Mason Hawkins: 14.89% Return Q2 2025 – Their Winning Strategy Revealed

The Longleaf Partners International Fund’s second-quarter commentary for 2025 offers a compelling narrative on the power of disciplined, value-driven investing in volatile markets. Mason Hawkins and his team underscore the importance of focusing on fundamentals, even as macro uncertainties loom large.

“Longleaf Partners International Fund returned +14.89% in the second quarter, outperforming the benchmark index which returned +12.63%,” a testament to the strategy’s resilience.

Despite underweight positions in sectors like Industrials and Financials, which benefited from policy tailwinds, the Fund’s success was driven by “some coiled spring investments partially uncoiled during the quarter, reversing the performance disconnect that occurred in Q1.”

This highlights the team’s conviction in their bottom-up approach, where individual business performance ultimately prevails over short-term macro noise.

The quarter began with global turbulence as the US imposed record-high tariffs, sparking sell-offs across equity and fixed-income markets. Yet, Hawkins remains steadfast in his belief that intrinsic value will prevail: “Our portfolio of competitively advantaged businesses continues to deliver strong operational results and value growth, which over the long-term should be reflected in share prices regardless of macro-gyrations.”

This philosophy is evident in standout performers like Glanbia, which rebounded sharply after a challenging Q1. “We were confident the market reaction to higher-for-longer input costs at Glanbia was a gross overreaction,” Hawkins notes, emphasizing the market’s tendency to overreact to temporary headwinds. Glanbia’s improving margins and strategic rationalization efforts exemplify the Fund’s focus on businesses with hidden value.

Similarly, Eurofins and Canal+ demonstrate the team’s patience and willingness to capitalize on mispriced opportunities.

Eurofins, once battered by short attacks, is now “getting on with the job of delivering on their potential for strong organic growth and margin accretion.” Meanwhile, Canal+, trading at “half of what we believe it to be worth,” represents a classic case of market myopia.

Hawkins explains, “The consolidated financials hide this potential, implicitly leading the market to capitalize on the historic losses in France and therefore ascribing a negative enterprise value to the French pay-TV business as a whole.” Such disconnects between price and value are where Longleaf thrives.

New additions like Koninklijke Philips and Treasury Wine Estates further reflect the Fund’s contrarian mindset.

Philips, trading at a discount to peers due to past struggles, is seen as “past the trough in terms of underlying performance,” while Treasury Wine’s re-entry into China post-tariffs offers a “supply constrained” growth opportunity.

Hawkins’ outlook remains optimistic: “We believe there is substantial opportunity in the portfolio today,” with the Fund’s P/V ratio in the high-60s%. In a market reaching “new all-time highs,” his team’s focus on margin of safety and long-term value creation stands as a reminder of the enduring power of disciplined investing.

You can find the entire letter here:

Longleaf Partners Q2 2025 Commentary