| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 8.4% | 7.4% | 35.2% |
| 2025 |
|---|
| 35.5% |
The Third Avenue Value Fund returned 7.47% in Q4 2025 and 35.46% for the full year, significantly outperforming benchmarks. The Fund's mining businesses, particularly Warrior Met Coal, Lundin Mining, and Capstone Copper, were the largest performance contributors as copper demand growth became entwined with data center buildouts while supply challenges persist. European holdings including Bank of Ireland, Deutsche Bank, and BMW also contributed positively, benefiting from a weaker U.S. dollar and improved operating performance. The manager reduced positions in Deutsche Bank and Bank of Ireland as their reputational rehabilitation nears completion. Oil and gas service companies faced headwinds from project delays and policy changes, though the manager maintains conviction in the thesis that offshore spending must increase to maintain production levels. Resource conversion activity remained robust with companies like Harbour Energy, CK Hutchison, and Comerica executing value-creating transactions. The Fund initiated a position in container shipper T.S. Lines, capitalizing on Asia-Pacific trade growth and fleet scarcity dynamics.
The Fund focuses on undervalued, well-financed companies with entrepreneurial management teams that can create shareholder value through resource conversion activities, while maintaining significant exposure to copper miners based on the indispensable nature of copper to modern economies and the exceptional difficulty of maintaining global supply.
Manager remains optimistic about copper mining investments given the indispensable nature of copper and supply challenges, continues to view Japan as an attractive area of opportunity with many well-run companies not well-followed by analysts, and expects resource conversion activity to continue creating value for undervalued, well-financed companies with entrepreneurial management teams.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 22 2026 | 2025 Q4 | 0001.HK, 2603.TW, 6951.T, 6955.T, BIRG.L, BMW.DE, BZU.MI, CMA, CS, DB, HBR.L, HCC, IFP.TO, LUN.TO, SFOR.L, SSUB.OL, SUBCY, TDW, VAL | Banking, Copper, energy, Europe, Mining, Resource Conversion, value | - | Fund holds significant positions in copper miners Lundin Mining and Capstone Copper, viewing copper as indispensable to modern economies with exceptional supply challenges. Manager believes… |
| Oct 21 2025 | 2025 Q3 | AC PM, BCC, ROG | Coal, Copper, gold, Housing, Value Investing |
CS LUN HBR OR DBK BOISE ROG AC |
The fund emphasizes exposure to commoditiesparticularly copper, gold, and coalamid tight supply and rising prices, supporting miners like Capstone Copper and Warrior Met Coal. It… |
| Jul 22 2025 | 2025 Q2 | CRE LN | diversification, Global Equities, price discipline, valuation, value | CRE LN | The letter critiques concentration risk in expensive U.S. mega-cap equities and argues for price discipline. Management highlights global value opportunities, particularly in Japan and Europe.… |
| Mar 31 2025 | 2025 Q1 | 6951 JP | - | - | - |
| Jan 28 2025 | 2024 Q4 | BMW GR, MBG GR | - | - | - |
| Sep 30 2024 | 2024 Q3 | 7270 JP | - | - | - |
| Jul 19 2024 | 2024 Q2 | 8283 JP, CBG LN | - | - | - |
| May 7 2024 | 2024 Q1 | BRIG LN, HBR LN | - | - | - |
| Jan 31 2024 | 2023 Q4 | BC51 GR, BMW GR, H09 GR | - | - | - |
| Oct 25 2023 | 2023 Q3 | - | - | - | - |
| Jul 13 2023 | 2023 Q2 | - | - | - | - |
| Mar 31 2023 | 2023 Q1 | - | - | - | - |
| Jan 15 2023 | 2022 Q4 | - | - | - | - |
| Oct 25 2022 | 2022 Q3 | ESYJY | - | - | - |
| Jun 30 2022 | 2022 Q2 | - | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
BuybacksShare repurchases in 2024 and 2025 hit consecutive records as companies raced to meet Tokyo Stock Exchange capital efficiency mandates. Buybacks were a primary driver of the market's 20% climb in the first half of FY2025. |
Share Repurchases Capital Efficiency TSE Mandates Shareholder Returns Records |
CoalCoal consumption rose 7-8% in 2025, first increase in years, driven by data center demand and higher gas prices. Multiple plant closures delayed or cancelled as grid reliability concerns mount. Asia continues expanding coal capacity despite transition promises. |
Thermal Data Centers Asia Utilities | |
