax drag on returns. |
Tax Deferral Capital Gains Unrealized Gains Tax Efficiency | |
Convenience StoresFEMSA's Oxxo convenience store chain in Mexico continues strong performance with double-digit comparable sales and profit growth. The company also has significant excess capital from divestitures that could be returned to shareholders. |
Oxxo Mexico Retail FEMSA Excess Capital | |
| 2023 Q3 |
P&C InsuranceThe fund has intentionally allocated significant capital to property/casualty insurers, which stand to benefit greatly from rising interest rates. Fairfax Financial continues to post exceptional numbers with operating ROE clocking in at 21%. W.R. Berkley staged a welcome recovery with excellent 21% return on equity as both underwriting profits and investment income surpassed expectations. |
Insurance Underwriting Investment Income Interest Rates ROE |
ValueThe manager emphasizes buying solid and predictable businesses at 10-15x earnings should not go out of style. Below the Magnificent Seven, equities are reasonably attractive with businesses cheaper today than they were a year or two ago. Some stocks are considerably cheaper, having pulled back to levels of three or four years ago even as earnings have grown. |
Valuation Earnings Multiple Attractive Pricing Undervalued Cheap | |
HotelsHilton's results were reliably solid, demonstrating once again the power of its brands and global hotel network. Revenue per available room increased 6.8%, while its pipeline of future rooms inflected, growing at the fastest pace in six years. Adjusted EPS grew 27.6% year-over-year, and the company is aggressively repurchasing shares. |
RevPAR Hotel Brands Pipeline Growth Share Repurchases Travel Recovery | |
| 2023 Q2 |
P&C InsuranceThe fund has significant concentration in property/casualty insurance at approximately 29% of assets. Insurance stocks are characterized as cheap, generating substantial cash flow, and run by trusted owner-operators. The competitive landscape remains favorable with firm pricing and rising interest rates enhancing investment income. |
Insurance Underwriting Pricing Cash Flow Interest Rates |
BuybacksNearly 70% of portfolio companies are actively repurchasing shares. W.R. Berkley's buybacks are highlighted as annualizing at 7% of shares outstanding, a pace not seen in over a decade. Management teams are viewed as recognizing good value when buying back undervalued stock. |
Share Repurchases Capital Allocation Value Creation Management | |
ValueThe manager emphasizes disciplined value investing with portfolio valuations described as somewhere between quite reasonable to extremely cheap. Specific examples include Haleon trading at less than 17x next year's earnings at a discount to peers, and FEMSA offering Oxxo at approximately 7x EBITDA. |
Valuation Discount Multiples Cheap Undervalued | |
| 2023 Q1 |
P&C InsuranceThe fund holds significant positions in property-casualty insurers including W.R. Berkley, Markel, and White Mountains. These companies experienced temporary headwinds from deceleration in premium rate growth and concerns about the hard cycle ending, but the manager expects casualty pricing to improve in the second half. Insurance is viewed as a durable business with stable demand and the benefit of float investment. |
Insurance Float Underwriting Premiums Cyclical |
BuybacksNine of eleven companies that reported Q1 results are actively buying back stock, increasing the fund's ownership percentage. The manager views share repurchases as a positive capital allocation decision that benefits long-term shareholders. |
Share Repurchases Capital Allocation Ownership |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Aug 4, 2023 | Fund Letters | Springview Capital Management | HLN.L | Haleon PLC | Consumer Staples | Personal Products | Bull | London Stock Exchange | Branded Products, Consumer healthcare, deleveraging, Free Cash Flow, Pharmaceutical, spinoff, UK, Value | Login |
| Aug 4, 2023 | Fund Letters | Springview Capital Management | FMX | Fomento Economico Mexicano SAB de CV | Consumer Staples | Food & Staples Retailing | Bull | NYSE | asset sales, Coca-Cola Bottler, convenience stores, holding company, Mexican, restructuring, shareholder returns, value unlock | Login |
| Aug 4, 2023 | Fund Letters | Springview Capital Management | WRB | W.R. Berkley Corporation | Financials | Property & Casualty Insurance | Bull | NYSE | book value growth, investment income, Property & Casualty Insurance, ROE, Sector Consolidation, Share Buybacks, underwriting, Value | Login |
| Aug 5, 2025 | Fund Letters | Springview Capital Management | HOOD | Robinhood Markets | Diversified Financial Services | Investment Banking & Brokerage | Bull | NASDAQ | brand strength, commission-free trading, Cryptocurrency Trading, Fintech, founder-led, international expansion, market share gains, Mobile Platform, Retail Brokerage, User growth | Login |
| Aug 5, 2025 | Fund Letters | Springview Capital Management | MCY | Mercury General | Insurance | Property & Casualty Insurance | Bull | NYSE | Book Value Recovery, California, capital returns, contrarian, Crisis Investing, Earnings-recovery, Free Cash Flow, Property & Casualty Insurance, Reinsurance, Wildfire Losses | Login |
