Here’s Silver Beech Capital’s Updates on Fairfax Financial Holdings Ltd (FRFHF)

Silver Beech Capital, a value-oriented investment management firm, released its second-quarter 2025 investor letter. A copy of the letter can be downloaded here. Since its inception, Silver Beech has achieved a net annualized return of 19.9%, representing an annualized outperformance of 6.9% over the S&P 500. The fund was up 0.3% through the second quarter of 2025, compared to the S&P 500’s 6.2% return and the Russell 2000’s 1.8% decline. The United States’ economic fundamentals remain strong, and financial markets are optimistic. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its second-quarter 2025 investor letter, Silver Beech Capital 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 0.85%, and its shares gained 44.74% of their value over the last 52 weeks. On September 05, 2025, Fairfax Financial Holdings Limited (OTC:FRFHF) stock closed at $1,716.00 per share with a market capitalization of $38.52 billion.

Silver Beech Capital stated the following regarding Fairfax Financial Holdings Limited (OTC:FRFHF) in its second quarter 2025 investor letter:

“Fairfax Financial Holdings Limited (OTC:FRFHF), a Toronto-based global property and casualty (P&C) insurance and reinsurance conglomerate, operates a decentralized insurance model with a centralized investment approach. Its autonomous insurance units generate substantial premiums, or “float,” which Fairfax’s investment team deploys across public and private markets. This disciplined strategy has delivered exceptional results: over nearly four decades, Fairfax has achieved an average return on equity (ROE) exceeding 16% and a stock price compounded annual growth rate (CAGR) of approximately 18%.

In July 2023, Silver Beech established a position in Fairfax at a valuation we deemed significantly undervalued. This decision followed an in-depth thematic study of “float-based” business models, which helped us build conviction in their resilience and earnings power in a rising interest rate environment. During the zero-interest rate policy (ZIRP) era post-Great Financial Crisis and COVID, float held limited value due to low time value of money. However, the sharp interest rate hikes in 2022 to curb inflation created a powerful tailwind for float-driven models. Fairfax stood out with the highest float-per-share among insurers and a prescient strategy of holding short-duration credits during ZIRP, enabling profitable reinvestment into higher-yielding, longer-duration credits with minimal capital losses as rates rose…” (Click here to read the full text)

In addition, please check out our hedge fund investor letters Q2 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.