ASB Partners Q225 Letter
Letter sent to LPs summarizing the performance of ASB Partners for Q225 with an update on the $FPH thesis...Please see the risk disclosures.
July 10, 2025
Dear Limited Partner,
For the quarter and year-to-date ending 6/30/2025, ASB Partners’ unaudited net results were +8.9% and +14.3%, respectively. The following tables summarize various performance and concentration metrics.
Selected Portfolio Discussion
Update to Five Point Holdings Thesis ($FPH)
Five Point Holdings, LLC ($FPH) develops mixed-use planned communities in Orange County, Los Angeles County, and San Francisco County. The company operates through three segments: Valencia, San Francisco, and Great Park. It sells residential and commercial land sites to homebuilders and commercial developers.
Five Point Holdings reported Q125 Earnings on 4/24/2025. It was a strong quarter with a bottom-line beat of 20%:
On the same day, this was the headline in the WSJ:
What explains the divergence? Three words: Location, Location, Location. Great Park, their most advanced project, sits on some of the most valuable real estate remaining in Irvine/Orange County, an affluent neighborhood south of metropolitan Los Angeles.
Great Park is a master-planned community comprising eight distinct communities. Luna, which drove the strong earnings in Q125, is the last community out of eight to be developed:
In Q125, Five Point sold acres for an average of $11.8mm/acre.
Approximately 100 acres are remaining in the project, and Five Point owns 42% of the economic interest in Great Park. The Enterprise Value (EV) of the entire company, at $5.80/share, is approximately $850 million on a fully diluted basis.
More importantly, for the rest of 2025, they expect to meet their guidance of $200mm in net income:
The momentum and demand are accelerating at Great Park despite inflationary pressures and stubbornly high mortgage rates, with record homesites and homes sold in Q125:
There is at least 4-5 years of land inventory in Great Park, given the opportunity to rezone commercial to residential land:
Relative to the opportunity at Great Park, Five Point’s cheapness speaks for itself, but two other assets are just getting started: Valencia and Candlestick. Bob Robotti from Robotti Value Investors presented on the company in January and provided a nice summary of the whole story:
A potential overhang for the stock is the $525 million 10.5% senior note (callable at 102), which sits at the top of the capital structure. After acquiring a controlling interest in a Land Bank in late June, Five Point still has approximately $450 million in cash, which can be used to deleverage if interest rates don’t come down.
To quote Warren Buffet: “The secret of sound investing can be distilled into three words: Margins of Safety.” Five Point Holdings has excellent downside protection, supported by current earnings and a cash-rich balance sheet, which they can use to pay down debt. On the upside, Great Park, Valencia and Candlestick should drive strong earnings for years as the company sells land for housing starved California.
I appreciate your support. Please let me know if you have any questions.
Sincerely,
Adam Buckstein
Managing Member
646-353-8314