Pzena International Value ADR Strategy

Investor Summary

The Pzena International Value ADR strategy is managed by a four-person portfolio management team led by Allison Fisch, who serves as Managing Principal and President and has been with the firm since 2001. She helped launch the Emerging Markets strategies in 2008 and joined the International portfolio management team in 2016, holding a B.A. summa cum laude in Psychology from Dartmouth College. John Goetz, Managing Principal and Co-Chief Investment Officer, joined in 1996 and serves on the Executive Committee. Caroline Cai, Managing Principal and Chief Executive Officer, became CEO in 2023, joined the firm in 2004, and holds the Chartered Financial Analyst designation with a B.A. summa cum laude in Math and Economics from Bryn Mawr College. Rakesh Bordia, Principal and Portfolio Manager since January 2023, co-manages the Emerging Markets strategies, joined in 2007, and holds degrees from Indian Institute of Technology, Kanpur and Indian Institute of Management, Ahmedabad. The team applies the same philosophy, process, and systematic approach used across all of Pzena's strategies, with unanimous agreement required for investment decisions and extensive proprietary research driving security selection.

Fund Strategy

Pzena follows a classic value investment approach, constructing concentrated portfolios of securities that are undervalued relative to their long-term earnings power. The firm's investment decision-making is disciplined and systematic, based on comprehensive earnings forecasts and resulting company valuations. The investment team approaches each situation with the fundamental question: 'Would we buy the entire business at the current price?' The strategy seeks to generate significant excess return by applying a disciplined, research-based process to build concentrated portfolios of companies drawn from the most undervalued segment of the public-equity market. The philosophy centers on identifying companies that are underperforming their historically demonstrated earnings power, with intensive proprietary research and a long-term investment horizon. For stock purchases, all five criteria must be met: current valuation is low compared to normalized earnings power, current earnings are below historic norms, management has a viable plan for earnings recovery, the business is sound with sustainable advantages, and significant downside protection exists through real asset value.

ANNUALIZED SINCE INCEPTION	QUARTERLY	YTD
10.2%	11.2%	11.1%

Core Thesis

The manager applies a normalized earnings framework to avoid buying businesses at peak-cycle valuations, particularly commodity businesses whose current margins are historically unprecedented. They trim positions as they move beyond normal earnings power and redeploy capital into quality businesses trading at compelling valuations relative to sustainable earnings.

Forward Outlook

The manager expects periods of extreme concentration to historically resolve in favor of valuation discipline. While acknowledging that AI-driven demand and semiconductor strength may persist, they believe the portfolio is positioned for a reversion where value is found in businesses left behind by the narrow rally. The same normalized earnings process that led them to trim semiconductors on strength is now finding compelling opportunities in consumer businesses, health care, IT services, and other areas where concentration has created valuation dislocations. They remain focused on owning good businesses at prices that do not require historically anomalous conditions to justify valuations.

