ASB Partners Q325 Letter
Letter sent to LPs summarizing the performance of ASB Partners for Q325 with an update on the $FPH thesis...Please see the risk disclosures.
October 6, 2025
Dear Limited Partner,
For the quarter and year-to-date ending 9/30/2025, ASB Partners’ unaudited net results were +4.36% and +19.3%, respectively. The following tables summarize various performance and concentration metrics.
Selected Portfolio Discussion
Five Point Holdings ($FPH) Write Up
Description
Five Point Holdings ($FPH) is one of the largest owners and developers of mixed-use planned communities (“MPCs”) in coastal California. It was last written up on the VIC in September of 2023, which provides great context for the history of the company and why it’s been a disappointment for equity investors. However, there have been several developments in the last 12-18 months that have favorably shifted the risk-reward. This report will focus on those key developments and the asymmetry in the equity. Bottom line: FPH has a ~$1bil Enterprise Value and will generate at least $600-800 million in free cash flow from its most developed MPC in Irvine, CA over the next 3-5 years, which should provide decent downside protection. On the upside, there are four shots on goal which could drive significant share price appreciation: The new JV with Hearthstone Land Bank, Valencia, Candlestick Park/Navy Yard, and the lawsuit with Tetra Tech (FPH is seeking $3-4 billion in damages with a trial date this upcoming December).
First, let’s discuss the downside protection coming from Great Park, which is FPH’s most advanced MPC. Lennar (40% shareholder in FPH) originally acquired the land for Great Park from the Marine Corps in 2005 and contributed the asset to FPH upon its formation. Construction began in 2013, and there are 3-5 years left of sales. This is very, very desirable southern CA real estate (Q225 per acre sales >$11mm/acre). That’s not a mistake!
The value of the land has grown at a 19% CAGR since 2020:
More importantly, Great Park will provide a stream of cash flows for the next 3-5 years. FPH generated net income of $177mm in 2024 (more than 100% coming from Great Park) and has guided to generate a similar amount this year:
This isn’t accounting sleight of hand, but real earnings power that has enabled FPH to de-leverage and set them up for the favorable refi that just occurred:
Based upon the 200 acres that are left at Great Park, management estimates that there $600-800 million of profits for their 42% interest, which is material given the $1 billion EV.
Update on Recent Events
Refinance of Balance Sheet
On September 15, 2025, FPH announced that it refinanced $523mm of its 10.5% senior notes due in 2028 with $450mm of 8% senior notes due in 2030. After paying off $75mm in gross debt, FPH will have ~$381mm of cash or net debt of <$100mm. This refi is a prudent move given some of the macro uncertainties facing housing (even though CA is its own bubble). FPH is also working on expanding its revolver from $125mm, which is undrawn. With the maturities pushed out to 2030, a major overhang on the equity has been removed.
JV with Hearthstone Land Bank
On June 20, 2025, FPH announced that they are investing $56mm to acquire a 75% interest in Hearthstone, an institutional investment manager that invests in raw land. Hearthstone has managed real estate investments for over 50 public and private pension funds, endowments, and investment banks. There’s a natural synergy between FPH’s legacy business and Hearthstone’s strategy.
Here’s a good summary of the logic behind the transaction:
Relative to their lumpy development business, Hearthstone should provide a stable and recurring stream of fees, which will provide a nice offset to the corporate G&A when the land business softens.
Valencia
Valencia is FPH's largest MPC. Its location is not as good as Great Park, but Southern CA homebuilders are starved for new homesites:
In their investor deck for the recent financing, FPH disclosed that they are in the process of obtaining regulatory approvals to add thousands of additional homesites, which should improve the economies of scale and the overall economics of the project:
In the unlikely event these approvals don’t materialize (even Gavin Newsom has been red pilled!), we would expect the board to push management to put the project into hibernation until they can earn an attractive return.
Candlestick and SF Shipyard
The most exciting call option in the portfolio is Candlestick and the SF Shipyard. A fraudulent environmental cleanup plagued the project for years, but construction is slated to begin next year:
FPH owns 90 acres at Candlestick (not including the 117 acres at the Shipyard), and the last recorded land sale within the Candlestick site was a 3.6-acre residential site at $25.4mm/ acre. Based on those numbers, this project could generate between $2 billion and $ 4 billion in revenue. Management has indicated that there is an opportunity for substantial development reimbursement through public financing vehicles, but FPH and/or financing partners will be needed to complete the project.
Tetra Tech Litigation / Hunters Point Litigation
In conjunction with Lennar’s original plan to develop the site, the Navy hired Tetra Tech to conduct testing and remediation of toxic radiological waste at the San Francisco Shipyard, a former Navy facility. Regulators later alleged that Tetra Tech supervisors took soil samples from clean areas and submitted them as if they came from contaminated zones. In 2018, two Tetra Tech supervisors pleaded guilty and went to prison for falsifying records.
The remaining 408 acres of the San Francisco Shipyard, originally expected to be transferred to FPH between 2019 and 2022, were indefinitely delayed. In February 2020, FPH sued both Tetra Tech and the U.S. government, seeking to recover losses tied to the delays, indemnification for defending related suits, and other costs associated. The case is headed to trial on December 8, 2025, with FPH seeking $3–4 billion in damages. The lawsuit is only upside for FPH because the site has already been remediated and the project is moving forward.
Conclusion
While it’s difficult to precisely quantify the upside in FPH, the many shots on goal increase the probability that the stock could be worth multiples of its current price. A recent Form 4 filing for executive RSUs gives us a sense of what management thinks the stock is worth. The RSUs vest between $11.50/share to $22.50/share:
In conclusion, with a fully diluted market cap of $975mm, <$100mm of net debt, and ~$200mm of net income for the next couple of years, there’s plenty of downside protection relative to the many call options that could drive the upside, making FPH an asymmetric bet.
I appreciate your support. Please let me know if you have any questions.
Sincerely,
Adam Buckstein
Managing Member
646-353-8314
Fascinating developments.