| Aug 5, 2025 | Fund Letters | Guy Baron | HOOD | Robinhood Markets, Inc. | Financials | Capital Markets | Bull | NASDAQ | asset growth, Crypto, Fintech, founder-led, Retail trading, turnaround | Login |
| Aug 5, 2025 | Fund Letters | Springview Capital Management | WS | Worthington Steel | Materials | Steel | Bull | NYSE | automotive, Capacity Investments, construction, Cyclical, Electrical Steel, End Market Recovery, Free Cash Flow, industry consolidation, Steel Processing, Transformers | Login |
| Aug 5, 2025 | Fund Letters | Guy Baron | SEG | Seaport Entertainment Group Inc. | Real Estate | Real Estate Management & Development | Bear | New York Stock Exchange | cash burn, Distressed, exit, liquidity risk, Real Estate, Seaport District | Login |
| Aug 5, 2025 | Fund Letters | Guy Baron | MCY | Mercury General Corporation | Financials | Property & Casualty Insurance | Bull | New York Stock Exchange | California, deep value, Insurance, Reinsurance, turnaround, Wildfire Risk | Login |
| Aug 5, 2025 | Fund Letters | Springview Capital Management | SEG | Seaport Entertainment | Real Estate | Real Estate Development | Bear | NYSE | asset value, cash burn, entertainment, exit strategy, Food Hall, liquidity risk, Manhattan, Operational Issues, Real Estate, turnaround | Login |
| Aug 5, 2025 | Fund Letters | Guy Baron | WS | Worthington Steel, Inc. | Materials | Steel | Bull | New York Stock Exchange | consolidation, Cyclical, Electrical Steel, Free Cash Flow, infrastructure, Steel Processing | Login |
| May 3, 2025 | Fund Letters | Springview Capital Management | MCY | Mercury General | Financials | Property & Casualty Insurance | Bull | NYSE | Auto Insurance, California, Catastrophe, Hard Market, Insurance, Property & Casualty, Regulatory, Value | Login |
| May 3, 2025 | Fund Letters | Springview Capital Management | SPOT | Spotify Technology | Communication Services | Interactive Media & Services | Bull | NYSE | Audio, digital media, founder-led, Free Cash Flow, growth, SaaS, Streaming, Subscription | Login |
| May 3, 2025 | Fund Letters | Springview Capital Management | SEG | Seaport Entertainment | Real Estate | Real Estate Management & Development | Bull | NASDAQ | asset value, development, entertainment, Las Vegas, Manhattan, Real Estate, spinoff, Value | Login |
| May 3, 2025 | Fund Letters | Springview Capital Management | WS | Worthington Steel | Materials | Steel | Bull | NYSE | automotive, construction, Cyclical, debt-free, Electrical Steel, spinoff, Steel, Value | Login |
| Feb 21, 2024 | Fund Letters | Springview Capital Management | FMX | Fomento Economico Mexicano S.A.B. de C.V. | Consumer Staples | Food Distributors | Bull | NYSE | capital return, convenience stores, dominant market position, double-digit growth, Excess Capital, Mexico, OXXO, restructuring | Login |
| Feb 21, 2024 | Fund Letters | Springview Capital Management | MKL | Markel Corporation | Financials | Property & Casualty Insurance | Bear | NYSE | exit, private equity, Property & Casualty Insurance, Reserve Strengthening, specialty insurance, turnaround, underwriting | Login |
| Feb 21, 2024 | Fund Letters | Springview Capital Management | SUNP IN | Union Pacific Corporation | Industrials | Railroads | Neutral | NYSE | CEO change, duopoly, infrastructure, Labor Costs, Pricing power, railroads, Transportation, Volume | Login |
| Feb 21, 2024 | Fund Letters | Springview Capital Management | FFH | Fairfax Financial Holdings Limited | Financials | Multi-line Insurance | Bull | TSX | Canada, conservative investment, Float, investment income, Multi-line Insurance, Short-Seller Attack, Underwriting Profit, Value | Login |
| Feb 21, 2024 | Fund Letters | Springview Capital Management | WRB | W.R. Berkley Corporation | Financials | Property & Casualty Insurance | Bull | NYSE | financials, Float, Insurance, Interest Rate Sensitive, Property & Casualty Insurance, underwriting, Value | Login |
| TICKER | COMMENTARY |
|---|---|
| WS | Worthington Steel also bounced back in Q2, following strong results for its fiscal fourth quarter (ended May). We've held our position for over a year, and while the investment has not met our expectations thus far, we continue to view it as a deeply cyclical opportunity with latent upside. The company is exposed to domestic automotive and construction markets, both of which have weakened since our initial purchase. Tariff-related uncertainty hasn't helped either—customers have grown cautious, curbing demand for Worthington's custom steel products used in vehicles, transformers, garage doors, grain bins, and more. Still, we believe Worthington's challenges are mostly cyclical, not structural. The company has minimal net debt, attractive exposure to electrical steel (a growth area), and a meaningful opportunity to consolidate a fragmented industry. With a current market cap of $1.5 billion, we believe free cash flow could exceed $200 million annually within the next 1–2 years as end markets recover and recent investments in electrical steel capacity come on line. |
