Crip1 Posted March 31 Posted March 31 1 hour ago, LC said: I think it will be very interesting to see the overall portfolio movements as the investment teams (both on the equity and FI side) respond to these two factors. Not to mention the hit to TRS. It's been a wonderful investment, but this quarter's gonna hurt a little. -Crip
SafetyinNumbers Posted March 31 Posted March 31 30 minutes ago, Viking said: My guess is they may surprise us with how aggressive they have been with share buybacks in Q1. If the stock stays low, 2026 could end up being a big year for share buybacks (more than the 1 million they bought back and retired last year). I’m not sure what consensus is on buybacks. I think they have $2.4b to spend this year. They paid $384m to March 6, buying 226k shares. That would leave $2b. I assume they are more aggressive at lower prices so >1m shares seems likely.
SafetyinNumbers Posted March 31 Posted March 31 5 minutes ago, Crip1 said: Not to mention the hit to TRS. It's been a wonderful investment, but this quarter's gonna hurt a little. -Crip We know intrinsic value went higher. Just a timing difference. 1
SonOfKen_IV Posted March 31 Posted March 31 Just read a X post where was claimed: "MSCI decides today if Greece will be updated to developed from emerging" MSCI Greece IMI index includes Eurobank
Hoodlum Posted March 31 Posted March 31 1 hour ago, SonOfKen_IV said: Just read a X post where was claimed: "MSCI decides today if Greece will be updated to developed from emerging" MSCI Greece IMI index includes Eurobank Here are some more details surrounding this. The upgrade may not necessarily have a positive impact on the Greek stocks. Also, the original German article sourced from yesterday mentioned that it would be announced next Tuesday. Maybe this is a translation issue but saying yesterday "next Tuesday" is not referring to today but Tuesday of next week. At least that is my interpretation. Maybe someone can confirm this German comment from yesterday. Monatelang liefen die Verhandlungen, in denen der Indexbetreiber MSCI mit institutionellen Anlegern diskutierte, ob Griechenland in die Klasse der entwickelten Märkte heraufgestuft wird. Am kommenden Dienstag folgt nun die Bekanntgabe der Entscheidung. https://www.dw.com/el/πιθανή-αναβάθμιση-χα-ωφελημένοι-και-χαμένοι/a-76600145 1
Hoodlum Posted March 31 Posted March 31 17 hours ago, Viking said: Fairfax has a lot going on right now (all expected to close in Q2): Sale of Eurolife's life insurance business Sale of half of Poseidon Take private of Kennedy Wilson My guess is they may surprise us with how aggressive they have been with share buybacks in Q1. If the stock stays low, 2026 could end up being a big year for share buybacks (more than the 1 million they bought back and retired last year). I was reminded of the Kennedy Wilson take private transaction, when I saw the Sun Life Canada announcement this morning where they are expanding further into this area of their investments. They also have management with skin in the game. I am surprised we have not seen other insurance companies expand into real estate, considering the synergies with private credit. https://www.wealthprofessional.ca/investments/alternative-investments/sun-life-tightens-grip-on-alternatives-platform-with-bgo-crescent-buyouts-and-bell-partners-deal/392013 "BGO and Crescent are industry leading businesses and integral to our strategy for Sun Life Asset Management. Both companies create enduring value for our Clients and stakeholders. Together, they bring decades of real estate and credit expertise and deliver high-quality solutions for Clients globally," said Kevin Strain, President and CEO of Sun Life. As part of the new ownership structure, employees across the platform will be able to hold up to 25% through a management equity plan, aligning internal stakeholders with future growth. Alongside the buyouts, Sun Life also unveiled plans to acquire U.S.-based Bell Partners, a multifamily real estate investment manager with roughly US$10bn in assets under management. The US$350m transaction will position Bell Partners as the firm’s U.S. multifamily platform under BGO, adding scale in residential real estate and expanding its operating footprint across key American markets. The transactions highlight a broader push by Sun Life to scale its asset management platform, deepen its alternatives offering, and unlock new growth avenues through global real estate and credit markets.
