Alphyn Capital Management, an investment management firm, released its third-quarter 2025 investor letter. A copy of the letter can be downloaded here. The Master Account of the fund returned 3.0% net in the third quarter compared to 8.1% for the S&P 500 Index. As of the third quarter of 2025, the top ten holdings accounted for approximately 68% of the portfolio, and approximately 17% of the portfolio was held in cash. The market narrative was dominated by AI advancements, credit cycles, and geopolitical uncertainty in the quarter. The firm focuses on compound value through disciplined reinvestment and operational excellence. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its third-quarter 2025 investor letter, Alphyn Capital Management highlighted stocks such as Fairfax Financial Holdings Limited (OTC:FRFHF). Fairfax Financial Holdings Limited (OTC:FRFHF) is an insurance company that offers property and casualty insurance and reinsurance, and investment management services. The one-month return of Fairfax Financial Holdings Limited (OTC:FRFHF) was -4.36%, and its shares gained 32.30% of their value over the last 52 weeks. On October 27, 2025, Fairfax Financial Holdings Limited (OTC:FRFHF) stock closed at $1,662.03 per share, with a market capitalization of $36.962 billion.
Alphyn Capital Management stated the following regarding Fairfax Financial Holdings Limited (OTC:FRFHF) in its third quarter 2025 investor letter:
“Fairfax Financial Holdings Limited (OTC:FRFHF): Fairfax’s fundamental performance remains impressive, despite the modest share price pullback in Q3, a natural consolidation following its significant multi-year run. The Q2 results, reported in July, underscored this strength, driving book value per share up 10.8% year-to-date to $1,158, supported by a disciplined 93.3% combined ratio and strong investment results.
The company has established a significantly higher and more durable earnings baseline than before 2021. As I’ve noted previously, earnings quality has also markedly improved, with the majority of income now generated by predictable sources like interest, dividends from associates, and underwriting. This structure makes Fairfax significantly more resilient to the P/C insurance cycle than traditional peers.
As the hard market inevitably softens, it is helpful to remember Fairfax’s strong track record of capital allocation. They focus on buying more of what they already own at good prices. Since 2021, they have deployed $6.5 billion into buybacks ($3.2B) and acquiring minority stakes in core subsidiaries ($3.3B). The buybacks alone cut the share count by 17% well below book value. This approach directly boosts per-share value by increasing earnings while reducing the share count. This discipline is also evident in their counter-cyclical management. They acquired aggressively during the 2014-2019 soft market when assets were cheap and pivoted to organic growth during the recent hard market when margins were high.”
Fairfax Financial Holdings Limited (OTC:FRFHF) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 1 hedge fund portfolios held Fairfax Financial Holdings Limited (OTC:FRFHF) at the end of the second quarter, up from 1 in the previous quarter. While we acknowledge the risk and potential of Fairfax Financial Holdings Limited (OTC:FRFHF) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Fairfax Financial Holdings Limited (OTC:FRFHF) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
