Fairfax 2025

[Spekulatius]

On 7/8/2025 at 2:35 PM, Parsad said:

 

That would be the other reason for no split.  Buffett put in a Class B share structure because he planned on no dividend, and that was forcing long-term shareholders to sell their A shares, or move to funds that were buying up tons of A shares and had smaller unit prices for gift giving, estate planning, etc.

 

Fairfax unlike Berkshire, Prem thought about this ahead of time, since his own income and estate planning depended on it...so he instituted the originally unheralded Fairfax dividend.  Which today, seems to make a ton of sense from both a compensation structure and ability to distribute income for estate planning purposes without having to sell your Fairfax shares.

 

Cheers!

WEB created the B shares because Walls street bankers would have crated high cost trust units, so he said I do this myself and screw them.

[anshulp]

1 hour ago, Marco Van Basten said:

Does anyone know what is the long-term say 10, 15, 20 and 25 year track record of Fairfax's equity investments?  (Them not blowing up on the fixed income side in 2022 like most insurance and bank companies did is clearly incredible.  Similarly underwriting is great.)

 

Equity itself is tricky - I've been doing a reread of the letters so was able to pull this up quickly.

I know this shows total return though which I assume includes bonds etc.

Then this is from the annual letter page 180

The CAGR of common stocks from 2015 to 2024 would be 12.1% BUT this is money weighted and there is a huge delta between this and time weighted ( I get a massive cagr hit time weighted in 2016 for example) 

 

In the 2017 Annual letter we got this - this is time weighted and without hedging. Not super helpful if you want with hedging. But from a holistic point - still useful. 

I also picked this up from the 2019 letter:

"Wade has achieved outstanding results since he began managing portfolios for us in 2008. Over that period, up to June 2018, Wade had a 19.5% compound return on his stock portfolio. Since June 2018, Wade and Lawrence Chin, who joined us in 2016, have compounded a stock and bond portfolio at 9.8% annually. We are looking forward to Wade’s increasing impact on Fairfax’s investment portfolios over time."

 

In 2024 Prem said the pair manage $1B in common stock also.

 

BUT in order to figure out what real returns are we probably should include equity hedging? 

 

I know this isn't ordered well but I wanted to figure out what 25 year return is and with hedging seems like the fair metric?  So we get this in 2015.

 

Which means true CAGR was 9.8% from 2000-2015. 

The 2016 annual - the last one to include hedging says 15 year return (2001 - 2016) was  7.6% versus 6.7% (SPY)  

 

I hope this semi helps. Might just be easier to email the company and ask ... or I just missed the performance written somewhere in the 10k. 

[hardcorevalue]

I'm going to send him a thank you note one day. He's doing wonders for the buyback. 

If you are reading this Thanks Brett!

[Parsad]

1 hour ago, Spekulatius said:

WEB created the B shares because Walls street bankers would have crated high cost trust units, so he said I do this myself and screw them.

 

That was the primary reason...but it also solved the whole issue of dividends or selling for estate planning reasons.  Cheers!

[gfp]

1 hour ago, anshulp said:

The CAGR of common stocks from 2015 to 2024 would be 12.1% BUT this is money weighted and there is a huge delta between this and time weighted ( I get a massive cagr hit time weighted in 2016 for example) 

 

This growth of the stock portfolio can't be used to calculate equity CAGR or investment performance of any kind.  It includes new capital coming in and asset allocation decisions between asset classes.  

[glider3834]

On 11/8/2025 at 1:27 AM, mistakenpoint said:

An interesting question raised on the call concerned the potential for prediction markets to disrupt traditional insurance. A non-response was given, but I believe there is a genuine risk here: market makers such as the Jane Street types could use superior models to offer more accurate pricing on certain types of insurance-like risks.

I think Fairfax's culture in terms of how it deals with new tech opportunity and threats is really key - the fact they have a global internal thinktank on AI, new tech  across their whole business - there is a lot of co-operation - there will always be new risks from competitors 

 

I think they have proven with Digit and with Ki they can disrupt markets with tech, AI - I actually see AI as providing tailwinds for Fairfax's businesses - on underwriting side they have lots of proprietary data and can use AI, machine learning to more efficiently and accurately price risk.