gfp Posted March 31 Posted March 31 (edited) 6 minutes ago, Hoodlum said: I am surprised we have not seen other insurance companies expand into real estate, considering the synergies with private credit. Life insurance companies are some of the largest investors in commercial real estate and private mortgages on commercial real estate. The long duration (and reduced liquidity) of the RE itself fits better with Life than P&C Edited March 31 by gfp
Hoodlum Posted March 31 Posted March 31 2 minutes ago, gfp said: Life insurance companies are some of the largest investors in commercial real estate and private mortgages on commercial real estate. The long duration of the RE itself fits better with Life than P&C Ahh. That does make sense.
Hoodlum Posted March 31 Posted March 31 Hopefully that was Fairfax picking up 140k shares near the close today. I believe there was ~70k yesterday as well near the close. Separately, I noticed that sometime this month TDDI started offering partial shares in FFH. I believe this is a first for a major bank in Canada.
Viking Posted March 31 Posted March 31 (edited) Master Tracker & Quarterly Change in Market Value – Q1-2026 A Warning When looking at Fairfax’s equity holdings, what ultimately matters is the underlying business performance of those holdings over time – not the quarter-to-quarter change in market value. Short term (quarterly) changes in market value are inherently volatile and should therefore be viewed with an appropriate degree of skepticism. So why track quarterly changes at all? Because they are interesting and because they can provide early insight into one of Fairfax’s largest income streams—investment gains (and losses)—ahead of reported earnings. Importantly, over time (like a couple of years), changes in market value of the equity holdings should roughly match changes in intrinsic business value. Q1-2026 Summary Portfolio decrease: ~$486M (pre-tax), or 1.7%. Quarter-end equity value: ~$28.5 billion Fairfax’s equity portfolio performed very well over the first 2 months of 2026 (up more than $1 billion). War in the Persian Gulf broke out at the beginning of Match. This hit Fairfax’s equity holdings hard and the big gains reversed to a modest loss at March 31. Portfolio Composition by Accounting Treatment Mark to market = 49% Associate and consolidated = 51% Total Return by Accounting Treatment The mark to market bucket finished the quarter flat. The decline was centered in the Associate and Consolidated holdings. As a result, the impact on Q1 reported results (investments gains/losses) will be minimal. Major Movers – Q4 Strongest contributors: Fairfax’s various oil holdings (Strathcona, Greenfire and Occidental Pertoleum) finished the quarter up $390 million. Orla Mining (gold) was also up nicely. Laggards: Fairfax total return swap position was the biggest decliner, down $375 million, reflecting weakness in Fairfax’s share price. The decline in Fairfax’s share price in the quarter (11%) was similar to the decline experienced by many P/C insurance peers (Markel was down 11% and Intact Financial was down 12%). Indian stocks sold off pretty hard in the quarter, which impacted Thomas Cook India. Currency was also a headwind (strong US$). Excess of Fair Value Over Carrying Value (FV – CV) Estimate of excess of FV over CV at December 31, 2025: ~ $2.7 billion ~ $122 per diluted share (pre-tax) For context, this figure was ~ $3.1 billion at December 31, 2025. Despite the small decline in Q1, FV – CV for non-insurance associate and consolidated holdings has materially increased in size in recent years. It represents real economic value that is not captured in EPS or book value—clear evidence that accounting metrics understate Fairfax’s true economic performance. Note: Carrying values are as of Dec-31-2025, so FV-CV may be slightly overstated. Additional Notes on Tracker: Updated to include annual, interim and 13F reports and news releases FFH-TRS included at notional value Convertibles, warrants and debentures included in the mark to market bucket Digit (India) excluded (some of which is market to market) – shares down modestly in Q1 Currency was a modest headwind in Q1 – impact on reported results is complex (net of hedging) The tracker is not an exact match of Fairfax’s actual equity holdings. It is useful only as a rough guide (both for holdings and change in value). Edited March 31 by Viking
