Here’s Why Artisan Partners Repurchased Arch Capital Group (ACGL)

Artisan Partners, a high value-added investment management firm, published its “Artisan Value Fund” fourth quarter 2021 investor letter – a copy of which can be downloaded here. A return of 4.48% was recorded by its Investor Class: ARTLX, 4.55% by its Advisor Class: APDLX, and 4.54% was gained by its Institutional Class: APHLX for the fourth quarter of 2021, all below the Russell 1000® Value Index that delivered a 7.77% return, and the Russell 1000® Index that gained 9.78% for the same period. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.

Artisan Value Fund, in its Q4 2021 investor letter, mentioned Arch Capital Group Ltd. (NASDAQ: ACGL) and discussed its stance on the firm. Arch Capital Group Ltd. is a Hamilton, Bermuda-based insurance company with an $18.0 billion market capitalization. ACGL delivered a 6.95% return since the beginning of the year, while its 12-month returns are up by 32.72%. The stock closed at $47.54 per share on February 25, 2022.

Here is what Artisan Value Fund has to say about Arch Capital Group Ltd. in its Q4 2021 investor letter:

“We repurchased global insurer Arch Capital in Q1 2020 when the pandemic began. As a long-time holding, Arch is a company we know well. It’s an industry leader capably managed by a long-tenured team that has achieved an enviable underwriting record, while at the same time seeking opportunistic growth. Arch’s insurance business is a three-legged stool, with lines covering primary insurance, reinsurance and mortgage insurance. Primary insurance and reinsurance are influenced by conditions in the property casualty industry, where pricing is currently positive following concerns about inadequate pricing over the past few years. The mortgage insurance industry is working its way through complications wrought by the pandemic, but in contrast to other underwriters that pulled back from writing business, Arch has leaned into this business as it saw an opportunity to earn excess returns—once again showing management’s acumen for creating value during a disruption.”

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Our calculations show that Arch Capital Group Ltd. (NASDAQ: ACGL) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. ACGL was in 33 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 31 funds in the previous quarter. Arch Capital Group Ltd. (NASDAQ: ACGL) delivered a 13.49% return in the past 3 months.

In February 2022, we also shared another hedge fund’s views on ACGL in another article. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.

Disclosure: None. This article is originally published at Insider Monkey.