Longleaf Partners Small-Cap Fund’s Q2 2026 Investor Letter

Longleaf Partners, managed by Southeastern Asset Management, released its second-quarter 2026 investor letter for its “Small-Cap Fund”. The letter states that the portfolio holdings are attractive now based on both P/V and P/FCF metrics; however, market winners have gone far higher than fair value. The Fund returned -2.47% in the quarter, underperforming the 21.49% return for the Russell 2000 Index and the 17.19% gain for the Russell 2000 Value Index. The underperformance in the quarter was driven by unexpected moves primarily in the IT and industrials sectors and the market’s favor for speculative stocks. The Firm’s investment approach focuses on median, unweighted multiples, prioritizing growth in free cash flow per share, the potential for multiple expansion, and strategic initiatives. In addition, please check the Fund’s top five holdings to know its best picks in 2026.

A copy of Longleaf Partners Small-Cap Fund’s Q2 2026 investor letter can be downloaded here.

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