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 Small-Cap Fund reported difficult third-quarter 2026 results, returning -9.24% net of fees compared to -7.23% for the Russell 2000 and -4.91% for the Russell 2000 Value. Year-to-date, the fund returned -13.89% net of fees versus +13.71% for the benchmark. Despite sharp price headwinds, the manager emphasizes that underlying business value per share growth has substantially outpaced market price indications, ending the period with an extraordinarily discounted portfolio price-to-value ratio in the low-50s% and a disciplined cash reserve of 5.6% across 17 holdings. The manager views this wide valuation disconnect as comparable to previous historical turning points like 2000 and 1987. From a macroeconomic standpoint, the fund navigates a bifurcated, sentiment-driven market environment that has severely penalized companies reporting temporary earnings resets while overly rewarding narrow macro themes. Heightened interest rates, cost inflation tied to Middle Eastern geopolitical conflict, and changing domestic immigration policy affecting labor and consumer traffic represent key operational hurdles. However, management notes that portfolio multiples have contracted 10% to 20% despite underlying operational risk reduction, creating asymmetric upside potential as broader economically sensitive small-cap stocks begin mean-reverting. Portfolio activity remained focused on disciplined capital allocation and active ownership. The fund initiated one new position in a prolific cash-flow generator within a core competence industry while executing no full exits. Performance detraction was concentrated in real estate and digital assets facing near-term headwinds, notably Empire State Realty Trust, TripAdvisor, and Shenandoah Telecommunications. Conversely, packaging producer Clearwater Paper and Alaskan cable provider Liberty Capital served as contributors, while post-quarter-end takeover interest in core holding Mattel illustrates the latent catalyst potential within the concentrated portfolio.
Capitalize on severe market overreactions to short-term earnings resets by concentrating capital in financially resilient, high-quality small-cap businesses trading at steep discounts to intrinsic value with active corporate catalysts.
The manager expresses heightened confidence in future investment returns, emphasizing that portfolio price-to-value has compressed to roughly 50%. Historically, similar extreme valuation discounts in 1998, 2008, 2009, 2020, and 2022 resulted in average cumulative fund returns of 45.9% over one year and 71.2% over three years, substantially outpacing benchmark indices.
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