Highwood Value Partners' latest semiannual review for the second half of 2025 unveils their strategic investment landscape. The firm maintains an 83% equity allocation across 11 carefully selected companies, adhering strictly to a no-leverage policy. A core tenet of their strategy is to invest in businesses that are financially robust, typically boasting net-cash balance sheets. The review delves into the performance of key holdings, including Burford Capital, which thrives by financing commercial litigation in exchange for a share of favorable outcomes, and Borr, whose initial rapid fundamental improvements have since stabilized in line with original projections. Additionally, GetBusy emerges as a significant value driver, consistently achieving an impressive 15% compound annual growth rate in organic revenue over the past four years, surpassing the firm's initial growth expectations.
Portfolio Performance and Strategic Holdings Spotlight
In a recent communication to its investors, Highwood Value Partners provided a comprehensive update on their investment activities for the latter half of 2025. The firm, known for its disciplined and value-oriented approach, reported an 83% allocation of its capital to the equity of 11 distinct companies. A cornerstone of their investment philosophy is the rigorous selection of companies with strong financial health, exemplified by their collective net-cash balance sheets. This conservative stance is further reinforced by their unwavering commitment to avoiding leverage. Among the notable holdings, Burford Capital stands out for its unique business model. Burford specializes in funding commercial litigation cases, generating revenue by securing a portion of the settlements or court awards. This strategy capitalizes on the growing market for litigation finance. Another key company in the portfolio is Borr, an energy sector participant whose operational and financial metrics have shown an interesting trajectory. While Borr initially surpassed Highwood's performance expectations, its fundamentals have since moderated to align with the firm's original analytical framework. Moreover, the review highlighted GetBusy, a technology firm, as a significant contributor to the portfolio's overall value. GetBusy has demonstrated exceptional organic revenue growth, achieving a 15% CAGR over the past four years, a performance that has modestly exceeded Highwood's initial projections.
This detailed portfolio review from Highwood Value Partners offers valuable insights into their strategic investment choices and highlights the importance of fundamental analysis and a disciplined investment approach. The firm's focus on well-capitalized companies and avoidance of leverage underscores a commitment to risk management. The performance of companies like Burford Capital and GetBusy demonstrates the potential for significant returns from specialized and growth-oriented businesses, while the nuanced development of Borr's fundamentals illustrates the dynamic nature of market expectations and the need for continuous assessment. For investors, this serves as a powerful reminder of how a long-term, value-driven strategy, combined with opportunistic concentration, can navigate market complexities and generate compelling returns.