 

One of the reasons Ki has been careful around writing new lines is that they need to have enough quality data and conviction around pricing before they can start offering a new risk product - they are building a marketplace with 3P capacity and it needs to be done with real care.

 

My understanding is Polymarket is a betting exchange so you could bet on weather events like a hurricane occuring or not occuring for example - a simple binary outcome or bet - as it is now it looks to have low liquidity. I am sure Fairfax will monitor this & see how it develops. 

 

 But as I understand , you couldn't use a betting exchange to insure complex risks like insuring an oil tanker for example - that requires specialist expertise, data, craft etc - that is what a specialist underwriter can provide.

 

But definitely there are always going to be better ways to write insurance and distribute it and Fairfax will need to work to stay on top of it - but I think going back to Digit as an example, is that they are really customer focused, the satisfaction rates have been consistently high and so its more than just the AI, technology its about customer service. Also Digit won the Digital Insurer award at 2025 Asia Insurance award again https://www.asiainsurancereview.com/News/View-NewsLetter-Article/id/93416/Type/eDaily/29th-Asia-Insurance-Industry-Awards-welcomes-new-crop-of-winners

 

 

 

 

[anshulp]

11 hours ago, gfp said:

 

This growth of the stock portfolio can't be used to calculate equity CAGR or investment performance of any kind.  It includes new capital coming in and asset allocation decisions between asset classes.  

I agree - the 2017 figures, which are time weighted (or 2016), appear to be the most recent. I’m not sure why they stopped disclosing them. It was nice to see the breakdown between the two classes, though the caveat is that the total return they do share is probably the more relevant measure.

[SafetyinNumbers]

1 hour ago, anshulp said:

I agree - the 2017 figures, which are time weighted (or 2016), appear to be the most recent. I’m not sure why they stopped disclosing them. It was nice to see the breakdown between the two classes, though the caveat is that the total return they do share is probably the more relevant measure.

Would Digit be included in equity investments? I don’t think it’s considered core and would certainly pull up returns of the equity portfolio. Ki is core but was still a venture style investment. It’s probably also a 20x+ type of investment. Both are on the insurance side but created a lot of value. 

[anshulp]

9 minutes ago, SafetyinNumbers said:

Would Digit be included in equity investments? I don’t think it’s considered core and would certainly pull up returns of the equity portfolio. Ki is core but was still a venture style investment. It’s probably also a 20x+ type of investment. Both are on the insurance side but created a lot of value. 

For the sake of comparing common stocks to SPY, I would exclude Digit.

 

KI, on the other hand, is more operational - it’s tied closely to Fairfax’s insurance platform rather than being a standalone investment. Both have venture style elements, but I’d view them primarily as part of the insurance group’s value creation rather than the common stock portfolio.

 

[SafetyinNumbers]

1 hour ago, anshulp said:

For the sake of comparing common stocks to SPY, I would exclude Digit.

 

KI, on the other hand, is more operational - it’s tied closely to Fairfax’s insurance platform rather than being a standalone investment. Both have venture style elements, but I’d view them primarily as part of the insurance group’s value creation rather than the common stock portfolio.

 

That all makes sense but Berkshire and Markel aren’t making venture investments like this so to ignore it in the returns calculations seems unfair. 

[Viking]

Is 'share of profit of associates' about to inflect higher?

We continue our review of Fairfax’s very strong Q3 results. 

“Skate to where the puck is going to be, not where it has been.” Wayne Gretzky

 

Fairfax has 5 income streams that drive its earnings. The 4th largest is share of profit of associates. How did it perform in Q3-2025? Very well. It came in at $305 million, which was much higher than expected. This extrapolates into an annual number of $1.2 billion. That is a big number.  

 

What drove the beat?

1. Eurobank, the largest contributor, continued to deliver solid results ($140m).
2. Poseidon, the second largest contributor, continued to deliver improving results ($68m). It has been a big tailwind in 2025.
3. EXCO, a nat gas producer, is benefitting from higher natural gas prices in the US ($39m). This was a surprise and should be a nice tailwind in Q4 and 2026.
4. Waterous Energy Fund III, a private equity oil and gas fund, flipped from being a big headwind in 1H to a small tailwind in Q3. Fairfax has invested a significant amount in this fund over the past year. Adam Waterous is an excellent capital allocator - this investment will be one to watch in the coming years.

