Aristotle Capital Value Equity Strategy Chose to Exit Millrose Properties (MRP)

Soumya Eswaran

Tue, Apr 15, 2025, 4:53 AM 2 min read

Aristotle Capital Management, LLC, an investment management company, released its “Value Equity Strategy” first quarter 2025 investor letter. A copy of the letter can be downloaded here. The U.S. equity market started the year with a modest decline, with the S&P 500 Index declining 4.27% during the quarter. Conversely, the Bloomberg U.S. Aggregate Bond Index rose 2.78% during the same period. The composite returned 0.78% gross of fees (0.73% net of fees) in the first quarter underperforming the 2.14% return of the Russell 1000 Value Index and outperforming -4.27% return of the S&P 500 Index. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its first quarter 2025 investor letter, Aristotle Value Equity Strategy emphasized stocks such as Millrose Properties, Inc. (NYSE:MRP). Millrose Properties, Inc. (NYSE:MRP) is a Homesite Option Purchase Platform that offers investors with a unique residential real estate backed income-generating investment opportunity. The one-month return of Millrose Properties, Inc. (NYSE:MRP) was -2.64%. On April 14, 2025, Millrose Properties, Inc. (NYSE:MRP) stock closed at $23.60 per share with a market capitalization of $3.918 billion.

Aristotle Value Equity Strategy stated the following regarding Millrose Properties, Inc. (NYSE:MRP) in its Q1 2025 investor letter:

"We received shares of Millrose Properties, Inc. (NYSE:MRP) after it was spun off from Lennar on February 7. Millrose is a new publicly traded company focused on land banking and development. As part of the spinoff, Lennar transferred $6 billion worth of land inventory to Millrose. We believe this spinoff will allow Lennar to be a more capital efficient homebuilder, as less land inventory should lead to stronger FREE cash flow generation and better returns on invested capital. As such, we decided to sell our shares of Millrose and continue with our investment in Lennar’s core homebuilding operations, which we view as a more optimal investment."

An architect standing proud in front of a newly developed real estate asset.

Millrose Properties, Inc. (NYSE:MRP) is not on our list of 30 Most Popular Stocks Among Hedge Funds. While we acknowledge the potential of Millrose Properties, Inc. (NYSE:MRP) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.