FNF September 2011 Update

FNF September 2011 Update - FNF September 2011 Update FNF...

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FNF September 2011 Update FNF is the nation’s largest provider of title insurance. It also derives revenues from real estate transaction fees and investment income from its insurance reserves. Previous Thesis and Results: The original thesis supporting the fund’s FNF purchase was that as bad as the real estate market was/is, and even assuming further deterioration (~15% home price decline, 10% decline in already low home purchases, 50% decline in mortgage refis, 10% decline in commercial property purchases) the company was sufficiently well-run and well-reserved to represent a good value. Since the original pitch, the real estate market has done better than modeled in our pitch (largely because refis did not collapse as mortgage rates have continually hit new lows), leading to higher than expected revenues. Additionally, as promised at the beginning of the year, management was able to successfully lower costs and expand margins—we had not assumed management would be successful in the original model.
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FNF September 2011 Update - FNF September 2011 Update FNF...

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