Longleaf Partners
Small-Cap Fund

Experience

Joined

Location

Education

Fund closed to new investors since 1997.

Longleaf Partners Small-Cap Fund seeks to generate superior long-term investment returns and minimize the risk of permanent capital loss by investing primarily in a concentrated number of small-cap US companies that meet our Business, People, Price investment criteria.

We invest with a three-to-five-year investment horizon and take advantage of short-term volatility to own high quality businesses, run by capable management teams, whose stock prices we believe are trading temporarily at a discount. Our extensive, global network allows us to engage with our management partners to help drive long-term value creation.

1 (800) 445-9469

Longleaf Partners Small-Cap Fund

Fund overview (Updated 9/30/19)

Inception Date

2/21/1989

5 Yr Avg. Turnover

32%

Minimum

$10,000

Net Assets

$3.3 billion

Total Holdings

17

Ticker

LLSCX

Expense Ratio

0.92%

Wtd. Avg. Market Cap

$4.9 billion

CUSIP

54306920-7

Portfolio

Fund Information

  • The Fund’s objective is long-term capital growth. Current income is not an objective.
  • The Fund generally invests in companies with market capitalizations over $1 billion with at least 80% of its assets in companies whose market capitalizations at the time of purchase are considered small cap, as defined in the prospectus.
  • The Fund may invest up to 30% of its assets in non-U.S. securities, which could include emerging market issuers, and may achieve its exposure to non-U.S. securities through investing in American depositary receipts (ADRs).
  • The Fund primarily owns common stock or securities convertible into common stock but may purchase other types of securities.
  • The benchmark index is Russell 2000, though portfolio construction is 100% bottom-up and benchmark-agnostic.
  • If we cannot find qualifying investment opportunities, we will hold cash.
  • The Fund is non-diversified under federal securities laws and generally invests in 18-22 companies.
  • Southeastern employees, related parties and Longleaf trustees have a collective investment of over $150 million.
  • The Fund’s assets are held primarily by institutional clients.
  • Our relationships are long-term. The average direct account tenure is between 5-10+ years.

Fund Managers

O. Mason
Hawkins, CFA

Chairman

More about me
You want to pursue a career in investing for the intellectual challenge, for the reward of being correct about your investment decisions and for the opportunity to help others.

Chairman Mason Hawkins founded Southeastern in 1975 and oversees the company with 47 years of investment experience. He is a co-portfolio manager on the Longleaf Partners, Small-Cap, International and Global Funds, as well as the Longleaf Partners Global UCITS Fund. Mr. Hawkins is a member of Southeastern’s Executive Committee. Prior to the Southeastern’s founding, he served as Director of Research for both Atlantic National Bank in Jacksonville, FL and First Tennessee Investment Management in Memphis. Mr. Hawkins graduated with a bachelor’s degree in Finance from the University of Florida and received his master’s in Business Administration in Finance from the University of Georgia.

47
1975
Memphis
BA (Finance)
University of Florida
MBA (Finance)
University of Georgia

G. Staley
Cates, CFA

Vice-Chairman

More about me
We want to be a kind of researcher’s nirvana, which we think starts with analysts being able to look at any idea anywhere in the world.

Mr. Cates serves as Vice-Chairman of Southeastern and has 33 years of investment experience. He is a co-portfolio manager on the Longleaf Partners, Small-Cap, International and Global Funds, as well as the Longleaf Global UCITS Fund. Mr. Cates is a member of Southeastern’s Executive Committee. Prior to joining the company in 1986, he worked as a Research Associate at Morgan, Keegan & Co. in Memphis. Mr. Cates graduated from the University of Texas with a bachelor’s degree in Business Administration.

33
1986
Memphis
BA (Business Administration)
University of Texas

Ross
Glotzbach, CFA

CEO and Head of Research

More about me
Southeastern is different because we are focused on a single investment discipline – we are long-term, concentrated, engaged value investors.

Mr. Glotzbach serves as CEO and Head of Research and has 16 years of investment experience. He is a co-portfolio manager on Longleaf Partners, Small-Cap and Global Funds, as well as the Longleaf Partners Global UCITS Fund. Mr. Glotzbach is a member of Southeastern’s Executive Committee. Prior to joining Southeastern in 2004, he was a Corporate Finance Analyst at Stephens Inc. in Little Rock, AR. Mr. Glotzbach graduated from Princeton University with a bachelor’s degree in Economics.

16
2004
Memphis
BA (Economics)
Princeton University

Investment Discipline

Southeastern manages all mandates and portfolios using the same investment discipline.

Our Investment Approach

We are long-term, concentrated, engaged value investors.

The Investment Process

We are fundamental, bottom-up business appraisers.

Risk Management

We seek to minimize the risk of permanent capital loss.