CopperMarket shifted from deficit to surplus as Chinese demand stalled for first time in 25 years while supply expanded by 3 million tonnes since 2021. Exchange inventories reached 1.2 million tonnes, highest since 2003. Bearish outlook as China transitions from under-consuming to over-consuming copper. |
Base Metals China Inventories Surplus | |
Energy TransitionThe portfolio maintains significant exposure to electrification themes through companies like Bloom Energy, which provides clean, reliable power solutions for AI data centers. The energy transition represents a structural opportunity as companies race to build power infrastructure to support growing electricity demands from AI workloads. |
Electrification Clean Energy Power Generation Fuel Cells Grid Infrastructure | |
OilOil markets disrupted by closure of Straits of Hormuz affecting 20% of global production. Prices surged from $70 to $119.50 before retreating to $90. Market may be tighter than commonly believed despite IEA projections of surplus. Oil represents cheapest major asset class globally, trading at near-record lows relative to gold. |
Crude Brent WTI Hormuz Supply | |
SanctionsManager highlights a profound divergence in U.S. sanctions activity, noting recent seizure of dark fleet oil tankers, arrest of Nicolas Maduro, U.S. claim of control over Venezuela's energy industry, and sanctions on Russia's largest oil producers. This marks a departure from decades of avoiding sanctions that would impact energy flows, with gunboat diplomacy and military embargos returning. |
Trade Policy Energy Trading Oil Tankers Geopolitical Energy | |
| 2025 Q3 |
CommoditiesBull market may be in early stages with most commodities 46% below nominal peaks and 73% below inflation-adjusted highs. Commodity-to-equity ratio near historic lows suggests capital starvation. Current cycle appears only one-third complete compared to historical precedent. |
Cycles Capital Valuation Equities |
HousingStructural shortage of housing in the USA with higher mortgage rates reducing existing home supply as homeowners are locked into low-rate mortgages. New homebuilders capturing increasing share of home sales as they can buy-down mortgages to lower rates. |
Homebuilders Building Materials Mortgage Construction | |
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 |
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 |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Oct 21, 2025 | Fund Letters | Matthew Fine | CS | CCO Capstone Copper Corp. | Materials | Copper Mining | Bull | NYSE | Chile, Copper, expansion, FCF, Production, Supply, valuation | Login |
| Oct 21, 2025 | Fund Letters | Matthew Fine | LUN | Lundin Mining Corp. | Materials | Copper & Gold Mining | Bull | NYSE | cash flow, Copper, Gold, Hedge, Mining, Operations | Login |
| Oct 21, 2025 | Fund Letters | Matthew Fine | HBR | Harbour Energy plc | Energy | Oil & Gas Exploration & Production | Bull | NYSE | cash flow, Gas, North sea, oil, Regulation, Taxation | Login |
| Oct 21, 2025 | Fund Letters | Matthew Fine | OR | Old Republic International Corp. | Materials | Property & Casualty Insurance | Bull | NYSE | capital return, Insurance, turnaround, underwriting, valuation | Login |
| Oct 21, 2025 | Fund Letters | Matthew Fine | DBK | Deutsche Bank AG | Financials | Banks | Bull | - | banking, capital return, restructuring, ROE, turnaround | Login |
| Oct 21, 2025 | Fund Letters | Matthew Fine | BOISE | Boise Cascade Co. | Other | Building Materials | Bull | NYSE | Building materials, cash, consolidation, Housing, valuation | Login |
| Oct 21, 2025 | Fund Letters | Matthew Fine | ROG | Rogers Corporation | Information Technology | Electronic Components | Bull | NYSE | Activism, electronics, EV, Margins, materials, restructuring | Login |
| Oct 21, 2025 | Fund Letters | Matthew Fine | AC | AC Ayala Corporation | Industrials | Diversified Holdings | Bull | Philippine Stock Exchange | assets, buybacks, conglomerate, Emerging markets, Philippines, valuation | Login |
| Jul 22, 2025 | Fund Letters | Matthew Fine | CRE LN | Conduit Holdings Limited | Financials | Reinsurance | Bull | New York Stock Exchange | Bookvalue, recovery, Reinsurance, underwriting, Volatility | Login |
| TICKER | COMMENTARY |
|---|---|
