The curated database of hedge funds that publish investor letters. Research by geography, strategy, and schools of thought.
| # | Fund | Strategy | Style | Geography | AUM | Latest Letter |
|---|---|---|---|---|---|---|
As of Oct 13, 2026
Longleaf Partners Fund reported a difficult third quarter in 2026, delivering a net return of -2.41% and bringing year-to-date performance to -3.15% net of fees, lagging the broad equity rally reflected in the S&P 500 (+2.30% in Q3; +12.75% YTD) and Russell 1000 Value (+2.61% in Q3; +19.27% YTD). Management maintains that fundamental corporate appraisal values have materially outpaced the share price scoreboard, creating a wide divergence between quoted market multiples and underlying cash-generative power across the fund's 18 holdings. Portfolio exposure remains disciplined, finishing the quarter with a price-to-value ratio in the mid-50s percentage range and an unencumbered cash reserve of 6.4% of total net assets. The manager's macroeconomic diagnosis points to an irrational and punitive environment that severely penalizes non-AI equities and penalizes companies experiencing short-term, fixable earnings disruptions. Higher interest rates are identified as a recent macro wildcard that disproportionately impacts market sentiment in rate-sensitive segments like housing and timber, though the fund's balance-sheet-strong holdings remain resilient. Two dominant portfolio themes explain current positioning: deeply oversold holdings facing transitory operational resets that the market has erroneously extrapolated into perpetuity, and high-quality, owner-operated compounders whose positive underlying earnings growth has not yet been reflected in stock prices. Portfolio activity remained focused and catalytic, highlighted by initiating a new position in Universal Music Group, adding to Fortune Brands Innovations following short-term earnings guidance cuts, and trimming Avantor into price strength after a 50% quarterly rebound. Top conviction holdings—including People Inc. (8.5%), Albertsons (7.7%), and Exor (7.6%)—are experiencing constructive corporate actions and strategic optionality, while late-quarter M&A interest and leadership transitions at Mattel (6.4%) exemplify management's active investee engagement to unlock value.
Capitalize on irrational market bifurcations by taking concentrated, contrarian positions in deeply discounted, cash-generative companies where active corporate engagement and corporate restructuring catalyze value recognition.
Management expresses elevated confidence in future prospective returns as portfolio price-to-value discounts have improved into the mid-50s percentage range. With corporate earnings multiples compressed by 10-20% despite operational derisking, the fund anticipates that the defensive, cash-generative nature of its underlying businesses and ongoing corporate engagement catalysts will deliver powerful downside protection and superior long-term performance relative to an elevated broad market.
Moderate Conviction Bullish
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