Here’s Why Rhizome Partners Increased its Stake in Fairfax Financial (FRFHF)

Rhizome Partners, an investment management firm, published its fourth-quarter 2021 investor letter – a copy of which can be downloaded here. For the fourth quarter of 2021, Rhizome Partners generated a net gain of 6.7% versus an 11.0% gain for the Standard & Poor’s 500 Index and a 16.2% gain for the National Association of Real Estate Investment Trusts (NAREIT) Index. For the year, Rhizome Partners Class B returned 24.9% versus 28.7% for the S&P 500 and 41.3% for the NAREIT. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.

Rhizome Partners, in its Q4 2021 investor letter, mentioned Fairfax Financial Holdings Limited (NYSE: FRFHF) and discussed its stance on the firm. Fairfax Financial Holdings Limited is a Toronto, Canada-based insurance company with a $12.6 billion market capitalization. FRFHF delivered a 0.90% return since the beginning of the year, while its 12-month returns are up by 21.11%. The stock closed at $496.54 per share on February 23, 2022.

Here is what Rhizome Partners has to say about Fairfax Financial Holdings Limited in its Q4 2021 investor letter:

“We recently added a 2% position in Fairfax Financial, having attended Fairfax annual shareholder meetings for the past decade. Despite our continued interest, we never owned shares—largely because of Fairfax’s obsession with shorting the S&P 500. A few key changes prompted us to start buying shares: We’re entering a hard market for property and casualty insurance. Fairfax has gotten rid of the S&P 500 shorts and plans to IPO its Indian technology investment, Digits. We believe Fairfax may finally rerate after trading in a narrow range for the past decade.”

Iakov Filimonov/Shutterstock.com

Our calculations show that Fairfax Financial Holdings Limited (NYSE: FRFHF) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. Fairfax Financial Holdings Limited (NYSE: FRFHF) delivered an 8.20% return in the past 3 months. In January 2022, we also shared another hedge fund’s views on FRFHF 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.