Fairfax stock positions

[dartmonkey]

On 8/12/2025 at 3:54 PM, Viking said:

There was the initial investment, which effectively went to zero. The second large investment. And the merger with Grivalia Properties. Eurolife is also an important part of the story (it was owned by Eurobank and they still own 20%). To do a proper analysis of Fairfax’s investment it needs to include Eurobank, Grivalia Properties and Eurolife.

 

The bottom line, since 2000 this investment has worked out fabulously well for Fairfax.

Yes, I had forgotten Grivalia, which was actually a big part of the investment. The first shares they bought in 2014, E400m at a share price of E31, for 13.6% of the company. That investment almost went to zero - to E1.00, actually, when the company was forced to refinance by the Greek government in 2015. At that time, Fairfax invested another E350m at E1.00 (the refinancing), taking them to 17%;  they also bought an 80% interest in Eurolife from Eurobank, for E315m, so this can not really be characterized as part of the Eurobank investment, unless you figure they got a sub-market price for Eurolife, which I doubt. By 2016, Eurobank's share priced had dropped as low as E0.30, so this was a serious money-loser at that point.

 

Fast forward to 2018, when Fairfax sold its 51% stake in Grivalia to Eurobank for shares in Eurobank, taking its stake in Eurobank from 17% to 32%. At that point, Eurobank was trading at E0.62 per share, so this investment, almost half the total, was at an even better price than the E1.00 refinancing in 2015. That put the weighted average share price at E0.94.

 

Given the fact that Fairfax has had serious money invested for about 10 years, and the share price is now E3.48 (another high today, although we will probably never see another all-time high), and there have only been 2 10c dividends, this can legitimately be said to have worked out fabulously well since 2020 (which is probably what Viking meant), compared to how terrible it was looking for the first 5 years, but for it to be a great investment overall, we probably need to see a little more of this greatness first.

 

 

[petec]

On 8/13/2025 at 4:56 AM, Viking said:

• High level of confidence/trust in the management team at Fairfax: Fairfax has a very good track record over the past 7 years of partnering with very good/exceptional entrepreneurs/CEO's/founders. Not surprisingly, Fairfax's investment results have also been very good. Peter Lynch said "In this business, if you're good, you're right six times out of ten." Fairfax has been better than that. 
• Carolyn Shin has a very impressive resume. I like that Fairfax has partnered with a highly successful founder/entrepreneur.
• As per Wade Burton's comments on Fairfax's Q2 conference call, the early results from the investment are promising/ahead of expectations. 

 

I would add

4) the structuring, which appears to add considerable downside protection, plus float income, plus a huge incentive for Shin/Vacatia. It's an intelligent way to use all of a regulated insurance balance sheet to invest in hard assets for income while creating equity optionality.

[gfp]

Odyssey Re Q2 NAIC filing attached.  Page 77 shows stocks acquired during the quarter and page 79 shows stocks sold during the quarter.

 

Here are some stocks acquired:

 

Here are some stocks sold:

ODSY RE Q2 23680.2025.P.Q2.P.O.2.5018663.pdf

[Hoodlum]

According to Q2 13F, Fairfax sold $6M shares of BB.  It looks like they are finally unwinding this. 

[gfp]

Here is Atlas's Q2 filing.  Is this the last one they will post publicly for a while?

 

https://app.quotemedia.com/data/downloadFiling?webmasterId=101533&ref=319373911&type=HTML&symbol=ATCO&cdn=79b0ee21daf0ce5d533273b21851906f&companyName=Atlas+Corp.&formType=6-K&dateFiled=2025-08-13

[gfp]

8 minutes ago, Hoodlum said:

According to Q2 13F, Fairfax sold $6M shares of BB.  It looks like they are finally unwinding this. 

 

And replacing it with Kraft Heinz and Canfor...  Don't backslide Hamblin Watsa!