Hoodlum Posted March 31 Posted March 31 33 minutes ago, Viking said: Master Tracker & Quarterly Change in Market Value – Q1-2026 A Warning When looking at Fairfax’s equity holdings, what ultimately matters is the underlying business performance of those holdings over time – not the quarter-to-quarter change in market value. Short term (quarterly) changes in market value are inherently volatile and should therefore be viewed with an appropriate degree of skepticism. So why track quarterly changes at all? Because they are interesting and because they can provide early insight into one of Fairfax’s largest income streams—investment gains (and losses)—ahead of reported earnings. Importantly, over time (like a couple of years), changes in market value of the equity holdings should roughly match changes in intrinsic business value. Q1-2026 Summary Portfolio decrease: ~$486M (pre-tax), or 1.7%. Quarter-end equity value: ~$28.5 billion Fairfax’s equity portfolio performed very well over the first 2 months of 2026 (up more than $1 billion). War in the Persian Gulf broke out at the beginning of Match. This hit Fairfax’s equity holdings hard and the big gains reversed to a modest loss at March 31. Portfolio Composition by Accounting Treatment Mark to market = 49% Associate and consolidated = 51% Total Return by Accounting Treatment The mark to market bucket finished the quarter flat. The decline was centered in the Associate and Consolidated holdings. As a result, the impact on Q1 reported results (investments gains/losses) will be minimal. Major Movers – Q4 Strongest contributors: Fairfax’s various oil holdings (Strathcona, Greenfire and Occidental Pertoleum) finished the quarter up $390 million. Orla Mining (gold) was also up nicely. Laggards: Fairfax total return swap position was the biggest decliner, down $375 million, reflecting weakness in Fairfax’s share price. The decline in Fairfax’s share price in the quarter (11%) was similar to the decline experienced by many P/C insurance peers (Markel was down 11% and Intact Financial was down 12%). Indian stocks sold off pretty hard in the quarter, which impacted Thomas Cook India. Currency was also a headwind (strong US$). Excess of Fair Value Over Carrying Value (FV – CV) Estimate of excess of FV over CV at December 31, 2025: ~ $2.7 billion ~ $122 per diluted share (pre-tax) For context, this figure was ~ $3.1 billion at December 31, 2025. Despite the small decline in Q1, FV – CV for non-insurance associate and consolidated holdings has materially increased in size in recent years. It represents real economic value that is not captured in EPS or book value—clear evidence that accounting metrics understate Fairfax’s true economic performance. Note: Carrying values are as of Dec-31-2025, so FV-CV may be slightly overstated. Additional Notes on Tracker: Updated to include annual, interim and 13F reports and news releases FFH-TRS included at notional value Convertibles, warrants and debentures included in the mark to market bucket Digit (India) excluded (some of which is market to market) – shares down modestly in Q1 Currency was a modest headwind in Q1 – impact on reported results is complex (net of hedging) The tracker is not an exact match of Fairfax’s actual equity holdings. It is useful only as a rough guide (both for holdings and change in value). Thanks @Viking for these details. I was expecting a notable loss on the MTM equity, but had forgotten how much exposure Fairfax had to Oil.