Date	Letter	Tickers	Keywords	Pitches	Quick Takes
Jul 27 2026	2026 Q2	005930 KS, ACN, C, CDW, CRBG, CTSH, DOW, EQH, EQNR, GLOB, HSBA.L, MBG.DE, POR.DE, SHEL, TSM, UBS	AI, energy, financials, IT Services, normalized earnings, semiconductors, value	-
Apr 22 2026	2026 Q1	005930 KS, 6326.T, 7733.T, ACN, BAS.DE, EQNR, MC.PA, NOK, P911.DE, PUB.PA, RKT.L, SHEL, UU.L	AI, China, energy, Europe, international, Recovery, value	MC.PA UU.L P911.DE	Pzena's international value strategy outperformed in Q1 2026, benefiting from energy sector strength amid Middle East tensions while initiating positions in discounted European recovery stories. AI disruption fears created opportunities in oversold IT services names. The portfolio remains focused on profit recovery businesses, particularly in Europe, while avoiding overvalued technology stocks despite recent selloffs.
Dec 31 2025	2025 Q4	0027.HK, 2587.T, 6301.T, 6326.T, 6367.T, 6981.T, ABEV, ACN, BABA, BAYRY, CABK.MC, ML.PA, MT, NOK, PUB.PA, VALE	AI, cyclicals, financials, international, materials, value	-	Pzena's international value strategy outperformed in Q4 2025, driven by cyclical strength in materials and financials. The team added Kubota, Publicis, Accenture, and Vale at attractive valuations while trimming winners. Despite AI disruption concerns, the manager sees opportunities in companies trading below fundamental value amid ongoing market volatility.
Jan 29 2026	2025 Q4	0027.HK, 2587.T, 6301.T, 6326.T, 6367.T, 6981.T, ABEV, ACN, BABA, BAYRY, CABK.MC, ML.PA, MT, NOK, PUB.PA, VALE	AI, cyclicals, financials, international, materials, value	6326 JP ACN VALE	Pzena's international value strategy outperformed in Q4 2025, driven by cyclical strength in materials and financials. The team added Kubota, Publicis, Accenture, and Vale at attractive valuations while trimming winners. Despite AI disruption concerns, the manager sees opportunities in companies trading below fundamental value amid ongoing market volatility.
Oct 24 2025	2025 Q3	6367.T, 6762.T, 8795.T, AKE.PA, BABA, CON.DE, DTG.DE, INGA.AS, ML.PA, NWG.L, RXL.PA, TEP.PA	AI, Asia, Europe, financials, international, Recovery, value	BABA DTG GR ARK FP BABA 6762 JP DTG GR ARK FP	Pzena International Value delivered strong Q3 performance driven by value outperformance and AI-related gains in Alibaba and TDK. The manager continues finding opportunities in undervalued companies with strong fundamentals, particularly those in profit recovery mode, while managing around tariff concerns and sector-specific headwinds in chemicals and trucking.
Jul 31 2025	2025 Q2	6367.T, 6479.T, 6981.T, 7733.T, BABA, CON.DE, DTG.DE, EVK.DE, RXL.PA, SBRY.L, SHEL, SNY	Currency, Europe, international, Japan, Restructuring, tariffs, value, volatility	6981.T 6367.T	Pzena's international value strategy posted solid Q2 returns despite underperforming as growth outpaced value. The team capitalized on volatility to establish new positions in Japanese leaders Murata and Daikin at attractive entry points. Financials drove performance while energy detracted. Ongoing tariff and macro uncertainty creates market volatility that generates opportunities for patient value investors.
Mar 31 2025	2025 Q1	6479.T, 6762.T, AKE.PA, BABA, CABK.MC, GSK, ING, MG, OTP.BD, SBRY.L, STAN.L	Europe, financials, healthcare, international, Outperformance, value	GSK	Strong quarter driven by European bank earnings resilience and Chinese tech recovery, particularly Alibaba's accelerating e-commerce growth. Portfolio maintains cyclical overweights in financials while adding defensive healthcare and staples exposure. Recent activity focused on capturing value in pharmaceutical pipelines and specialty industrials while harvesting gains from outperforming positions.

Date

Letter

Tickers

Keywords

Pitches

Quick Takes

Jul 27 2026

2026 Q2

005930 KS, ACN, C, CDW, CRBG, CTSH, DOW, EQH, EQNR, GLOB, HSBA.L, MBG.DE, POR.DE, SHEL, TSM, UBS

AI, energy, financials, IT Services, normalized earnings, semiconductors, value

Apr 22 2026

2026 Q1

005930 KS, 6326.T, 7733.T, ACN, BAS.DE, EQNR, MC.PA, NOK, P911.DE, PUB.PA, RKT.L, SHEL, UU.L

AI, China, energy, Europe, international, Recovery, value

MC.PA
UU.L
P911.DE

Pzena's international value strategy outperformed in Q1 2026, benefiting from energy sector strength amid Middle East tensions while initiating positions in discounted European recovery stories. AI disruption fears created opportunities in oversold IT services names. The portfolio remains focused on profit recovery businesses, particularly in Europe, while avoiding overvalued technology stocks despite recent selloffs.

Dec 31 2025

2025 Q4

0027.HK, 2587.T, 6301.T, 6326.T, 6367.T, 6981.T, ABEV, ACN, BABA, BAYRY, CABK.MC, ML.PA, MT, NOK, PUB.PA, VALE

AI, cyclicals, financials, international, materials, value

Pzena's international value strategy outperformed in Q4 2025, driven by cyclical strength in materials and financials. The team added Kubota, Publicis, Accenture, and Vale at attractive valuations while trimming winners. Despite AI disruption concerns, the manager sees opportunities in companies trading below fundamental value amid ongoing market volatility.