[LC]

Interesting they bought a few more Japanese names

https://finance.yahoo.com/quote/3649.T/

https://finance.yahoo.com/quote/8876.T/

https://finance.yahoo.com/quote/3182.T/

https://finance.yahoo.com/quote/6184.T/

[glider3834]

Metlen just built the largest data center in Greece

 

https://greekcitytimes.com/2025/08/12/metlen-data-center

[glider3834]

11 hours ago, LC said:

Interesting they bought a few more Japanese names

https://finance.yahoo.com/quote/3649.T/

https://finance.yahoo.com/quote/8876.T/

https://finance.yahoo.com/quote/3182.T/

https://finance.yahoo.com/quote/6184.T/

 yes only small positions at this stage - Japan is very interesting 

[nwoodman]

3 hours ago, glider3834 said:

 yes only small positions at this stage - Japan is very interesting 

Agree, tiny baby steps but good to see Japan is on their list of hunting grounds

[Hoodlum]

On 8/14/2025 at 9:02 AM, gfp said:

Here is Atlas's Q2 filing.  Is this the last one they will post publicly for a while?

 

https://app.quotemedia.com/data/downloadFiling?webmasterId=101533&ref=319373911&type=HTML&symbol=ATCO&cdn=79b0ee21daf0ce5d533273b21851906f&companyName=Atlas+Corp.&formType=6-K&dateFiled=2025-08-13

it looks like Atlas has locked in additional lease agreements for 19 ships.   It will be interesting to see how this impacts their earnings going forward. 

 

During the three months ended June 30, 2025, the Company entered seven vessel financing arrangements for 15 containerships ranging in size from 11,400 to 17,000 TEU and four PCTC vessels ranging in size from 7,000 to 10,800 CEU for aggregate proceeds of $2,778,682,000 of which $775,432,000 is denominated in RMB. The sale-leaseback financings have terms ranging from 9 to 17 years and the Company has fixed rate purchase options on all 19 vessels some of which can be exercised immediately after delivery of the vessel. In addition, the Company has purchase obligations for five of the 19 vessels. Lease payments are based on fixed rate or variable based on a benchmark rate plus a margin adjustment.

 

 

[Parsad]

14 hours ago, nwoodman said:

Agree, tiny baby steps but good to see Japan is on their list of hunting grounds

 

Wade and Lawrence learned their skills under Peter Cundill, so they will go to the cheapest hunting grounds globally.  It's why they probably work well within Hamblin-Watsa as well.  Cheers!

[treasurehunt]

On 8/14/2025 at 6:32 PM, gfp said:

Here is Atlas's Q2 filing.  Is this the last one they will post publicly for a while?

 

https://app.quotemedia.com/data/downloadFiling?webmasterId=101533&ref=319373911&type=HTML&symbol=ATCO&cdn=79b0ee21daf0ce5d533273b21851906f&companyName=Atlas+Corp.&formType=6-K&dateFiled=2025-08-13

 

Atlas seems to be operating well and Fairfax will do very well with this investment, I think. There is this bit in the 10-Q on transactions with Fairfax.

 

During the three and six months ended June 30, 2025, the dividends paid on Series J Preferred Shares held by Fairfax were $5,250,000 and $10,500,000, respectively (2024 – $5,250,000 and $10,500,000, respectively).

Fairfax remains a counterparty to certain indemnification and compensation arrangements related to the acquisition of APR Energy which occurred in 2020. During the three and six months ended June 30, 2025, the Company received $12,000,000 and $12,000,000, respectively (2024 – $42,500,000 and $42,500,000 respectively) from Fairfax related to these indemnification arrangements.

 

The $300m of Series J Preferred pays 7% interest at the moment. The interest rate is scheduled to go up to 8.5% next year and then increase by 1.5% per year to a maximum of 11.5%. I think Atlas will redeem these in the next couple of years.

 

How bad an investment was APR Energy? Fairfax is still paying out tens of millions per year in indemnification. Luckily 43% of these payments come right back in a sense.

