Hotchkis & Wiley Q1 2026: A Deep-Value Bet on Workday

Hotchkis & Wiley is one of the last of the old-school deep-value shops, the kind that buys what the market has thrown away and waits. Its first-quarter 2026 filing fits that identity, and its single boldest move is a telling one: the firm raised its Workday stake by 58%, leaning into a beaten-down enterprise-software name even as it trimmed the energy, networking, and bank positions that had worked. For a $32.42 billion value manager, that is the quarter's clearest statement of where it now sees mispriced quality.

The portfolio overall barely moved in aggregate — reported value eased just 3.2% quarter over quarter, from $33.48 billion to $32.42 billion, with the position count steady at 465. But underneath that calm surface, Hotchkis rotated: adding to out-of-favor software and healthcare while taking profits in the cyclical and financial names that had run.

Leaning into beaten-down software

Workday, the human-capital and finance software platform, became the firm's largest holding at $1.38 billion (4.27%) after a 58% increase in shares — a classic deep-value move into a high-quality franchise whose stock had de-rated. GE HealthCare, the medical-imaging and diagnostics company spun out of General Electric, was also added 10% to $709.5 million (2.19%). Both are quality businesses trading at valuations a value manager finds attractive, and both run counter to the momentum crowd.

The trims tell the other half of the story. APA Corporation, the oil and gas producer, was cut 10% to $1.36 billion, and networking-software maker F5 was trimmed 16% to $1.32 billion. Ericsson, the telecom-equipment maker, was reduced 11%, and banking giant Citigroup was cut 8%. The pattern is consistent with a value discipline that sells into strength on names that have re-rated and recycles the proceeds into cheaper opportunities.

A broad, balance-sheet-driven book

Hotchkis runs a diversified value portfolio rather than a concentrated one. The top ten holdings account for under 30% of the book, with the remaining 71% spread across hundreds of names.

The composition is a value investor's hunting ground: insurer AIG and media giant Comcast were both held roughly flat, with utility Dominion Energy and Salesforce rounding out the upper tier. These are large, cash-generative businesses — many of them out of fashion, several in cyclical or value sectors — held in modest individual size across a broad book. It is the antithesis of a concentrated momentum portfolio, and the diversification is itself part of the strategy.

The AUM arc

The firm's reported value has been stable, with one quarter that demands a caveat.

Hotchkis's reported 13F value held in the $28 billion to $33 billion range across most of the past two years, with a single anomalous reading near $15.03 billion in one 2025 quarter before snapping back above $33 billion. That dip is almost certainly an incomplete or amended 13F filing rather than a real halving of assets — a data gap, not an event. Read through it, the book has been remarkably steady, consistent with a low-turnover value manager letting a diversified portfolio compound.

What it signals

For investors who track institutional positioning, Hotchkis & Wiley's first-quarter filing is a clean read on how deep value behaves at the margin: add to the cheap and out-of-favor (Workday, GE HealthCare), trim what has re-rated (Apache, F5, Citigroup), and keep the broad balance-sheet-driven core intact. The actionable signal is the Workday add — when a disciplined value shop makes a beaten-down software name its largest position, it is a vote that the market has overcorrected on quality. Whether that call is early or right is what the coming quarters will show.

FAQ

What did Hotchkis & Wiley change in Q1 2026?
It raised Workday by 58%, making it the largest holding, and added 10% to GE HealthCare, while trimming APA by 10%, F5 by 16%, Ericsson by 11%, and Citigroup by 8%. Reported 13F value eased 3.2% to $32.42 billion.

What is Hotchkis & Wiley's largest holding?
Workday, at $1.38 billion or 4.27% of the portfolio after a 58% increase in shares, followed by APA Corporation ($1.36 billion) and F5 ($1.32 billion).

Is Hotchkis & Wiley a concentrated fund?
No. It runs a diversified deep-value book of 465 positions, with the top ten accounting for under 30% of the portfolio — holding many cheap, cash-generative businesses in modest individual size.

Why did Hotchkis's reported assets dip in 2025?
A single 2025 reading near $15 billion almost certainly reflects an incomplete or amended 13F filing rather than a real decline. Adjusting for it, the book has been stable in the $28 billion to $33 billion range.