Maverick47 Posted April 1 Posted April 1 (edited) I might try to look back at the triangles in reports before the IFRS 17 accounting change. Meanwhile, I can share a couple of observations about the triangle that @CapitalAlloc showed from page 80 of the Annual Report, which I just received today. ( I find it a bit easier to flip back and forth in a paper document than the online pdf). The paragraph before the triangle, found on the bottom of page 79, says that: “The loss development tables below represent the estimates of undiscounted cumulative claims, excluding the risk adjustment, on both a gross and net of reinsurance basis for insurance contracts issued by the property and casualty insurance and reinsurance reporting segments at the end of each calendar year.” Page 218 in the paper Annual Report notes that: “References in this MD&A to the company’s property and casualty insurance and reinsurance operations do not include the company’s life insurance and run-off operations….References to “insurance and reinsurance” operations includes property and casualty insurance and reinsurance, life insurance and run-off operations.” So we now know the triangle didn’t include either life insurance, run-off or non-financial risk adjustment, which latter item in the aggregate adds several billion dollars to the discounted insurance contract liabilities on the balance sheet, with information below the triangle indicating that prior year release of this risk adjustment amounted to more than $800 million in both 2024 and 2025. What I’ll be interested in seeing if I can find out is whether before the IFRS 17 accounting change, the undiscounted triangles were shown including any sort of management’s conservative reserving philosophy which may have been the analog (in the IFRS 17 world) of today’s non-Financial risk adjustment. Was there a level of conservatism in the loss reserves shown in pre-IRFS 17 report triangles that disappears in the triangles shown in the current annual report? In any event, run-off can’t explain any apparent reserve development in the 2025 triangle, since we’re told that neither life insurance nor run-off losses are included in it…. Edited April 1 by Maverick47
Hoodlum Posted April 1 Posted April 1 11 hours ago, SonOfKen_IV said: Just read a X post where was claimed: "MSCI decides today if Greece will be updated to developed from emerging" MSCI Greece IMI index includes Eurobank it is official now with the index getting updated in May 2027. https://www.reuters.com/business/finance/greece-set-rejoin-msci-developed-markets-index-2027-2026-03-31/
CapitalAlloc Posted April 1 Posted April 1 7 hours ago, Maverick47 said: I might try to look back at the triangles in reports before the IFRS 17 accounting change. Meanwhile, I can share a couple of observations about the triangle that @CapitalAlloc showed from page 80 of the Annual Report, which I just received today. ( I find it a bit easier to flip back and forth in a paper document than the online pdf). The paragraph before the triangle, found on the bottom of page 79, says that: “The loss development tables below represent the estimates of undiscounted cumulative claims, excluding the risk adjustment, on both a gross and net of reinsurance basis for insurance contracts issued by the property and casualty insurance and reinsurance reporting segments at the end of each calendar year.” Page 218 in the paper Annual Report notes that: “References in this MD&A to the company’s property and casualty insurance and reinsurance operations do not include the company’s life insurance and run-off operations….References to “insurance and reinsurance” operations includes property and casualty insurance and reinsurance, life insurance and run-off operations.” So we now know the triangle didn’t include either life insurance, run-off or non-financial risk adjustment, which latter item in the aggregate adds several billion dollars to the discounted insurance contract liabilities on the balance sheet, with information below the triangle indicating that prior year release of this risk adjustment amounted to more than $800 million in both 2024 and 2025. What I’ll be interested in seeing if I can find out is whether before the IFRS 17 accounting change, the undiscounted triangles were shown including any sort of management’s conservative reserving philosophy which may have been the analog (in the IFRS 17 world) of today’s non-Financial risk adjustment. Was there a level of conservatism in the loss reserves shown in pre-IRFS 17 report triangles that disappears in the triangles shown in the current annual report? In any event, run-off can’t explain any apparent reserve development in the 2025 triangle, since we’re told that neither life insurance nor run-off losses are included in it…. Thx for looking into it. Interesting
SonOfKen_IV Posted April 1 Posted April 1 7 hours ago, Hoodlum said: it is official now with the index getting updated in May 2027. https://www.reuters.com/business/finance/greece-set-rejoin-msci-developed-markets-index-2027-2026-03-31/ thx for the update
petec Posted April 1 Posted April 1 I recently reviewed Howard Hughes. Apologies for hijacking this thread but I would love any feedback from the board on how I have valued the insurance operation. Link is here. HHH is a complex business so my treatment of each segment is relatively light compared to the analysis that Fairfax gets on this board, but I hope it is directionally reasonable. Thanks Pete
Hoodlum Posted April 1 Posted April 1 And here I thought Fairfax had completely exited the Toys R Us business. https://www.lakelandtoday.ca/national-business/toys-r-us-canada-gets-court-permission-to-put-itself-up-for-sale-seek-investors-12090285 However, Allied World Specialty Insurance Company, a firm that insured many of the retailer’s suppliers against nonpayment, had qualms with the process Toys “R” Us Canada proposed. Allied World, which has received more than $66 million in claims from 36 Toys “R” Us suppliers, has previously hinted in court that it wants more scrutiny of Putman Investments. Allied said Putman sold five properties valued at $42 million to a related party for $38 million in the lead up to the company’s creditor protection filing.
