Clearbridge Small Cap Strategy Exited Its Stake in Abacus Global Management (ABL) in Q2

ClearBridge Investments, an investment management company, released its “ClearBridge Small Cap Strategy” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. The small-cap stocks experienced volatility in the second quarter. The Russell 2000 Index rebounded 10% of its November 2024 record highs just 55 days after the “Liberation Day” decline. It was driven by growth, momentum, high-beta, and low-quality stocks. Even though small-cap stocks rose, they failed to outpace the larger-cap peers due to perceived sensitivity to macroeconomic shocks. The Russell 2000 returned 8.5% for the quarter compared to the 11.1% of the Russell 1000 Index. The strategy underperformed the benchmark in this backdrop. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its second-quarter 2025 investor letter, ClearBridge Small Cap Strategy highlighted stocks such as Abacus Global Management, Inc. (NASDAQ:ABL). Abacus Global Management, Inc. (NASDAQ:ABL) is an alternative asset management company. The one-month return of Abacus Global Management, Inc. (NASDAQ:ABL) was 3.57%, and its shares lost 32.42% of their value over the last 52 weeks. On September 15, 2025, Abacus Global Management, Inc. (NASDAQ:ABL) stock closed at $6.67 per share, with a market capitalization of $639.795 million.

ClearBridge Small Cap Strategy stated the following regarding Abacus Global Management, Inc. (NASDAQ:ABL) in its second quarter 2025 investor letter:

"We also exited our position in alternative asset manager Abacus Global Management, Inc. (NASDAQ:ABL). Since initiating the position, the company has transitioned its strategy to focus on its brokerage division and has further raised concerns about performance after lowering its discount rate to improve margins in the first quarter of 2025. With declining conviction in the company, a short report alleging Abacus had inflated the value of policies purchased through a conflict of interest with its third-party valuation partner prompted us to exit the position."

Abacus Global Management, Inc. (NASDAQ:ABL) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 30 hedge fund portfolios held Abacus Global Management, Inc. (NASDAQ:ABL) at the end of the second quarter, compared to 26 in the previous quarter. While we acknowledge the potential of Abacus Global Management, Inc. (NASDAQ:ABL) 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 addition, please check out our hedge fund investor letters Q2 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.