Investment management company First Pacific Advisors recently released its fourth-quarter 2025 investor letter for “The FPA Crescent Fund”. A copy of the letter can be downloaded here. The company primarily avoids speculative sectors of the market and adopts a “value-aware” perspective with an emphasis on long-term investments. In Q4, the Fund returned 3.09%, bringing the yearly returns to 17.65%. The twelve-month return was 79.0% of the global market, MSCI AWCI, exceeding the average net risk exposure of 64.9%. In addition, you can check the Fund’s top five holdings to see its best picks for 2025.
In its fourth-quarter 2025 investor letter, The FPA Crescent Fund highlighted stocks like Microsoft Corporation (NASDAQ:MSFT). Microsoft Corporation (NASDAQ:MSFT) is a multinational software company that develops and supports software, services, devices, and solutions. The one-month return of Microsoft Corporation (NASDAQ:MSFT) was -9.00%, and its shares gained 4.71% of their value over the last 52 weeks. On January 30, 2026, Microsoft Corporation (NASDAQ:MSFT) stock closed at $430.29 per share, with a market capitalization of $3.195 trillion.
The FPA Crescent Fund stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its fourth quarter 2025 investor letter:
Now, as an example of a tough question currently being posed by the market, we submit Microsoft Corporation (NASDAQ:MSFT) , a company we actually owned from 2010 to 2020. To begin, we hold management in the highest regards, particularly the CEO and CFO, who created tremendous value for us during our ownership. When we originally purchased Microsoft back in 2010, the valuation was less than 10x after-tax earnings after subtracting the cash on the balance sheet. The question we had to ask at the time was whether Microsoft was a melting ice cube, or could the company deliver an equity-type rate of return even if earnings never grew again. To our regret, we sold Microsoft too early, failing to appreciate how technological developments, particularly those of AI/cloud, would transform the business.