Hoodlum Posted April 2 Posted April 2 I am curious if anyone has access to the contents of Allied World article. https://www.theinsurer.com/ti/interview/iglesias-allied-world-positioned-to-perform-in-all-segments-of-the-cycle-2026-04-02/
Hoodlum Posted April 3 Posted April 3 (edited) Brian Young, Michael Wallace, Gobinath Athappan and others from Fairfax Asia visited Falcon Insurance in Thailand. Falcon Insurance had 30% growth in 2025. https://www.nationthailand.com/pr-news/pr-news/40064633 Edited April 3 by Hoodlum
thedanmancan Posted April 4 Posted April 4 On 3/29/2026 at 4:08 AM, Viking said: I look at Fairfax's insurance operations using two different buckets: Insurance and Re-insurance (ongoing) Runoff Insurance and re-insurance - great business. Runoff - shitty business (especially since they sold much of the 'good stuff' a couple of years ago). Each year we get adverse development from runoff. I treat that in my earnings estimate as an annual expense - just like interest expense. It runs about $250 million per year (on average). A little higher in some years. A little lower in others. This is not new news. A question I have is if they have been more aggressively trying to settle/wind this exposure down in recent years. Just a feeling I have reading between the lines of how they talk about it. When they report results, Fairfax lumps runoff together with Eurolife's life insurance business (kind like an 'other' bucket). I like this separation from going insurance/reinsurance. But it does muddy the water when looking at the total insurance business. With the sale of the Eurolife's life insurance business it will be interesting to see how they continue to report runoff. Importantly, the ongoing insurance/reinsurance business has exploded in size over the past 8 years. At the same time, with the sale of Riverstone Europe, the size of the runoff business is much smaller. Put these two developments together: runoff is nothing I worry about. For me it is an annual expense that is shrinking in importance over time (in terms of Fairfax's overall business). Now when I followed Fairfax 25 years ago, runoff was a big deal. And $200 million in adverse development meant something. Not so much today. Fairfax has done an amazing job of pivoting their insurance business (growing the good stuff). Yes, more work needs to be done. They are all over it. Can someone please explain why FFH continues to carry the run-off book? I get that the aim is for investment returns from the float to more than compensate for the losses on the book but isn’t this inconsistent with their stated goal of underwriting profitability? Why don’t they sell the book off and instead has expressed interest expanding it? Maybe one to ask about at the AGM. I am currently not able to make this year’s. Hope to be able to go someday and meet some/all of you!
