Third Avenue Management Portfolio Q2'2025: Top Holdings & Recent Changes
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Third Avenue Management, the value-focused investment firm founded by Martin J. Whitman, continues to demonstrate its commitment to deep value investing in Q2 2025. Their $484.9 million portfolio reflects a disciplined, contrarian approach, with notable moves in energy, real estate, and financial services. The firm’s latest 13F filing reveals both conviction in select cyclical sectors and a willingness to trim positions where valuations have become less compelling—a hallmark of Third Avenue’s long-term, patient strategy.
Portfolio Overview: Focused Value in a Diversified Basket
Portfolio Highlights (Q2 2025): - Market Value: $484.9 million - Top 10 Holdings: 49.2% of portfolio - Portfolio Size: 52 positions (down 9 from prior quarter) - Average Holding Period: 22 quarters (over 5 years) - Turnover: 28.8%
Third Avenue’s portfolio remains diversified yet concentrated in its highest-conviction ideas, with nearly half the assets in the top 10 holdings. The firm’s low turnover and long average holding period underscore a patient, buy-and-hold philosophy—consistent with founder Martin Whitman’s emphasis on “safe and cheap” investing. The reduction in portfolio size suggests a continued focus on quality over quantity, pruning weaker positions to concentrate capital in the most attractive opportunities.
Holdings Overview: Energy, Real Estate, and Financials Lead the Way
Third Avenue’s Q2 2025 portfolio is anchored by a mix of energy services, real estate, and financial stocks, with several notable changes signaling shifting convictions. Tidewater Inc. (TDW) saw the most significant addition, up 8.14% to become the second-largest holding at 8.3% of the portfolio, reflecting strong conviction in the offshore energy services recovery. Warrior Met Coal, Inc. (HCC) and Valaris Limited (VAL) also received meaningful additions, up 4.64% and 2.82% respectively, further emphasizing the firm’s bullish stance on energy and commodities.
In contrast, Deutsche Bank AG saw a sharp reduction of 29.43%, likely reflecting profit-taking or a reassessment of the European banking giant’s risk/reward profile. CBRE Group, Inc. and Jones Lang Lasalle were also trimmed slightly, suggesting a more cautious view on commercial real estate services amid shifting market dynamics.
Real estate remains a core theme, with Five Point Holdings LLC - Class A and Lennar Corp - Class B both held steady or increased modestly, while Prologis Inc. received a substantial 12.67% boost, indicating renewed confidence in industrial REITs. U-Haul Holding Company and Sun Communities Inc. were also added, rounding out a diversified real estate exposure.
Outside the top 10, Third Avenue added to positions in U-Haul Holding Company (up 3.86%) and Sun Communities Inc. (up 7.16%), while reducing Jones Lang Lasalle (down 0.58%). Brookfield Corp. and Five Point Holdings LLC - Class A were held unchanged, demonstrating patience with these long-term holdings.
What the Portfolio Reveals
Third Avenue’s Q2 2025 moves highlight several strategic themes:
- Cyclical Conviction: The firm is doubling down on energy services and commodities, sectors often overlooked by mainstream investors but offering deep value in the current cycle.
- Real Estate Resilience: Despite trimming some commercial real estate services, Third Avenue is increasing exposure to industrial and residential REITs, betting on structural demand drivers.
- Financials Rebalancing: The sharp reduction in Deutsche Bank suggests a tactical shift, possibly due to valuation or macro concerns, while maintaining other financial exposures.
- Quality Over Quantity: The portfolio is becoming more concentrated, with fewer positions and higher conviction in top holdings.
- Patient Capital: The average holding period of 22 quarters reflects a true buy-and-hold mentality, avoiding short-term noise in favor of long-term intrinsic value.
Portfolio Concentration Analysis
| Position | Value | % of Portfolio | Recent Change |
|---|---|---|---|
| Tidewater Inc. (TDW) | $40.4M | 8.3% | Add 8.14% |
| Deutsche Bank AG | $30.2M | 6.2% | Reduce 29.43% |
| Warrior Met Coal, Inc. (HCC) | $29.4M | 6.1% | Add 4.64% |
| Valaris Limited (VAL) | $24.7M | 5.1% | Add 2.82% |
| Brookfield Corp. | $23.4M | 4.8% | No change |
| CBRE Group, Inc. | $23.1M | 4.8% | Reduce 0.24% |
| Five Point Holdings LLC - CL A | $22.7M | 4.7% | No change |
| Lennar Corp - Class B | $15.6M | 3.2% | Add 0.18% |
| Prologis Inc. | $15.3M | 3.2% | Add 12.67% |
The top 10 holdings account for nearly half the portfolio, but no single position dominates—a hallmark of Third Avenue’s disciplined diversification. The most significant changes were in energy services (Tidewater, Warrior Met Coal, Valaris) and real estate (Prologis), while financials saw selective trimming. This concentration-within-diversification approach allows for meaningful exposure to high-conviction ideas without excessive single-stock risk.
Investment Lessons from Third Avenue’s Value Strategy
Third Avenue’s portfolio offers several timeless lessons for value investors:
- Focus on Intrinsic Value: The firm’s moves are driven by a rigorous assessment of intrinsic value, not short-term price movements.
- Patience Pays: An average holding period of over five years demonstrates the power of patience in compounding returns.
- Contrarian Courage: Adding to energy and commodities when others are fearful reflects a willingness to go against the crowd.
- Portfolio Pruning: Reducing or eliminating weaker positions keeps the portfolio focused on the best opportunities.
- Sector Agnosticism: Third Avenue is unafraid to invest across sectors, so long as the valuation and business quality meet its criteria.
Looking Ahead: What Comes Next?
With a portfolio that’s both concentrated and patient, Third Avenue is well-positioned to capitalize on any market dislocations. The firm’s energy and real estate bets could benefit from a cyclical recovery, while its financials exposure provides balance. The reduction in portfolio size suggests dry powder may be available for new opportunities, and investors should watch for further additions in undervalued sectors.
FAQ about Third Avenue Management Portfolio
Q: How can I track Third Avenue’s portfolio changes in real time?
A: Third Avenue’s holdings are disclosed quarterly via 13F filings, which are published 45 days after quarter-end. For the most up-to-date tracking and analysis, platforms like ValueSense aggregate and visualize these filings, making it easy to follow superinvestor moves.
Q: Why did Third Avenue reduce its Deutsche Bank position so sharply?
A: While the exact rationale isn’t public, such a large reduction often signals a reassessment of risk/reward, profit-taking after a rally, or a shift in sector outlook. Third Avenue is known for its disciplined sell discipline when valuations become less compelling.
Q: What sectors is Third Avenue most bullish on now?
A: The firm’s largest additions are in energy services (Tidewater, Warrior Met Coal, Valaris) and real estate (Prologis, Sun Communities), suggesting a bullish view on these cyclical and structurally advantaged sectors.
Q: How does Third Avenue’s strategy differ from other value investors?
A: Third Avenue is known for its deep value, patient approach, often investing in out-of-favor sectors and holding positions for many years. The firm is less concentrated than some peers but maintains high conviction in its top ideas.
Q: Can individual investors replicate Third Avenue’s portfolio?
A: While replicating the exact portfolio may be challenging, studying Third Avenue’s moves can provide valuable insights into undervalued sectors and companies. Always conduct your own research and consider your risk tolerance.
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