Greenhaven Associates Portfolio Q2'2025: Top Holdings & Recent Changes
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Edgar Wachenheim III, founder of Greenhaven Associates, continues to demonstrate disciplined value investing through strategic position management in his Q2 2025 portfolio. With $6.7 billion deployed across just 25 positions, Wachenheim's latest 13F filing reveals a concentrated bet on cyclical value opportunities, particularly in financial services and homebuilding stocks that the market appears to be undervaluing. The portfolio's significant weighting toward these sectors reflects a contrarian stance on economic recovery and housing market strength.
Ultra-Concentrated Portfolio Architecture
Portfolio Highlights (Q2 2025): - Market Value: $6,721.6M - Top 10 Holdings: 93.2% - Portfolio Size: 25 -1 - Average Holding Period: 20 quarters - Turnover: 12.0%
Greenhaven Associates exemplifies the concentrated value investing approach that has defined Edgar Wachenheim's career. With the top 10 holdings commanding 93.2% of the portfolio, this structure reflects extraordinary conviction in a select group of businesses. The average holding period of 20 quarters—five full years—demonstrates patience that stands in stark contrast to today's trading-dominated market environment.
The portfolio reduction to 25 positions (down one from the previous quarter) and modest 12.0% turnover rate signal a manager comfortable letting winners run while maintaining discipline around position exits. This approach aligns with classic value investing principles: identify mispriced assets, build meaningful positions, and hold through market cycles until fair value is realized.
Strategic Holdings Reveal Cyclical Value Thesis
The portfolio reveals a clear thematic focus on cyclical recovery and financial sector opportunities. Citigroup, the portfolio's largest position at 20.5%, saw a 2.94% reduction as Wachenheim took some profits while maintaining substantial exposure to the banking giant's restructuring story. General Motors 17.3% experienced a modest 0.53% trim, reflecting continued conviction in the automotive manufacturer's transition to electric vehicles and improving margins.
The homebuilding sector dominates the middle tier of holdings, with Lennar Corporation 15.6% receiving a 0.57% addition to become the third-largest position. Toll Brothers 9.5% saw a 0.71% increase, the largest percentage add among top holdings, signaling growing confidence in luxury homebuilding demand. PulteGroup 8.8% experienced a minor 0.12% reduction, while D.R. Horton 7.1% received a 0.17% addition, rounding out the homebuilding quartet.
Industrial exposure comes through Oshkosh Corp 4.3%, which received a small 0.03% addition, maintaining steady exposure to the defense and specialty vehicle manufacturer. The technology distribution sector appears through Arrow Electronics 3.6% and Avnet 3.1%, both experiencing minor 0.06% reductions as Wachenheim trims these electronic component distributors. Millrose Properties 3.3% saw a negligible 0.01% reduction, maintaining exposure to this real estate investment position.
What the Portfolio Reveals About Current Strategy
The Q2 2025 positioning reflects several strategic themes that define Greenhaven's investment philosophy:
Cyclical Recovery Conviction: The heavy weighting toward homebuilders and financials demonstrates belief that these sectors remain undervalued relative to normalized earnings power. With housing inventory still constrained and demographic tailwinds supporting household formation, the homebuilder positions represent a bet on sustained industry profitability despite interest rate concerns.
Financial Sector Restructuring: The Citigroup position, despite the modest trim, remains the portfolio's anchor. This reflects confidence in CEO Jane Fraser's simplification strategy and the bank's path toward improved returns on tangible equity. The scale of this position—over 20% of the portfolio—demonstrates conviction that current valuations don't reflect Citi's earnings potential once restructuring bears fruit.
Quality Over Growth: The average 20-quarter holding period and low turnover rate reveal a manager focused on business quality and price discipline rather than momentum or growth narratives. Wachenheim's approach prioritizes companies with strong competitive positions, capable management teams, and valuations that provide margin of safety.
