Value Investing

Longleaf Partners Funds Semi-Annual Webcast

The Longleaf Partners Funds are pleased to provide a replay of our Partners Semi-Annual Webcast held on Tuesday, November 17, 2015. The webcast includes comments from our global investment team and Q&A with investors.

Longleaf Partners Funds Semi-Annual Webcast

Longleaf Partners Funds Semi-Annual Webcast – Transcript

Mason Hawkins: Thanks, Lee. It’s important to reiterate that we’re concentrated long term value investors. As such, you can expect us to underperform during certain periods when a few of our holdings remain materially discounted and Mr. Market is waiting for the negative stock price momentum to reverse.

As one of the largest clients of Southeastern and the largest shareholder of the Longleaf Partners funds, we’re acutely aware that our recent absolute and relative returns have not been acceptable. These facts were highlighted in our recent third quarter report to our partners.

However, since the lows of September 30th, we’ve made meaningful progress and begun delivering the kind of performance you expect. As the slide shows, all four Longleaf funds have outperformed their respective indices and delivered meaningful absolute returns in the 45 days since quarter end. While these recent numbers are encouraging, they’re not the determinates of our future compounding. As has been true coming out of previous challenging performing periods and throughout our history, our future returns will be determined by the companies we own, their managements and the discounted prices of their securities.

Rarely in Southeastern’s 40 plus years have we felt better about our prospective performance. We believe our next three to five year results should not only be acceptable, but quite pleasing because: we own, in the main, dominant competitively advantaged industry leaders; our businesses are managed by exemplary talented individuals focused on prudently building intrinsic value per share and getting those values recognized; our corporate value should be demonstrably greater in three years.

The next slide shows what we’ve seen many times in our history, how dramatically and quickly the tide of market perception can change when Mr. Market recognizes the values will be growing, and/or a company will be better governed and managed.

Over the last year and particularly in the third quarter, negative momentum hurt a handful of our stocks, primarily those in the energy, gaming and media industries. We’ve also bought several new holdings where negative sentiment overwhelmed long term business values. You can see in the chart how quickly momentum has changed direction. Twelve of our companies are up over 15 percent since September 30th. Those highlighted are the ones we’ve purchased this year in 2015.

Longleaf Partners

See full transcript below.