Top 10 Holdings

at 9/30/19

Holding Country Industry Percent
CenturyLink United States Diversified Telecommunication Services 8.8%
Summit Materials United States Construction Materials 8.5%
Eastman Kodak United States Technology Hardware, Storage & Peripherals 7.9%
Graham Holdings United States Diversified Consumer Services 6.7%
GCI Liberty United States Diversified Telecommunication Services 5.8%
Mattel United States Leisure Products 5.1%
PotlatchDeltic United States Real Estate Investment Trusts (REITs) 4.8%
Lazard United States Capital Markets 4.6%
OCI Netherlands Chemicals 4.1%
CNX Resources United States Oil, Gas & Consumable Fuels 4.1%
Total 60.4%
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Primary Contributors to Return

From 7/1/19 to 9/30/19

Holding Percent
Summit Materials 1.17%
CenturyLink 0.66%
Formula One Group 0.53%

Primary Detractors to Return

From 7/1/19 to 9/30/19

Holding Percent
Neiman-Marcus Group -1.40%
OCI -0.68%
Actuant -0.47%

Portfolio Composition

at 9/30/19

Equities & Other 79.4%
Bonds 6.7%
Cash 13.9%
Total 100%
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Sector Composition

at 9/30/19

Consumer Discretionary 19.5%
Communication Services 18.6%
Materials 12.6%
Real Estate 12.1%
Information Technology 10.8%
Financials 4.6%
Energy 4.1%
Industrials 3.8%
Cash 13.9%
Total 100%
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View current month-end performance. Returns reflect reinvested capital gains and dividends but not the deduction of taxes an investor would pay on distributions or share redemptions. The performance data quoted represents past performance and is no guarantee of future results. The return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the past performance quoted.

 

Before investing in any Longleaf Partners fund, you should carefully consider the Fund’s investment objectives, risks, charges, and expenses. The Prospectus and Summary Prospectus contain this and other important information. Please read the Prospectus and Summary Prospectus carefully before investing.

The above holdings do not represent all of the securities purchased, sold, or recommended for the Fund. Discussion of particular investments is not a recommendation to buy or sell any security and holdings are subject to change.

 

Performance

Quarter-end Performance

at 09/30/19

Fund Index 1 MO QTR YTD 1 YR 3 YR 5 YR 10 YR 20 YR Incept †
Total Returns Average Annual Returns
Small-Cap Fund 3.07% 0.17% 9.46% -7.56% 5.03% 5.56% 11.78% 9.58% 10.44%
Russell 2000 Index 2.08% -2.40% 14.18% -8.89% 8.23% 8.19% 11.19% 7.99% 9.27%
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Month-end Performance

at 11/30/19

Fund Index 1 MO QTR YTD 1 YR 3 YR 5 YR 10 YR 20 YR Incept †
Total Returns Average Annual Returns
Small-Cap Fund 2.34% 8.18% 14.89% 4.00% 5.40% 5.35% 12.43% 9.79% 10.56%
Russell 2000 Index 4.12% 9.08% 22.01% 7.51% 8.57% 8.22% 12.38% 8.02% 9.45%
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Daily Price

at 12/06/19

Fund Ticker Inception Date Price Change % Change YTD Return
Small-Cap Fund LLSCX 02/21/89 23.93 0.32 1.36% 15.03%
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Calendar Year Total Returns

From 1989 to 2018

Year 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991* 1990* 1989*†
Fund -6.52% 8.99% 20.48% -6.05% 12.49% 30.45% 22.96% 1.79% 22.32% 49.31% -43.90% 2.80% 22.33% 10.75% 14.78% 43.85% -3.74% 5.45% 12.80% 4.05% 12.71% 29.04% 30.64% 18.61% 3.64% 19.83% 6.87% 26.31% -30.05% 21.51%
Russell 2000 Index -11.01% 14.65% 21.31% -4.41% 4.89% 38.82% 16.35% -4.18% 26.85% 27.17% -33.79% -1.57% 18.37% 4.55% 18.33% 47.25% -20.48% 2.49% -3.02% 21.26% -2.55% 22.36% 16.49% 28.45% -1.82% 18.88% 18.41% 46.04% -19.48% 9.06%
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† Inception date is 2/21/89.

Returns reflect reinvested capital gains and dividends but not the deduction of taxes an investor would pay on distributions or share redemptions. The performance data quoted represents past performance and is no guarantee of future results. The return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, shares may be worth more or less than their original cost. Current performance may be lower or higher than the past performance quoted.

Before investing in any Longleaf Partners fund, you should carefully consider the Fund’s investment objectives, risks, charges, and expenses.  The Prospectus and Summary Prospectus contain this and other important information. Please read the Prospectus and Summary Prospectus carefully before investing.

Risks
The Longleaf Small-Cap Fund is subject to stock market risk, meaning stocks in the Fund may fluctuate in response to developments at individual companies or due to general market and economic conditions. Also, because the Fund generally invests in 15 to 25 companies, share value could fluctuate more than if a greater number of securities were held.  Smaller company stocks may be more volatile with less financial resources than those of larger companies. The total expense ratio for the Longleaf Partners Small-Cap Fund is 0.92%.

* Fund was managed by a different portfolio manager prior to 3/31/91.

Russell® is a trademark of Russell Investment Group.

Resources
Distributions

Distributions

Most of Longleaf’s distributions historically have been long-term gains, reflecting Southeastern’s successful results and long investment horizon. Per share amounts are rounded. For tax return preparation, please use your Form 1099-DIV or see the 2018 Sources of Distribution.

