The Weitz Partners III Opportunity Fund's Institutional Class (WPOPX) had a modest fourth quarter in 2025, with a return of +0.67%. This figure lagged behind the Bloomberg U.S. 3000 Index, which posted a +2.39% return during the same period. Over the entire calendar year, the Fund's Institutional Class achieved a +3.17% return, while the index saw a substantial +17.21% gain, indicating a considerable gap in performance. This underperformance can be attributed to the fund's holdings in deep value and life sciences sectors, which did not keep pace with the strong rally seen in AI-related and other growth stocks that propelled the broader market index.
Significant strategic adjustments were made to the fund's portfolio during the quarter, reflecting a disciplined approach to valuation and risk management. The fund completely exited its positions in CarMax, Labcorp, and Perimeter Solutions, as these investments reached their estimated fair value. These divestitures highlight the fund's commitment to realizing gains when companies hit their target valuations, ensuring capital is reallocated efficiently. Additionally, the fund strategically reduced its exposure to some of its top-performing large technology holdings, locking in profits and managing overall portfolio concentration risks. Conversely, the fund increased its allocation to companies like Aon and Roper Technologies, suggesting a reallocation towards businesses believed to offer better future growth prospects or stronger fundamentals at current valuations. Looking ahead, the fund maintains a position in Liberty Broadband (LBRDK), anticipating improved free cash flow as capital expenditures are expected to peak in 2025 and moderate in 2026, potentially supporting future share repurchases and enhancing shareholder value.
This active management style, characterized by a continuous evaluation of holdings against their intrinsic value and market conditions, underpins the fund's long-term strategy. The decisions to exit certain positions and increase others demonstrate a proactive stance in navigating market dynamics and optimizing returns for investors. By adhering to a value-oriented investment philosophy, the fund aims to identify opportunities that may be overlooked by the broader market, fostering a resilient portfolio designed to achieve sustainable growth and deliver value over time, despite short-term fluctuations.