Jan 29 2026

2025 Q4

0027.HK, 2587.T, 6301.T, 6326.T, 6367.T, 6981.T, ABEV, ACN, BABA, BAYRY, CABK.MC, ML.PA, MT, NOK, PUB.PA, VALE

AI, cyclicals, financials, international, materials, value

6326 JP
ACN
VALE

Oct 24 2025

2025 Q3

6367.T, 6762.T, 8795.T, AKE.PA, BABA, CON.DE, DTG.DE, INGA.AS, ML.PA, NWG.L, RXL.PA, TEP.PA

AI, Asia, Europe, financials, international, Recovery, value

BABA
DTG GR
ARK FP
BABA
6762 JP
DTG GR
ARK FP

Pzena International Value delivered strong Q3 performance driven by value outperformance and AI-related gains in Alibaba and TDK. The manager continues finding opportunities in undervalued companies with strong fundamentals, particularly those in profit recovery mode, while managing around tariff concerns and sector-specific headwinds in chemicals and trucking.

Jul 31 2025

2025 Q2

6367.T, 6479.T, 6981.T, 7733.T, BABA, CON.DE, DTG.DE, EVK.DE, RXL.PA, SBRY.L, SHEL, SNY

Currency, Europe, international, Japan, Restructuring, tariffs, value, volatility

6981.T
6367.T

Pzena's international value strategy posted solid Q2 returns despite underperforming as growth outpaced value. The team capitalized on volatility to establish new positions in Japanese leaders Murata and Daikin at attractive entry points. Financials drove performance while energy detracted. Ongoing tariff and macro uncertainty creates market volatility that generates opportunities for patient value investors.

Mar 31 2025

2025 Q1

6479.T, 6762.T, AKE.PA, BABA, CABK.MC, GSK, ING, MG, OTP.BD, SBRY.L, STAN.L

Europe, financials, healthcare, international, Outperformance, value

GSK

Strong quarter driven by European bank earnings resilience and Chinese tech recovery, particularly Alibaba's accelerating e-commerce growth. Portfolio maintains cyclical overweights in financials while adding defensive healthcare and staples exposure. Recent activity focused on capturing value in pharmaceutical pipelines and specialty industrials while harvesting gains from outperforming positions.