It should also be noted that a number of holdings have fallen out of this bucket over the past 3 years (Peak, Stelco, IIFL Finance, GIG, Resolute Forest Products).

 

Driven by continued solid results from Eurobank and Poseidon and improving results at EXCO and Waterous III, this income stream looks poised to have a strong Q4 and 2026. A conservative annual run rate to use in 2026 is likely $1.05 billion, which would be a new record for Fairfax. Importantly, we could see this important income stream for Fairfax start to grow again. Yes, it will likely catch many investors and analysts by surprise.  

 

There is a lot of handwringing going on these days with some investors about where the growth in earnings at Fairfax is going to come from in the coming years (they are intently focussed on where the puck has been). I think we might have just discovered one source (by focussing instead on where the puck is going). There are many more...

 

Edited November 9, 2025 by Viking

[SafetyinNumbers]

54 minutes ago, Viking said:

Waterous Energy Fund III, a private equity oil and gas fund, flipped from being a big headwind in 1H to a small tailwind in Q3. Fairfax has invested a significant amount in this fund over the past year. Adam Waterous is an excellent capital allocator - this investment will be one to watch in the coming years.

 

Currently this investment is all Greenfire Resources (GFR). It’s doing a rights issue in December so this investment is going up in Q4. Post rights issue I expect this investment to do well assuming they execute well on the capital program and oil prices can stay around here or better. I assume they will also look to do acquisitions which may result in more capital being called from Fairfax. 

[Hoodlum]

30 minutes ago, SafetyinNumbers said:

 

Currently this investment is all Greenfire Resources (GFR). It’s doing a rights issue in December so this investment is going up in Q4. Post rights issue I expect this investment to do well assuming they execute well on the capital program and oil prices can stay around here or better. I assume they will also look to do acquisitions which may result in more capital being called from Fairfax. 

Where does the WEF Strathcona investment show up in the Fairfax results. I am trying to understand how many shares of Strathcona they own as the MEG acquisition by CVE is expected to close mid-November and Strathcona is expected to issue a $10/share dividend soon after that (likely Q4).  I presume that would flow through to Fairfax and have some meaningful contribution to earnings in Q4. 

Edited November 9, 2025 by Hoodlum

[SafetyinNumbers]

20 minutes ago, Hoodlum said:

Where does the WEF Strathcona investment show up in the Fairfax results. I am trying to understand how many shares of Strathcona they own as the MEG acquisition by CVE is expected to close mid-November and Strathcona is expected to issue a $10/share dividend soon after that (likely Q4).  I presume that would flow through to Fairfax and have some meaningful contribution to earnings in Q4. 

Strathcona is part of limited partnerships. Based on the disclosure, Fairfax owns ~13.1m shares of SCR. The C$10 distribution can be elected as a return of capital so unlikely to contribute to income in Q4 for FFH.

 

 

[Viking]

1 hour ago, SafetyinNumbers said:

Strathcona is part of limited partnerships. Based on the disclosure, Fairfax owns ~13.1m shares of SCR. The C$10 distribution can be elected as a return of capital so unlikely to contribute to income in Q4 for FFH.

 

 

As per Prem’s comments, Fairfax’s initial investment with Adam Waterous was US$129 million. And Fairfax is poised to get C$130 million back in Q4, while still retaining a significant stake in Strathcona? If correct, it looks like Fairfax has another winning investment on its hands. 

[SafetyinNumbers]

32 minutes ago, Viking said:

As per Prem’s comments, Fairfax’s initial investment with Adam Waterous was US$129 million. And Fairfax is poised to get C$130 million back in Q4, while still retaining a significant stake in Strathcona? If correct, it looks like Fairfax has another winning investment on its hands. 

No question. With the regular dividend they will have taken out ~US$108m by the end the year.

 

Also SCR should be going into the S&P/TSX in December which might help the mark. 