[nwoodman]

3 hours ago, treasurehunt said:

 

Atlas seems to be operating well and Fairfax will do very well with this investment, I think. There is this bit in the 10-Q on transactions with Fairfax.

 

During the three and six months ended June 30, 2025, the dividends paid on Series J Preferred Shares held by Fairfax were $5,250,000 and $10,500,000, respectively (2024 – $5,250,000 and $10,500,000, respectively).

Fairfax remains a counterparty to certain indemnification and compensation arrangements related to the acquisition of APR Energy which occurred in 2020. During the three and six months ended June 30, 2025, the Company received $12,000,000 and $12,000,000, respectively (2024 – $42,500,000 and $42,500,000 respectively) from Fairfax related to these indemnification arrangements.

 

The $300m of Series J Preferred pays 7% interest at the moment. The interest rate is scheduled to go up to 8.5% next year and then increase by 1.5% per year to a maximum of 11.5%. I think Atlas will redeem these in the next couple of years.

 

How   an investment was APR Energy? Fairfax is still paying out tens of millions per year in indemnification. Luckily 43% of these payments come right back in a sense.

One pleasing development in Atlas’s Q2 numbers:

 

“The consolidated weighted average interest rate for June 30, 2025 was 6.02% compared to 6.93% at June 30, 2024. The weighted average interest rates for the vessel leasing segment and Atlas Corp. (on an unconsolidated basis) were 6.03% and 7.13%, respectively, for the three months ended June 30, 2025 (June 30, 2024: 6.93% and 7.13%, respectively).

 

This seems to be driven by a smarter capital mix.  The company has quietly retired some of its most expensive finance leases and term debt, refinanced into lower-spread sale-leasebacks, and leaned more on long-dated secured notes with coupons as low as 3.92%. With floating-rate costs cushioned by hedges and SOFR easing from late-2024 peaks, the debt stack now carries a lighter interest burden. This shift suggests Atlas has a bit more financial flexibility than I’d previously given it credit for.

 

On APR we must be getting towards the end of the make good.  Decent YoY decline:

 

“Fairfax remains a counterparty to certain indemnification and compensation arrangements related to the acquisition of APR Energy which occurred in 2020. During the three and six months ended June 30, 2025, the Company received $12,000,000 and $12,000,000, respectively (2024 – $42,500,000 and $42,500,000 respectively) from Fairfax related to these indemnification arrangements.”

 

Happy to see that one in the rearview mirror!

Edited August 16, 2025 by nwoodman

[petec]

I'd missed those APR make-goods. Does anyone have the overall cash in/cash out data on APR? Must be one of Farfax's worse investments!

[nwoodman]

On 8/17/2025 at 4:39 PM, petec said:

I'd missed those APR make-goods. Does anyone have the overall cash in/cash out data on APR? Must be one of Farfax's worse investments!

Not sure the note (ChatGPT DR unedited) attached answers your question but was helpful for me. What is particularly humbling was my own mental model, that Sokol was going to elevate this shitco into a mini Mid American. Couldn’t get to the bottom of who’s bright idea this was but if they have moved on I wouldn’t be all that disappointed.  Goes without saying I would be departing with them for my own false narrative.

 

Edit: Fixed the butchered table in the doc

 

Fairfax Financial’s Investment in APR Energy- A Comprehensive Review.pdf

Edited August 18, 2025 by nwoodman

[Viking]

10 hours ago, petec said:

I'd missed those APR make-goods. Does anyone have the overall cash in/cash out data on APR? Must be one of Farfax's worse investments!

 

I have tried to connect the dots on APR and it is very complicated. Suffice to say, it was a terrible investment on all metrics. For that time period (2015-2017), APR, Farmers Edge and Fairfax Africa are probably all running neck and neck for the prize of worst investment made. The crazy (bizarre?) thing is we are still not able to close the book on those shitty investments - all these years later. I do think we are close to being done with them. But I have been saying that for years - and I have been dead wrong. It has been like having a P/C insurance runoff business (stuffed full of hazardous waste) but this time in the equity portfolio. 

