Longleaf Partners Fund, managed by Southeastern Asset Management, has issued its investor letter for the fourth quarter of 2025. The fund posted a return of 3.35% during the period. This compares to a 2.66% gain for the S&P 500 and a 3.81% return for the Russell 1000 Value Index.
The firm described 2025 as a challenging year without standout performers. About 5% of its portfolio gained 20% or more, while 35% of the S&P 500 reached that level. The overall market dynamic was cited for the fund's relative underperformance.
Longleaf Partners stated it focuses on actions to strengthen portfolio outcomes rather than chasing winners at the wrong time. The firm reiterated its belief that building a portfolio of real companies during a period of excessive speculation will benefit all markets.
In the letter, the fund highlighted Mattel, Inc. (NASDAQ:MAT) as a contributor for both the quarter and the year. Mattel stock closed at $21.04 per share on January 16, 2026. Its one-month return was 6.26%, and it gained 17.35% over the last 52 weeks. The company has a market capitalization of $6.779 billion.
Regarding Mattel, the letter stated: "Children’s toy, media, and consumer products creator Mattel was a contributor for the quarter and the year. The company is in its strongest position in over 10 years, and there are multiple ways to win. Over 80% of Mattel’s value comes from growing power brands like Hot Wheels, Barbie, and UNO. Mattel has a strong balance sheet which allowed material stock repurchases of $600 million in 2025, and we believe additional share repurchase will come at these discounted prices in 2026. Fundamentally, the toy business continues to grow and gross margins remain strong at 50%. Mattel has a promising owned IP (intellectual property) outlook for 2026 with the Masters of the Universe and Matchbox movies, along with two video games, being released."
According to database information, 34 hedge fund portfolios held Mattel at the end of the third quarter of 2025, up from 33 in the previous quarter. In the third quarter of 2025, Mattel detracted from the fund's performance due to a 16% drop in North American sales.