 

Edited November 10, 2025 by SafetyinNumbers

[Hoodlum]

26 minutes ago, SafetyinNumbers said:

With the regular dividend they will have taken out ~US$108m by the end the year. 

 

 

So it looks like ~$70M US will show up as Q4 earning from the $130M CAD special dividend, after accounting for the regular dividends to date.   This regular dividend will also now become a new earnings stream of ~$75MUS/yr starting in 2026.
 

Edited November 10, 2025 by Hoodlum

[SafetyinNumbers]

17 minutes ago, Hoodlum said:

 

So it looks like ~$70M US will show up as Q4 earning from the $130M CAD special dividend, after accounting for the regular dividends to date.   This regular dividend will also now become a new earnings stream of ~$75MUS/yr starting in 2026.
 

 
 

The exchange rate is ~1.40 so ~C$130m distribution is closer to ~US$90m not US$70m. I don’t agree with you that they will elect as a dividend and choose to pay tax now as opposed to defer it and I’m not sure if we’ll find out. The ongoing dividend is C$1.20/yr which is closer to US$11m per year not US$75m. It’s supposed to go up with production but that was before they sold the Montney. I suspect they still might do it though. 

[Hoodlum]

21 minutes ago, SafetyinNumbers said:

 
 

The exchange rate is ~1.40 so ~C$130m distribution is closer to ~US$90m not US$70m. I don’t agree with you that they will elect as a dividend and choose to pay tax now as opposed to defer it and I’m not sure if we’ll find out. The ongoing dividend is C$1.20/yr which is closer to US$11m per year not US$75m. It’s supposed to go up with production but that was before they sold the Montney. I suspect they still might do it though. 

I had thought that once there were dividends that matched the initial investment, future dividends would be counted as earnings. That is where I came up with the ~$70M US after applying $20M in addition to the $108M Regular dividends to the initial $129M US investment.  But it sounds like the dividends can continue to be subtracted from the initial investment even if it goes negative. 

[SafetyinNumbers]

51 minutes ago, Hoodlum said:

I had thought that once there were dividends that matched the initial investment, future dividends would be counted as earnings. That is where I came up with the ~$70M US after applying $20M in addition to the $108M Regular dividends to the initial $129M US investment.  But it sounds like the dividends can continue to be subtracted from the initial investment even if it goes negative. 

The US$108m included the regular dividends and the special distribution. The regular dividends would be income. The special distribution will reduce the cost basis from US$129m to ~US$35m. 

[Hoodlum]

20 minutes ago, SafetyinNumbers said:

The US$108m included the regular dividends and the special distribution. The regular dividends would be income. The special distribution will reduce the cost basis from US$129m to ~US$35m. 

ahh. I had missed that.  Thanks. 

[Janklp]

Dear all, happy to be part of this community. This is my first post/contribution as Fairfax shareholder (new position as of August) and are looking forward to interact with all of you. I have been a shareholder of Berkshire and Markel since 2020 and have a hard time digesting why I missed Fairfax back in the day. 

 

However, still quite happy that I have decided to get the work in and become a shareholder this year. I own about 20 positions (Fairfax is currently #3 after Berkshire and Markel) and I make a report (see below) about every position every 3/6 months. Happy to receive your feedback/remarks! 

 

Cheers from the Netherlands! 

[djokovic1]

@janklp Welcome!

 

Im curious, having looked at these companies, do you see Markel doing something better than Fairfax in aggregate or in some areas?

[hardcorevalue]

probably just a tax reason to own mkl over ffh i bet

[Parsad]

6 hours ago, Janklp said:

Dear all, happy to be part of this community. This is my first post/contribution as Fairfax shareholder (new position as of August) and are looking forward to interact with all of you. I have been a shareholder of Berkshire and Markel since 2020 and have a hard time digesting why I missed Fairfax back in the day. 

 

However, still quite happy that I have decided to get the work in and become a shareholder this year. I own about 20 positions (Fairfax is currently #3 after Berkshire and Markel) and I make a report (see below) about every position every 3/6 months. Happy to receive your feedback/remarks! 

 

Cheers from the Netherlands! 

 

 

Welcome Janklp!  Cheers!