Sector Concentration as Edge: Rather than diversifying broadly, Greenhaven concentrates in sectors where Wachenheim believes he possesses informational or analytical advantages. The homebuilding cluster represents deep industry knowledge built over decades, while the financial services exposure reflects expertise in analyzing bank balance sheets and credit cycles.
Edgar Wachenheim's Investment Legacy
Edgar Wachenheim III founded Greenhaven Associates in 1987 and has built a reputation as one of value investing's most disciplined practitioners. His approach emphasizes fundamental analysis, patient capital deployment, and willingness to concentrate in high-conviction ideas. Unlike many modern fund managers who feel pressure to diversify broadly, Wachenheim has consistently maintained focused portfolios that reflect genuine conviction rather than index-aware positioning.
The firm's long-term track record demonstrates the power of this concentrated approach, with Wachenheim often holding positions for five to ten years or longer. This patience allows him to ride out short-term volatility and benefit from the eventual recognition of intrinsic value. His success with previous long-term holdings has established Greenhaven as a fund worth following for investors interested in classic value investing principles applied with discipline.
Portfolio Concentration Analysis
| Position | Value | % of Portfolio | Recent Change |
|---|---|---|---|
| Citigroup Inc (C) | $1,376.9M | 20.5% | Reduce 2.94% |
| General Motors Co (GM) | $1,164.0M | 17.3% | Reduce 0.53% |
| Lennar Corporation - A (LEN) | $1,050.1M | 15.6% | Add 0.57% |
| Toll Brothers, Inc. (TOL) | $639.3M | 9.5% | Add 0.71% |
| PulteGroup Inc. (PHM) | $588.5M | 8.8% | Reduce 0.12% |
| D R Horton, Inc. (DHI) | $474.6M | 7.1% | Add 0.17% |
| Oshkosh Corp (OSK) | $290.0M | 4.3% | Add 0.03% |
| Arrow Electronics Inc (ARW) | $243.7M | 3.6% | Reduce 0.06% |
| Millrose Properties (MRP) | $224.9M | 3.3% | Reduce 0.01% |
The concentration metrics tell a compelling story about portfolio construction philosophy. The top three positions—Citigroup, General Motors, and Lennar—represent 53.4% of total assets, while the top 10 holdings command 93.2% of the portfolio. This structure leaves minimal room for diversification plays or opportunistic positions, instead reflecting absolute conviction in the core thesis.
The quarter's activity shows tactical position management rather than dramatic portfolio restructuring. The modest reductions in Citigroup and General Motors likely reflect profit-taking and rebalancing rather than fundamental thesis changes, while the additions to homebuilders suggest Wachenheim is leaning into housing sector exposure despite broader market concerns about affordability and interest rates.
Investment Lessons from Edgar Wachenheim's Approach
Greenhaven's portfolio demonstrates several timeless principles that retail investors can apply to their own investing:
Concentration Requires Conviction: Meaningful position sizes demand deep fundamental research and conviction in your analysis. Wachenheim's willingness to allocate over 20% to Citigroup reflects years of studying the business, management, and industry dynamics. This level of concentration isn't reckless—it's the natural outcome of high-quality research meeting attractive valuations.
Patience Compounds Returns: The 20-quarter average holding period demonstrates that wealth creation often requires riding through multiple market cycles. Short-term volatility becomes noise when you're holding businesses purchased at significant discounts to intrinsic value. This patience also provides tax advantages through long-term capital gains treatment and avoids the return drag of excessive trading costs.
Cyclical Investing Demands Contrarianism: The heavy homebuilder weighting reflects willingness to lean into sectors facing skepticism. When everyone worries about interest rates and affordability, that's often when cyclical stocks offer the best risk-reward. Wachenheim's additions to Toll Brothers and other builders suggest he's finding value where others see only risk.
Sector Expertise Creates Edge: Rather than spreading positions across every sector, Greenhaven concentrates where Wachenheim has developed deep expertise. This focused approach allows for more nuanced analysis and better understanding of competitive dynamics, creating informational advantages over generalist investors who touch every industry superficially.
