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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
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"The Third Avenue Small-Cap Value Fund outperformed in Q4 2025 and is actively leveraging its 'owner-operator' framework to pressure UniFirst to accept Cintas' buyout, while initiating a contrarian new position in Flagstar Bank."
The Third Avenue Small-Cap Value Fund returned 4.62% in Q4 2025, outperforming the MSCI USA Small Cap Value Index, and finished the year up 14.04%. Positive performance was led by Kaiser Aluminum, Collegium Pharmaceutical, and Encore Capital, while housing-related holdings and UMB Financial lagged. The managers spent a significant portion of the commentary detailing their 'owner-operator' framework for evaluating management as operators, investors, and financiers. This framework was applied to the active takeover battle for portfolio holding UniFirst, where the managers are strongly advocating for the board to accept Cintas' $275/share cash bid rather than proceeding with a risky standalone operational recovery. On the transaction front, the Fund initiated a new position in Flagstar Bank, NA at a deep discount to tangible book value, exited Seaboard, and added to several existing positions including Alamo Group, Octave Specialty Group, and ICF International.
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