| 0001.HK | The Fund has owned shares of CK Hutchison for many years over which time the company has created a significant amount of value through operational income from its varied business lines, but also through well-timed business purchases and dispositions. There is, in our view, considerable shareholder alignment with the controlling Li family who built CK Hutchison and continues to control the company today. What is new, in our view, is a generational change of family leadership and a likely frustration with serial undervaluation in recent years. Several bold resource conversion transactions appear to be in the works, the most high-profile of which is CK Hutchison's ongoing effort to sell one of the world's largest and most valuable portfolios of container terminals. When viewed collectively, CK Hutchison is actively pursuing large-scale, value-creating or value-realizing transactions within each of its largest business units, representing the vast majority of its underlying business value. |
| 2603.TW | During the quarter ending December 31, 2025, the Fund initiated a position in T.S. Lines Ltd. T.S. Lines Ltd. is a container shipping company founded during a shipping downturn in the early 2000s. The company focuses on routes within the Asia-Pacific region, with an enviable share of shipping volumes occurring between China and Southeast Asia. While the routes T.S. Lines serves have historically been lower growth, trade activity between China and Southeast Asia is projected to grow faster than other shipping lanes over the next several years due, in part, to the reordering of historical global trade flows. The company's balance sheet is strong, with a large net cash position with which the company can finance its planned fleet expansion. T.S. Lines' current market valuation also appears attractive. The stock trades at a discount to the replacement value of its nearly new fleet, even without contemplating the growing scarcity value of its fleet. |
| BIRG.L | Bank of Ireland and Horiba rounded out the Fund's list of largest performance contributions for the quarter. As has been the case for much of 2025, the Fund's Western European holdings, such as Bank of Ireland, Buzzi Spa and BMW, each contributed to fourth quarter performance in a positive and significant way. In recent years, our two European bank holdings, Bank of Ireland and Deutsche Bank, have benefited from dramatically improved operating performance, which has led to a growing appreciation of their abilities to generate attractive returns on capital. The Fund materially reduced the weight of its holdings in Deutsche Bank and Bank of Ireland during the year. |
| CMA | During the quarter, long-time Fund holding Comerica became subject to activist shareholder pressure to maximize shareholder value through a sale process. Shortly thereafter, Comerica became the subject of a takeover offer by larger regional bank, Fifth Third Bancorp. To be very blunt, Comerica has not been a particularly well-run bank, in our view. However, it was quite a decent investment for the Fund, in no small part because we materially added to our position during the Spring 2023 regional banking crisis. The takeover transaction led to Comerica producing one of the Fund's larger contributions to performance during the quarter and we have since exited the investment. |
| CS | During the fourth quarter and full-year 2025, Lundin Mining and Capstone Copper provided two of the Fund's largest contributions to performance. We have been optimistic, over a long holding period for both companies, that the indispensable nature of copper to modern economies and the exceptional difficulty of maintaining current global supply would become better appreciated. When the Fund's portfolio management team assumed responsibility for the Fund at the end of 2017, both Capstone Copper and Lundin Mining were among the earliest investments made. |
| DB | In recent years, our two European bank holdings, Bank of Ireland and Deutsche Bank, have benefited from dramatically improved operating performance, which has led to a growing appreciation of their abilities to generate attractive returns on capital. Happily, both banks have made a huge amount of progress in their reputational escape from being perceived as low-quality, low-return, low-growth businesses burdened by an increasingly stringent regulatory environment. Today, both companies are increasingly seen as highly profitable, well-managed, excessively capitalized banks poised to continue ramping returns of capital to shareholders as capital continues to accumulate and regulatory burdens ease somewhat. Deutsche Bank shares have traded above their book value for the first time since the start of the global financial crisis. The Fund materially reduced the weight of its holdings in Deutsche Bank and Bank of Ireland during the year. |
