Third Avenue Small-Cap Value Fund’s Updates on Ambac Financial Group (AMBC)

Third Avenue Management, an investment management company based in New York City, released its “Third Avenue Small-Cap Value Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. During the quarter, the fund returned 7.18% compared to 8.97% for the MSCI USA Small-Cap Value Index (the “Index”) and 12.60% return for the Russell 2000 Value Index. Positive contributions from a wide range of businesses led the fund’s performance in the quarter. For more information on the fund’s top picks in 2025, please check its top five holdings.

In its third-quarter 2025 investor letter, Third Avenue Small-Cap Value Fund highlighted stocks such as Ambac Financial Group, Inc. (NYSE:AMBC). Ambac Financial Group, Inc. (NYSE:AMBC) is a financial services holding company. The one-month return of Ambac Financial Group, Inc. (NYSE:AMBC) was 3.11%, and its shares lost 26.73% of their value over the last 52 weeks. On November 5, 2025, Ambac Financial Group, Inc. (NYSE:AMBC) stock closed at $8.28 per share, with a market capitalization of $384.206 million.

Third Avenue Small-Cap Value Fund stated the following regarding Ambac Financial Group, Inc. (NYSE:AMBC) in its third quarter 2025 investor letter:

"Ambac Financial Group, Inc. (NYSE:AMBC) (“Ambac”) is a position we have previously described as being in a state of significant transition. During the quarter, the company and Oaktree Capital Management finally received Wisconsin regulatory approval to complete the sale of Ambac’s legacy financial guarantee business to Oaktree. Although the approval arrived later than originally anticipated, the approval enabled a rapid closure of the transaction and a significant cash inflow to Ambac. In coming quarters, Ambac’s balance sheet will for the first time begin to reflect Ambac’s “go-forward” business. Less anticipated, however, was an announcement almost immediately thereafter disclosing that Ambac will purchase supplemental health program manager, ArmadaCare, from SiriusPoint Ltd. for $250 million, funded in large part with the proceeds from the sale of its financial guarantee business.

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Ambac Financial Group, Inc. (NYSE:AMBC) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 26 hedge fund portfolios held Ambac Financial Group, Inc. (NYSE:AMBC) at the end of the second quarter, compared to 31 in the previous quarter.  While we acknowledge the potential of Ambac Financial Group, Inc. (NYSE:AMBC) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Ambac Financial Group, Inc. (NYSE:AMBC) and shared the list of best beaten down stocks to buy. Third Avenue Small-Cap Value Fund initiated a position in Ambac Financial Group, Inc. (NYSE:AMBC) during Q4 2024. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.

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