[Hoodlum]

Seaspan just signed for 12 additional new builds from China at a cost of $1.2B.  It certainly looks like Seaspan is not concerned about the long term impacts of Tariffs.  They now have 41 new builds at various stages to be completed over the next 4 years. 
 

https://www.xindemarinenews.com/en/shipbuilding/2025/0818/60951.html

Edited August 18, 2025 by Hoodlum

[gfp]

2 minutes ago, Hoodlum said:

Seaspan just signed for 12 additional new builds from China at a cost of $1.2B.  It certainly looks like Seaspan is not concerned about the long term impacts of Tariffs.  Seaspan now has 41 new builds at various stages to be completed over the next 4 years. 
 

https://www.xindemarinenews.com/en/shipbuilding/2025/0818/60951.html

 

Thanks for sharing that.  Interesting that they are increasingly financing in RMB, where rates are lower.

[Hoodlum]

25 minutes ago, gfp said:

 

Thanks for sharing that.  Interesting that they are increasingly financing in RMB, where rates are lower.

I noticed that as well and seems to be a recent trend.  All 41 new builds are coming from China and most if not all of that are likely financed at a lower rate in RMB. 

[TwoCitiesCapital]

2 hours ago, Hoodlum said:

I noticed that as well and seems to be a recent trend.  All 41 new builds are coming from China and most if not all of that are likely financed at a lower rate in RMB. 

 

Do we have any idea what the contractual revenues are, if any, that are denominated in RMB? 

 

I have a very hard time imagining RMB going higher with China still relying heavily on exports, managing the currency, and having a demographic/real estate crisis of their own, but you never really know... 

[Hoodlum]

3 minutes ago, TwoCitiesCapital said:

 

Do we have any idea what the contractual revenues are, if any, that are denominated in RMB? 

 

I have a very hard time imagining RMB going higher with China still relying heavily on exports, managing the currency, and having a demographic/real estate crisis of their own, but you never really know... 

 

I did try to look for that earlier but could not find any breakdown of contracts by currency.  

[gfp]

It seems that only a portion of the financing is denominated in RMB

 

"During the three months ended June 30, 2025, the Company entered seven vessel financing arrangements for 15 containerships ranging in size from 11,400 to 17,000 TEU and four PCTC vessels ranging in size from 7,000 to 10,800 CEU for aggregate proceeds of $2,778,682,000 of which $775,432,000 is denominated in RMB. The sale-leaseback financings have terms ranging from 9 to 17 years and the Company has fixed rate purchase options on all 19 vessels some of which can be exercised immediately after delivery of the vessel. In addition, the Company has purchase obligations for five of the 19 vessels. Lease payments are based on fixed rate or variable based on a benchmark rate plus a margin adjustment."

[Txvestor]

11 minutes ago, TwoCitiesCapital said:

 

Do we have any idea what the contractual revenues are, if any, that are denominated in RMB? 

 

I have a very hard time imagining RMB going higher with China still relying heavily on exports, managing the currency, and having a demographic/real estate crisis of their own, but you never really know... 

 

 

I agree with this. However, if most of their purchase contracts for new build ships are also in Renmibi, wouldn't that offer some sort of inbuilt hedge against currency depreciation?

[TwoCitiesCapital]

30 minutes ago, Txvestor said:

 

 

I agree with this. However, if most of their purchase contracts for new build ships are also in Renmibi, wouldn't that offer some sort of inbuilt hedge against currency depreciation?

 

That would still make them net short CNY.  Just moves the counterparty from manufacturer to the bond-holders and extends the duration from overnight to years. 

 

I'm just trying to figure out how much they're short to know what a risk that poses over the life of the bonds.