Year Total Net Income ST Gains LT Gains Return Cap Ex-Date Reinvest
2019 $ 1.4974 $ - $ - $ 1.4974 $ - 11/27/19 $ 24.02
2018 0.7636 0.7636 - - - 12/28/18 22.0100
3.2415 - 0.2712 2.9703 - 11/30/18 25.2600
2017 0.4541 0.4541 - - - 12/28/17 27.7400
1.8729 - - 1.8729 - 11/16/17 27.5200
2016 0.0959 0.0639 - 0.0320 - 12/29/16 27.7200
4.8550 - 0.1350 4.7200 - 11/16/16 27.2200
2015 0.0400 - - 0.0400 - 12/29/15 27.3900
1.5550 - - 1.5550 - 11/12/15 26.9400
2014 6.0200 - - 6.0200 - 11/12/14 30.0500
2013 4.9600 - 0.2560 4.7040 - 11/8/13 30.8800
2012 0.0300 0.0300 - - - 12/28/12 28.5400
2.0190 - 0.1440 1.8750 - 11/8/12 27.6200
2011 0.0100 0.0047 0.0053 - - 12/29/11 25.3100
1.7700 - - 1.7700 - 11/8/11 25.4700
2010 0.1100 0.1100 - - - 12/29/10 26.7000
2009 NONE - - - - - -
2008 0.1300 0.0840 - - 0.0460 12/30/08 14.2100
0.4400 0.0009 - 0.4391 - 11/6/08 14.2300
2007 0.2000 0.1435 - 0.0565 - 12/27/07 27.1200
3.9570 - 0.3170 3.6400 - 11/7/07 28.9400
2006 0.5570 0.5193 - 0.0377 - 12/27/06 30.4300
2.3270 - 0.0770 2.2500 - 11/7/06 29.9400
2005 0.5700 0.5700 - - - 12/28/05 27.1700
5.2700 - - 5.2700 - 11/9/05 26.5700
2004 0.4250 0.4250 - - - 12/29/04 29.8800
2.7000 - - 2.7000 - 11/11/04 29.2500
2003 0.4350 0.4350 - - - 12/29/03 28.8200
2002 0.0184 - - 0.0184 - 11/13/02 19.9300
2002 0.5250 0.5250 - - - 12/26/02 20.5200
2001 0.2400 0.2372 - 0.0028 - 12/28/01 21.8700
1.8436 - 0.0086 1.8350 - 11/14/01 20.8900
2000 0.0486 0.0452 - 0.0034 - 12/28/00 22.6000
0.1118 - 0.1031 0.0086 - 11/8/00 21.7900
1999 0.0780 0.0780 - - - 12/29/99 20.1400
2.5400 - 0.2150 2.3250 - 11/9/99 20.1200
1998 0.1650 0.1650 - - - 12/30/98 21.5000
2.7700 - 0.0560 2.7140 - 11/18/98 21.2700
1997 0.8660 0.1800 0.3890 0.2970 - 12/31/97 22.1800
1996 1.0286 0.0236 0.0210 0.9840 - 12/27/96 17.8200
1995 1.2840 0.1180 0.0270 1.1390 - 12/27/95 14.4300
1994 0.7000 - 0.1200 0.5800 - 12/21/94 13.0970
1993 0.1693 - - 0.1693 - 12/29/93 13.3260
1992 NONE - - - - - -
1991 0.0600 0.0600 - - - 12/27/91 10.2650
1990 0.2620 0.2620 - - - 12/28/90 8.3800
0.3255 0.1000 0.2255 - - 6/29/90 11.7760
1989 0.0525 0.0525 - - - 12/28/89 12.6980
0.3600 - 0.3600 - - 11/3/89 12.6880
0.0900 0.0900 - - - 7/31/89 12.7590
1989
1989
1988
1987

2018 Distributions

Tax Reporting Information

ICI File Layouts

Data for intermediaries who process 1099s for their clients.

General Mutual Fund Distribution Information

All mutual funds must distribute earned income and realized capital gains annually to shareholders.

Tax treatment is the same whether shareholders receive cash or reinvested shares.

A fund's NAV declines by the distribution amount, but the decline is unrelated to performance since shareholders receive the difference in cash or additional shares.

Accurately tracking returns requires increasing the number of shares to account for reductions in NAV when distributions occur.

Capital gains reflect appreciation over the full period that the Fund held a security. Distributed gains have no relationship to either that year's Fund performance (a Fund could pay a distribution in a flat return year) or an individual's fund investment (all shareholders as of the distribution date receive the payout regardless of their purchase date or price).

Longleaf Distribution Information

Longleaf generally pays capital gains distributions in the first half of November and income in late December.

Most Longleaf shareholders reinvest their distributions, thereby maintaining account balances while owning more fund shares.

Longleaf generally posts capital gain distribution estimates on the website by mid-October.

Tax reporting information is mailed with 1099-DIV forms by early February.

Longleaf may penalize those who sell fund shares to avoid a distribution since they place a larger tax burden on remaining owners and potentially disrupt the fund's investment strategy.