nwoodman Posted April 4 Posted April 4 (edited) On 4/2/2026 at 8:50 AM, petec said: I recently reviewed Howard Hughes. Apologies for hijacking this thread but I would love any feedback from the board on how I have valued the insurance operation. Link is here. HHH is a complex business so my treatment of each segment is relatively light compared to the analysis that Fairfax gets on this board, but I hope it is directionally reasonable. Thanks Pete @petec, Great write up. Full disclosure: I am not an Ackman fan, so take the following with that bias noted. That said, I always appreciate your clarity of thought. Pershing committed $900 million at $100 a share, so the capital at risk is real and I do not dismiss it. But the fee architecture tells a different story. Pershing's advisory fee starts participating above a reference price of roughly $66, with a quarterly base fee on top. So while Ackman's equity may be underwater below $100, the manager can still be paid well before minorities fully benefit from a re-rating toward HHH's own internal NAV estimate of $118. The services agreement also includes a change-of-control make-whole provision approximating the present value of future fees, which speaks to how durable the arrangement is. For me, governance is not a line item in a SOTP. It is the discount rate applied to every other line item. The Berkshire comparison is where the thesis breaks for me. Buffett built the insurance operation first, proved underwriting discipline over multiple hard and soft cycles, and only then did the float become a compounding engine. HHH is attempting to invert that sequence. Vantage was founded in 2020 and the acquisition comes at the tail end of a hard market heading into a softer cycle. That is a young platform, acquired at a late point in the pricing environment, being positioned as the foundation of a compounding model. Pershing managing the Vantage portfolio without an incremental fee at the portfolio level is fair to acknowledge. But they are already being compensated under the broader services agreement, so the term "fee-free" deserves some scrutiny. Insurance compounding is not a structural outcome; it is a behavioural one. It requires patience in soft markets, a willingness to shrink, and the discipline to sit on cash. But you need the balance sheet to play that game. Everyone entering insurance believes they will underwrite with discipline, but the balance sheet is what allows you to actually maintain it through a full cycle. When the holdco above you is carrying close to $3 billion in debt and prefs, and the manager is compensated through a fee arrangement tied to market cap, the pressure to keep writing volume at inadequate prices can overwhelm intent. At Fairfax, underwriting discipline was proven over time and across cycles, and only then did float become a durable compounding engine. The stock did not re-rate because it was positioned as a compounder; it re-rated because the discipline was earned. HHH is explicitly modelling itself on what Berkshire and Fairfax built. That sets a high bar. The question is not whether the structure resembles a compounder, but whether the underlying behaviours, underwriting discipline, capital allocation patience, and governance , are actually present. The MPC assets are genuinely good. But the vehicle around them leaves me uneasy. The longer I watch this game, the wider the gap becomes between a well-designed balance sheet and what is actually defensible in insurance: underwriting culture, institutional memory, and discipline earned across cycles. That is something Ackman can aim to build over time, but it cannot be assumed or engineered upfront. As always appreciate the opportunity to think this through, and no doubt have missed some sitters in this reply Edited April 5 by nwoodman
SafetyinNumbers Posted April 6 Posted April 6 General question: Will the P/BV multiple touch 1.2x or 1.5x first? It’s at ~1.35x now.
UK Posted April 6 Posted April 6 (edited) 30 minutes ago, SafetyinNumbers said: General question: Will the P/BV multiple touch 1.2x or 1.5x first? It’s at ~1.35x now. I would vote for the 1.5. I think the 1.2 is more representative of a 'new floor' rather than some kind of normal valuation it was? 1.5 would be more appropriate for new normal valuation (but also not the ceiling:)). Edited April 6 by UK
SafetyinNumbers Posted April 6 Posted April 6 1 hour ago, UK said: I would vote for the 1.5. I think the 1.2 is more representative of a 'new floor' rather than some kind of normal valuation it was? 1.5 would be more appropriate for new normal valuation (but also not the ceiling:)). The recent P/BV multiple peaked out at 1.69x in July 2025. So far it has corrected as low as 1.3x BV. I used 1.5x BV to bookend as that seems to be around the top multiple that FFH has paid for its shares. I don’t think we’ll see multiple expansion beyond that until the next hard market. Thankfully, the BVPS growth means the stock can hang in even if the multiple contracts more.
Duke In Shadows Posted April 6 Posted April 6 first thing every new person looking at FFH should understand. Truly amazing allocation. https://x.com/DukeInShadows/status/2041222481772515794?s=20
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