Giverny Capital Bets on Insurance Platform TWFG Amid Tech-Driven Market Headwinds
In its recently released fourth-quarter investor letter, Giverny Capital Asset Management outlined a difficult period for its portfolio, which returned a mere 0.01% against the S&P 500's 2.66% gain. For the full year 2025, the fund returned 12.58%, trailing the index's 17.88% rise. The firm attributed the underperformance to its strategic underweight in the mega-cap technology stocks that dominated market returns, instead favoring smaller, niche leaders with strong fundamentals.
Amid this backdrop, Giverny spotlighted its position in TWFG, Inc. (NASDAQ: TWFG), an independent platform for personal and commercial insurance distribution. Despite the stock's recent struggles—down nearly 12% over the past month and roughly 16% over the last year—Giverny appears to be betting on a longer-term turnaround. The company, with a market cap of approximately $1.4 billion, closed at $24.99 per share on January 30, 2026.
"While the market's obsession with AI narratives has created a headwind for our holdings, we remain confident in the underlying earnings power and capital allocation of companies like TWFG," the letter stated. The firm noted that while TWFG did not make its list of the 30 most popular hedge fund stocks, it was held by 12 funds at the end of Q3 2025, down from 21 the prior quarter.
The investment highlights a classic divide in current markets: the chase for AI-linked growth versus a value-oriented focus on profitable, albeit less hyped, business models. TWFG operates in the fragmented insurance distribution sector, a space seen as ripe for consolidation and digital transformation, yet far from the spotlight of semiconductor or software giants.
Analyst & Investor Commentary:
"Sarah Chen, Portfolio Manager at Oakhaven Trust: 'Giverny's thesis is rational. TWFG's model is scalable, and the insurance distribution market is inefficient. This is a patient capital play, not a quarterly trade.'
"Marcus Thorne, Independent Financial Advisor: 'It's a contrarian pick, for sure. But in a rising rate environment that's pressured insurtech valuations, there's a logical case for a traditional, cash-flow positive intermediary.'
"David R. Klein, Editor at 'The Skeptical Investor' newsletter: 'This reeks of desperation to justify lagging returns. Doubling down on a stock that's down 16% while dismissing the AI engine driving the market? That's not conviction, it's obstinance. Giverny's clients should be asking harder questions.'
"Priya Sharma, Fintech Analyst at ClearWater Research: 'The decrease in hedge fund ownership from Q2 to Q3 is a red flag the market shouldn't ignore. It suggests the 'smart money' is losing patience with the story, even if a firm like Giverny sees value.'
The letter concluded by directing readers to its top 5 holdings for 2025 and other resources, maintaining a focus on fundamental analysis over market sentiment. As the AI investment cycle matures, the performance of bets like Giverny's on TWFG will test the enduring value of traditional financial metrics versus thematic momentum.
Disclosure: This analysis is based on publicly available investor letters and is for informational purposes only. It is not investment advice.