Low Turnover Reduces Friction: The 12.0% quarterly turnover rate translates to roughly 48% annual turnover, meaning the average position is held for about two years before being sold. This measured pace minimizes transaction costs and tax drag while allowing time for investment theses to play out. For retail investors, emulating this patience can significantly improve after-tax returns.
Looking Ahead: What Comes Next?
The Q2 2025 positioning sets up several interesting scenarios for Greenhaven's portfolio heading into the second half of 2025. The homebuilder cluster's performance will depend heavily on mortgage rate trends and housing inventory dynamics, both of which remain uncertain given Federal Reserve policy deliberations. If rates stabilize or decline, these positions could deliver substantial returns as earnings multiples expand from current compressed levels.
The Citigroup position presents perhaps the most significant individual stock catalyst opportunity. As Fraser's restructuring initiatives continue rolling out through 2025 and 2026, the market will eventually need to revalue the stock based on improved returns on equity and streamlined operations. The question is whether Wachenheim will maintain this oversized position as the price appreciates, or begin trimming more aggressively to rebalance the portfolio.
The modest portfolio reduction to 25 positions suggests Wachenheim isn't finding compelling new opportunities at current market valuations. This defensive positioning—concentrating further in existing high-conviction holdings rather than adding new names—reflects a manager comfortable with his current bets but cautious about deploying capital into unproven ideas at potentially inflated prices.
FAQ about Greenhaven Associates Portfolio
Q: Why did Greenhaven reduce Citigroup if it remains the largest position?
The 2.94% reduction in Citigroup likely represents portfolio rebalancing and profit-taking rather than a change in fundamental thesis. When a position appreciates significantly and grows beyond target allocation levels, prudent managers trim to maintain risk management discipline. The fact that Citigroup still represents over 20% of the portfolio demonstrates continued conviction in the restructuring story and valuation opportunity.
Q: What explains the heavy concentration in homebuilding stocks?
Greenhaven's 40%+ allocation across Lennar, Toll Brothers, PulteGroup, and D.R. Horton reflects conviction that housing fundamentals remain strong despite interest rate concerns. Wachenheim likely sees compressed valuations that don't reflect normalized earnings power, constrained supply supporting pricing power, and demographic tailwinds from millennial household formation. This sector concentration represents classic value investing—buying cyclical businesses when sentiment is negative but fundamentals are improving.
Q: How can retail investors follow Edgar Wachenheim's portfolio moves?
Investors can track Greenhaven's portfolio through quarterly 13F filings, which are typically released 45 days after quarter-end. ValueSense provides real-time tracking of superinvestor portfolios at valuesense.io/superinvestors/greenhaven, offering detailed position breakdowns, historical changes, and performance analytics. However, remember that 13F filings only capture long equity positions above $200,000 and don't reveal short positions, options, or international holdings.
Q: Should retail investors replicate Greenhaven's concentrated portfolio approach?
While Greenhaven's concentration demonstrates the power of conviction-weighted portfolios, retail investors should carefully consider their own risk tolerance and analytical capabilities before replicating such concentration. Wachenheim manages a $6.7 billion portfolio with institutional research resources and decades of experience. Most retail investors would benefit from somewhat broader diversification while still maintaining meaningful position sizes in their highest-conviction ideas. A middle ground might involve 15-20 positions rather than Greenhaven's 25, providing concentration benefits while managing single-stock risk.
Q: What does the low turnover rate tell us about Greenhaven's strategy?
The 12.0% quarterly turnover (roughly 48% annually) reflects a buy-and-hold philosophy focused on long-term wealth creation rather than tactical trading. This approach minimizes transaction costs, provides tax efficiency through long-term capital gains treatment, and allows investment theses sufficient time to play out. The 20-quarter average holding period demonstrates patience in letting undervalued businesses realize their intrinsic value, even if that process takes years. This low-turnover approach has historically been associated with superior long-term returns in value investing.
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