| HBR.L | While we have only owned Harbour since the summer of 2024, it has been a very eventful holding period. A significant part of our investment thesis has revolved around a highly competent management team with a well-conceived counter-cyclical acquisition strategy. At the end of 2024, the company completed an unusually attractive transformative acquisition that had been announced some months before we initiated our investment. More recently, the company undertook a flurry of activity in December 2025. First, the company agreed to sell its interests in two fields in Indonesia, which represented smaller, non-strategic assets for the company, though the transaction proceeds furthered Harbour's financial ability to execute future transactions. The future came just a matter of days later when Harbour announced a clever acquisition of a small U.K. North Sea producer. Later in the same month, Harbour announced a large acquisition of a family-controlled U.S. offshore deepwater producer based in Louisiana. |
| HCC | Warrior Met Coal is a leading metallurgical coal producer (coal used to steel production). There has been minimal worldwide met coal resource development over the last 10 years which could lead to tight supply (higher pricing) when steel production improves. Currently the bulk of HCC's FCF is being invested in a capital project that will be largely concluded in 2025 and is ahead of schedule. Once the business winds down their investment period they will gush cash. HCC's existing mines should generate $100-$350MM in annual free cash flow. Blue Creek development is wrapping up by the beginning of 2026 and at mid-cycle should generate $200-$500MM in additional free cash flow. The combined assets should generate $300MM-$850MM in free cashflow with non-heroic pricing and volume assumptions. This equates to ~$6-$16 in annual per share cash generation vs. a price of ~$88 or a 7-18% unlevered annual free-cashflow yield. 2026 should be a sea-change in their free-cash-flow generation. |
| IFP.TO | Canadian lumber producer Interfor (IFP-CA) was one of only two positions that negatively impacted the fund performance by more than half a percentage point in 2025. The company had uncomfortable levels of debt entering 2025 and was negatively impacted by the rapid increase in US trade barriers. |
| LUN.TO | During the fourth quarter and full-year 2025, Lundin Mining and Capstone Copper provided two of the Fund's largest contributions to performance. We have been optimistic, over a long holding period for both companies, that the indispensable nature of copper to modern economies and the exceptional difficulty of maintaining current global supply would become better appreciated. During the last couple of years, we would say that a growing awareness has begun. |
| TDW | Tidewater is a marine services firm that operates one of the world's largest fleets of offshore support vessels (OSV's). They serve the energy industry by transporting crew and supplies, towing and anchoring drillships and supporting offshore construction projects. The long-term outlook for international and offshore markets is strong while the near-term is a little cloudier. What's striking about this industry is the lack of investment in the OSV fleet. Since the GFC, global shipyard capacity has shrunk by nearly 60%. Over the next decade, as fleets age, the global OSV market is expected to shrink by ~40%. We do not have to bank on that as they are currently generating $300MM+ in FCF vs. a $2.5bb market cap or a 12% yield. In a more normal environment, I'd expect them to generate 500mm-1bb which gets to ~20-40% yields. |
| VAL | Examples include Tidewater, Valaris, Constellation Brands, Diageo and Trex. We have discussed TDW and VAL previously. VAL: ~$75M repurchased in the most recent quarter; ~$600M program ongoing |
| Ticker | Put/Call | Amount Bought | Shares Bought | % Change | Weight % |
|---|---|---|---|---|---|
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