QUARTER	THEMES	TAGS
2026 Q2	Semiconductor Cycle The manager discusses the historic semiconductor rally driven by AI-related capital spending, particularly in memory and logic chips concentrated in Korea and Taiwan. They explain why current memory margins north of 80% for major producers are unsustainable, representing a pricing environment with no precedent in the industry's history. The manager trimmed semiconductor positions as they moved beyond normal earnings power, applying normalized earnings discipline to avoid buying at peak cycle valuations.	Memory DRAM HBM Foundries Semi Equipment
	AI AI-driven demand for memory and logic chips dominated global equity returns, accounting for 103% of emerging markets gains. The manager views the current AI earnings boom as a commodity pricing spike rather than a structural shift, with gross margins at unprecedented levels. They are finding value in IT services firms like Accenture, Cognizant, and Globant, which the market fears will be disrupted by AI, but which the manager believes are positioned to adapt and enable AI adoption.	Data Centers IT Services Cloud Enterprise Software
	Oil Crude oil approached $120 per barrel after the Iran War closed the Strait of Hormuz, creating an energy shock that the market largely shrugged off. The manager trimmed energy-exposed holdings including Equinor, Shell, and Petrobras as oil prices surged, harvesting gains from positions that benefited from the spike. Energy was the only sector to detract from absolute performance as easing Middle East tensions caused oil prices to reverse.	Exploration & Production Integrated Oil & Gas Refiners
	Money Center Banks Global money center banks delivered exceptional performance with triple-digit cumulative returns over three years, surpassed only by AI-related industries. The manager trimmed positions in Citigroup, UBS, OTP Bank, and exited HSBC on strength, as these banks benefited from improving returns on tangible common equity, expense control, strong capital markets activity, and robust loan growth. Shares reached post-GFC highs with valuations expanding to levels not seen since 2008.	Investment Banks Regional Banks Capital Markets
	Life Insurance U.S. life insurance stocks sold off in early 2026 due to private credit exposure concerns, despite having very limited direct middle market lending exposure (approximately 1% or less of total investment portfolios for Corebridge and Equitable). The manager added to positions in both companies as they traded at mid-single-digit forward earnings multiples, viewing the private credit fears as similarly misunderstood to prior commercial real estate concerns. The proposed Corebridge-Equitable merger makes strategic sense given complementary business models and the increasing importance of scaled distribution.	Annuities Private Credit Asset Managers
	Autos The manager initiated a position in Porsche AG after its margins collapsed from an enviable 17% average to effectively zero, driven by a China downturn and product cycle gap. The stock fell nearly 70% from its May 2023 peak, creating an attractive entry at around 9x normal earnings. The manager funded this by exiting Mercedes-Benz, viewing Porsche's brand value as unimpaired with a clearer earnings recovery path through ICE model refreshes and cost rationalization, while China exposure has been substantially de-risked from 33% to 15% of deliveries.	Luxury Electric Vehicles Auto Parts
	IT Services IT services companies have been treated as structural losers, with Accenture, Cognizant, and Globant trading at 4.5x or less of normal earnings on fears that AI will erode demand through price deflation and disintermediation. The manager believes these firms can adapt and become enablers of AI adoption, not victims, with deep client relationships, domain expertise, and evolving delivery models providing competitive advantages. While acknowledging a difficult transition period, the manager views current valuations as paying investors to wait, with double-digit free cash flow yields and conservative balance sheets buying time to navigate the shift.	Cloud Enterprise Software Outsourcing
	Sustainability The CSO function is undergoing a strategic reset, pivoting from stakeholder values to direct business value creation. The manager is encouraged by CSOs being specific about challenges like the 'green premium' where sustainable products cost more but customers won't pay higher prices. The focus is shifting to data-driven approaches targeting value-chain hotspots, with sustainability grounded in underlying economics rather than external stakeholder pressure. The manager advocates for pragmatism over ideology, keeping sustainability tethered to real returns and treating the CSO as a source of innovation rather than compliance.	Energy Transition Carbon Capture Renewable Developers
2026 Q1	AI AI disruption fears led to heightened uncertainty and selloffs across multiple sectors. Investors' fears are spreading across sectors, creating opportunities where concerns are potentially overstated. IT services companies like Accenture face cyclical headwinds amid deflationary pressure concerns from AI.	AI Disruption Technology Automation Enterprise
	Oil Oil price spike combined with Middle East tensions drove strong performance in energy holdings. Equinor and Shell benefited from stronger oil and gas prices amid escalating geopolitical tensions. Energy was a top-performing sector in the portfolio.	Oil Energy Geopolitical Natural Gas LNG
	Value Value stocks continued to outpace growth stocks during the quarter, partly due to higher energy prices. The portfolio focuses on businesses in profit recovery mode with attractive valuations, especially in Europe.	Value Recovery Undervalued Contrarian Europe
	China Chinese demand weakness impacted luxury brands like LVMH and automakers like Porsche. However, the manager believes Chinese demand will stabilize as real estate prices trough, leading to improving consumer sentiment.	China Consumer Luxury Real Estate Recovery
2025 Q4	AI AI has been the defining theme of market leadership in 2025, driving data center capex and benefiting semis, electrical equipment, and tech hardware. The theme experienced volatility in Q4 with concerns over durability, but re-asserted dominance after NVIDIA's strong earnings. AI data centers require enormous power, creating opportunities for companies like Bloom Energy.	Data Centers Semiconductors Power Infrastructure
	Electrification The portfolio maintains its largest absolute and relative exposure to the Industrials sector, representative of conviction in the Electrification theme. However, exposure to some larger holdings in the Electrification theme was modestly reduced during the quarter.	Industrial Power Infrastructure
	Biotech Biotech was a standout performer during the quarter, delivering its best quarter in five years. Performance was driven by an improving rate environment, easing regulation with more M&A activity, and excitement around AI's promise in driving efficiencies in the drug discovery process.	Pharmaceuticals M&A Drug Discovery
	Solar First Solar benefited from Trump Administration's One Big Beautiful Bill which drove US demand for non-China solar products. The company differentiates itself with thin-film CdTe technology offering better performance in hot/humid/low light conditions and is more efficient for large scale deployment.	Renewable Energy Manufacturing
	Space Rocket Lab operates as an end-to-end space company in Launch Services and Space Systems segments. The stock was up nearly 50% in the quarter on strong earnings results and growing backlog, though the portfolio's late initiation meant it was a detractor to relative performance.	Aerospace Defense Satellites
2025 Q3	Value The manager emphasizes investing in cheap company valuations when assessed against fundamentals, with portfolios weighted toward businesses in profit recovery mode. Recent uncertainty has created opportunities for long-term value investors.	Fundamentals Recovery Undervalued Cheap Opportunity
	AI Multiple portfolio companies are benefiting from AI adoption including Alibaba's strong growth in cloud and AI businesses, TDK's increased adoption of silicon anode batteries tied to AI-related storage needs, and Teleperformance's increased adoption of AI tools.	Cloud Storage Adoption Growth Tools
2025 Q2	Value The portfolio focuses on undervalued companies with characteristics for improved valuations, establishing new positions in Japanese companies at attractive entry points and adding to positions on relative weakness.	Undervalued Entry Points Attractive Weakness Opportunities
	Japan Established new positions in two leading Japanese companies - Murata and Daikin - capitalizing on attractive entry points, and added to Japanese medical equipment supplier Olympus on relative weakness.	Japanese Murata Daikin Olympus Entry Points
2025 Q1	Financials European banks CaixaBank and ING Groep provided strong outlooks affirming earnings sustainability and capital robustness even in declining interest rate environments, with plans to continue significant capital returns to shareholders. The portfolio maintains overweight positioning in cyclical financials.	Banks Capital Returns Interest Rates Europe Earnings
	E-commerce Alibaba recovered from depressed Chinese market sentiment and market share issues, reporting accelerating revenue growth in e-commerce and cloud businesses while the market became more optimistic about its AI capabilities.	China Revenue Growth Cloud AI Market Share
	Pharmaceuticals GSK shares have been weak due to disappointing RSV and shingles vaccine sales, but the market is discounting the durability of GSK's vaccine and HIV treatment businesses while the specialty medicine pipeline has promising treatments nearing commercialization.	Vaccines Pipeline HIV Specialty Medicine UK

