Longleaf Partners Fund, managed by Southeastern Asset Management, has published its investor letter for the fourth quarter of 2025. The fund returned 3.35% during the quarter. This compares to a 2.66% return 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. Approximately 5% of its portfolio gained 20% or more, while 35% of the S&P 500 reached that level. The firm stated that overall market dynamics contributed to its relative underperformance. It focuses on actions to strengthen portfolio outcomes rather than chasing winners at the wrong time. The firm reiterated that building a portfolio of real companies during a period of excessive speculation will benefit all markets.
In the letter, the fund highlighted its position in The Kraft Heinz Company. Kraft Heinz manufactures and markets food and beverage products. Its stock closed at $23.53 per share on January 16, 2026. The stock had a one-month return of -2.57% and lost 19.61% of its value over the last 52 weeks. The company has a market capitalization of $27.851 billion.
Longleaf Partners Fund stated that Kraft Heinz was a detractor for 2025. The fund said the market is overly focused on the lack of near-term growth in North America. It believes the market is not focusing enough on the value-creating potential of the company's upcoming split into two businesses. One will be the higher-growth Global Taste Elevation Co., containing the Heinz brand, which should garner a teens EBITDA multiple. The other will be the stable remaining company comprised largely of North American grocery products, which can trade at the same multiple total Kraft currently trades today. The fund stated this would result in a combined stock price over $40 per share.
The fund also expressed being extremely pleased with Steve Cahillane being named CEO. It got to know Cahillane during its successful investment in Kellanova / Kellogg’s. The fund believes Cahillane is the perfect operator to lead Global Taste Elevation and help decide who should lead North American Grocery.
According to a database, 50 hedge fund portfolios held Kraft Heinz at the end of the third quarter, up from 45 in the previous quarter.