Original review: Helios Fairfax Partners
Tag for finding my other articles on this stock: HFP
Key takeaways
Book value per share up 12% y/y to $4.44 and TBVPS +13% to $3.45.
Strategic moves offer confirmation of underlying valuations.
Manager economics becoming slightly clearer.
Thesis and valuation update
This remains extremely cheap at 45% of book value and 59% of tangible book. As a reminder, tangible book is made up of investments and cash, while the intangibles represent Helios, the asset manager.
We have two new pieces of evidence that HFP’s carrying values can be trusted: Trone IPO’d at approximately 2x carrying value and I infer that African Specialty Risks was sold at or around carrying value.
Manager economics are slightly worse than I assumed in my review because other income (effectively consulting fees) did not recur. However, if Helios V reaches its $750m fundraising target (it is already halfway there), I think the manager will be approximately breakeven after other income and profitable after carry. That would be a major milestone.
Notes
BVPS +4% q/q and +12% y/y to $4.44.
TBVPS +6% q/q and 13% y/y to $3.45. TBVPS is growing faster than BVPS, as you would expect given intangibles are now fixed or amortising rather than marked to market. TBVPS is made up of investments and cash.
At the current share price around $2, p/bv is 46% and p/tbv is 59%.
Helios profitability
Recall Helios is the fund manager. If this can become profitable, HFP can grow book value faster and/or pay dividends. But Helios was only consolidated on Jan 1 so we only have 1q26 as a comparison base.
Management fees $6m, flat q/q; other income (consulting fees) $0, vs $3m last q; G&A $10m, also flat q/q.
Based on 1h26, management fees less G&A nets to -$16m. Helios V is targeting another $400m in AUM. That will effectively eliminate losses assuming 2% fees and some other income. But to get to sustained profitability before carry, Helios probably needs fee paying AUM in the $1.5-2bn range (from approx. $1bn today).
Portfolio moves - significant liquidity realised
Liquidation of Seven Rivers fund after a lifetime IRR of 31%; $47m in cash realised.
Trone IPO’d after the end of the quarter. During the quarter, Trone was revalued as the IPO process provided new pricing evidence. Even so, the IPO was well above the 2q mark and roughly 2x the 1q mark. As of today I estimate the share price is higher than the 2q mark by about 17c per HFP share. $18m in realised.
Helios IV announced the sale of Africa Specialty Risks, an insurance firm they cofounded in 2020. I believe this was a top-3 holding in the fund and it was mentioned as a positive driver of performance in both 2024 and 2025, and I think it was sold at carrying value because by my estimates the increase in HFP’s carrying value for Helios IV was almost exactly what you’d expect given the increase in value for Trone, which Helios IV also owns.
Fundraising
Helios CLEAR final close at $257m.
Helios IV continues to fundraise as expected, targeting $750m.
73% of Helios IV investors have reinvested into Helios V to date, providing 38% of the capital, with 62% coming from new investors - evidence that investors are loyal and that Helios’ investment in marketing is paying off with new clients.
Other
Another markup in HDV, the Ventures fund. Not big, but promising - this could be a source of big wins and/or become another recurring fund family.
Relocating support functions from Canada to London, where the manager is based.
IR is already better - now doing decks for each quarter, and commentary in press release is more aligned with industry standard metrics.
New $10m debt facility designed to fund HFP’s LP interest in Helios V. The lender gets 8% plus 30% of the residual value of the investment after the principal has been repaid. HFP gets 70% of the residual value. In effect HFP swaps some of the equity upside for a lower and fixed interest rate. (The marginal rate on HFP’s other debt facility with the same lender is SOFR +5.75%, or about 9.4% today.)
Thanks for reading - if you enjoyed reading this please like and restack, and do get in touch if you have questions.
Pete
Disclaimer: This post is for informational and educational purposes only. Building Arks is not licensed or regulated to provide any financial advisory service and nothing published by Building Arks should be taken as a recommendation to buy or sell securities, relied upon as financial advice, or treated as individual investment advice designed to meet your personal financial needs. You are advised to discuss your personal investment needs and options with qualified financial advisers. Building Arks uses information sources believed to be reliable, but does not guarantee the accuracy of the information in this post. The opinions expressed in this post are those of the publisher and are subject to change without notice. The publisher may or may not hold positions in the securities discussed in this post and may purchase or sell such positions without notice.