| HOOD | Robinhood has been the Partnership's most profitable investment to date. We began accumulating shares in May 2024, driven by our belief that the company was innovating rapidly, gaining market share, and winning customer loyalty in a large and growing market. At the time, the stock traded at a steep price-to-book discount compared to larger, slower-growing peers like Charles Schwab, Interactive Brokers, and Coinbase—an anomaly that astonished us. We attributed this discount to lingering stigma from Robinhood's controversial role in the GameStop meme stock saga, during which the company faced a collateral shortfall that nearly upended the business. But that was then. We believed investors had failed to recognize the significant operational and financial progress the company had made. Where others saw a meme stock, we saw a founder-led business with a powerful brand, a sticky and expanding user base, ample excess capital, and strong execution. We began buying shares for just over $18, and our cost basis is under $20 per share. As of this writing, Robinhood trades around $106 per share. Business results have dramatically exceeded expectations this year. Since Q1 2024, assets under custody have grown +115%, and earnings in the first half of 2025 are up +109% year-over-year. These results reflect a combination of product innovation, international expansion, strategic acquisitions, and favorable tailwinds from strong equity and crypto markets. We remain mindful that Robinhood's near-term performance is sensitive to investor sentiment and trading activity, especially in cryptocurrencies—so we've sized the position accordingly. As the share price rose sharply, we trimmed to keep the position in the 6–8% range. This is a rare example of us reducing a position we continue to like—purely because of valuation. While our preference is to let great businesses compound uninterrupted, in this case, the share price more than quadrupled in about a year. At a market cap of over $90 billion (up from $19 billion when we invested), we felt that a meaningful portion of the company's future growth prospects appeared to be reflected in the stock price. Notably, most of our gains realized to date have qualified as long-term for tax purposes. That said, we continue to hold a substantial position in Robinhood. We believe the company has years of growth ahead, supported by brand strength, product momentum, and a widening moat. |
| SEG | We exited our investment in Seaport Entertainment during the second quarter. We initiated the position in Q3 2024 at an average cost of approximately $27 per share, including participation in a rights offering. At the time, we saw compelling value in acquiring what amounted to a swath of lower Manhattan real estate for just over $150 million in enterprise value. Our primary concern, however, was the company's persistent cash burn, driven largely by underperformance at the Tin Building by Jean-Georges, its flagship food hall in the Seaport District. Over the course of the year, our concerns deepened regarding management's ability to stabilize cash flow. These worries came to a head in May, when the company reported $37 million in cash outflow for the first quarter alone. Extrapolating that trend, we feared Seaport would soon be forced to raise equity or fire-sell assets—an outcome we were unwilling to risk. We exited the position at just under $19 per share. |
| MCY | Mercury General, which fell –15% in Q1, rebounded +21% in Q2 and has continued to rise into the third quarter. The stock's sharp recovery from January's Los Angeles wildfires—a period that cast real doubt on Mercury's ability to continue as a going concern—validated the core of our thesis. As discussed in our prior letter, we believed the wildfire losses would prove to be a short-term earnings event, not a capital impairment. Our research into the California insurance market and Mercury's reinsurance coverage supported this view, and we felt confident enough in our work to take the unusual step of publicly sharing our conclusions on X, directly countering a vocal short seller. That view is now playing out. With increasing clarity that Southern California Edison's transmission lines were likely responsible for the fires, and with substantial reinsurance recoveries, it appears Mercury's net exposure will be approximately $320 million after tax—equivalent to about 17% of pre-fire book value. To put that in context, Mercury reported $148 million in after-tax operating earnings in Q2 alone, and management estimates a forward earnings run-rate of $380 million to $440 million annually. Remarkably, GAAP book value per share at the end of Q2 2025 now exceeds the pre-wildfire level, highlighting the resilience of the business and the strength of its reinsurance program. At a market cap of $3.9 billion, Mercury trades at 9–10x earnings, generates ample free cash flow, and may soon resume returning capital to shareholders. We have modestly trimmed the position as the stock rallied but continue to maintain a significant holding. |
| 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 | |||
