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Quarter	Letter Date	Fund Name	QTD	YTD	Tickers	Themes	Quick Take

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Hosking Partners 2025 Q1 Investor Letter | Buyside Digest

Back to Fund Profile (Hosking Partners)

Primary Source Intelligence • Q1 2025 Letter Analysis

Hosking Partners Quarterly Analysis

Buyside Digest is not affiliated with, and does not endorse, Hosking Partners. This analysis is provided for institutional research purposes only and is not investment advice.

Fund Returns

Positioning StanceConstructive

GeographyUS, Emerging markets

Digest Analysis

Quick Take

"Hosking Partners applies Capital Cycle discipline positioning for regime change away from US megacap domination. Strategy maintains value focus with Japan overweight and Magnificent Seven underweight to 3%."

Executive Summary

Hosking Partners applies Capital Cycle discipline during extreme market uncertainty, seeking companies trading at discounts to replacement value while avoiding overvalued areas. The strategy benefited from regional allocation with 27.2% US underweight, 10.0% Japan overweight, and 4.9% emerging markets overweight. Top contributors included Babcock, Impala Platinum, and Hikari Tsushin, while US Financials and cyclical businesses detracted. The team positioned further into value territory, reducing Magnificent Seven exposure to 3% versus 19% benchmark weight, fully exiting Nvidia and trimming AI-related semiconductor holdings as valuations no longer reflect inherent cyclicality. Japan represents attractive opportunity with corporate governance reform reaching tipping point and most companies trading below book value. Energy and Materials exposure maintained despite volatility as supply dynamics differ fundamentally from previous downturns. Markets undergo regime change away from US megacap domination, with tariff uncertainty creating both risks and opportunities for repositioning toward value businesses with different supply dynamics.

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Institutional Meta Strategy

Meta Strategy Gauges

Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.

Signal Matrix

Market Conviction

75%

CautiousHigh

High Conviction (75%)

High conviction evident in concentrated regional bets (27% US underweight, Japan focus), complete Nvidia exit, and five-year positioning for regime change. Strong belief in Capital Cycle framework and value approach despite near-term uncertainty.

Growth Outlook

38%

BearishBullish

Neutral (38%)

Manager expresses caution about extreme uncertainty and regime change while acknowledging attractive opportunities in specific regions like Japan. Mixed outlook with both risks from tariffs/recession and opportunities from market dislocation.

Risk Appetite

15%

DefensiveAggressive

Defensive (15%)

Strategy maintains risk-on positioning in cyclical sectors like Energy (11%) and Materials (13%) despite volatility, while using market weakness to upgrade exposures. Balanced approach with selective risk-taking.

Capital Deployment

20%

De-riskingDeploying

De-risking (20%)

Strategy remains essentially fully invested while actively upgrading positions within cyclical sectors. Made largest quarterly purchase in International Petroleum and added to Tidewater, indicating selective deployment despite market volatility.

Forward Guidance

30%

CautiousExpansionary

Cautious (30%)

Manager expresses confidence in five-year positioning for regime change and plans to use market wreckage to find long-term opportunities. Constructive bias toward deploying capital into value situations.

Language Signal

10%

BearishBullish

Bearish (10%)

Language balances opportunity-focused terms like attractive, compelling, upside with risk-aware language about uncertainty and regime change. Slightly positive net balance toward opportunity identification.

Perceived Risk

70%

Low RiskElevated

Elevated Risk (70%)

Manager acknowledges exponentially growing uncertainty, unknown unknowns, tariff risks, and potential recession scenarios. High awareness of systemic risks while maintaining conviction in positioning approach.

Opportunity Density

65%

ScarceAbundant

Abundant (65%)

Manager sees selective opportunities in Japan corporate governance reform, value dislocations from market volatility, and ability to upgrade cyclical exposures. Moderate opportunity set focused on specific themes and regions.

Time Horizon

80%

Short-TermLong-Term

Decade+ (80%)

Strategy positioned for five-year regime change with focus on long-term opportunities and compounding value businesses. Patient capital approach evident in multi-year Japan thesis and Capital Cycle framework application.