Longleaf Partners, managed by Southeastern Asset Management, released its “Partners Fund” third-quarter 2025 investor letter. The letter can be downloaded here. The fund returned -0.33% in the third quarter, compared to the S&P 500’s 8.12 % return and the Russell 1000 Value’s 5.33% return. The firm is not happy with the flat performance of the portfolio, emphasizing its investments in real assets and brands that generate growing free cash flow (FCF) per share. Despite facing market pressures from speculation and government uncertainty, it anticipates that the Fund’s ~10x FCF multiple could rise to the mid-teens as management implements strategies to improve margins and increase share repurchases. For more information on the fund’s best picks in 2025, please check its top five holdings.
In its third-quarter 2025 investor letter, Longleaf Partners Fund highlighted stocks such as PotlatchDeltic Corporation (NASDAQ:PCH). PotlatchDeltic Corporation (NASDAQ:PCH) is a Real Estate Investment Trust (REIT) that owns nearly 2.1 million acres of timberlands. The one-month return of PotlatchDeltic Corporation (NASDAQ:PCH) was 5.57%, and its shares gained 0.50% of their value over the last 52 weeks. On October 23, 2025, PotlatchDeltic Corporation (NASDAQ:PCH) stock closed at $42.33 per share, with a market capitalization of $3.27billion.
Longleaf Partners Fund stated the following regarding PotlatchDeltic Corporation (NASDAQ:PCH):
“Rayonier and PotlatchDeltic Corporation (NASDAQ:PCH): These two complementary investments are newer holdings for the Fund, but we have owned both high-quality timberland companies before. Both companies were trading at large discounts when we were buying and had multiple ways to win. We were excited to see them announce a merger of equals after quarter end. This is a rare example of win/win M&A with real synergies that grow the value per share of the pro forma company. We applaud both companies for taking action to be even more on offense going forward.