QUARTER

THEMES

Semiconductor Cycle

The manager discusses the historic semiconductor rally driven by AI-related capital spending, particularly in memory and logic chips concentrated in Korea and Taiwan. They explain why current memory margins north of 80% for major producers are unsustainable, representing a pricing environment with no precedent in the industry's history. The manager trimmed semiconductor positions as they moved beyond normal earnings power, applying normalized earnings discipline to avoid buying at peak cycle valuations.

Memory DRAM HBM Foundries Semi Equipment

AI

AI-driven demand for memory and logic chips dominated global equity returns, accounting for 103% of emerging markets gains. The manager views the current AI earnings boom as a commodity pricing spike rather than a structural shift, with gross margins at unprecedented levels. They are finding value in IT services firms like Accenture, Cognizant, and Globant, which the market fears will be disrupted by AI, but which the manager believes are positioned to adapt and enable AI adoption.

Data Centers IT Services Cloud Enterprise Software

Oil

Crude oil approached $120 per barrel after the Iran War closed the Strait of Hormuz, creating an energy shock that the market largely shrugged off. The manager trimmed energy-exposed holdings including Equinor, Shell, and Petrobras as oil prices surged, harvesting gains from positions that benefited from the spike. Energy was the only sector to detract from absolute performance as easing Middle East tensions caused oil prices to reverse.

Exploration & Production Integrated Oil & Gas Refiners

Money Center Banks

Global money center banks delivered exceptional performance with triple-digit cumulative returns over three years, surpassed only by AI-related industries. The manager trimmed positions in Citigroup, UBS, OTP Bank, and exited HSBC on strength, as these banks benefited from improving returns on tangible common equity, expense control, strong capital markets activity, and robust loan growth. Shares reached post-GFC highs with valuations expanding to levels not seen since 2008.

Investment Banks Regional Banks Capital Markets

Life Insurance

U.S. life insurance stocks sold off in early 2026 due to private credit exposure concerns, despite having very limited direct middle market lending exposure (approximately 1% or less of total investment portfolios for Corebridge and Equitable). The manager added to positions in both companies as they traded at mid-single-digit forward earnings multiples, viewing the private credit fears as similarly misunderstood to prior commercial real estate concerns. The proposed Corebridge-Equitable merger makes strategic sense given complementary business models and the increasing importance of scaled distribution.

Annuities Private Credit Asset Managers

Autos

The manager initiated a position in Porsche AG after its margins collapsed from an enviable 17% average to effectively zero, driven by a China downturn and product cycle gap. The stock fell nearly 70% from its May 2023 peak, creating an attractive entry at around 9x normal earnings. The manager funded this by exiting Mercedes-Benz, viewing Porsche's brand value as unimpaired with a clearer earnings recovery path through ICE model refreshes and cost rationalization, while China exposure has been substantially de-risked from 33% to 15% of deliveries.

Luxury Electric Vehicles Auto Parts

IT Services

IT services companies have been treated as structural losers, with Accenture, Cognizant, and Globant trading at 4.5x or less of normal earnings on fears that AI will erode demand through price deflation and disintermediation. The manager believes these firms can adapt and become enablers of AI adoption, not victims, with deep client relationships, domain expertise, and evolving delivery models providing competitive advantages. While acknowledging a difficult transition period, the manager views current valuations as paying investors to wait, with double-digit free cash flow yields and conservative balance sheets buying time to navigate the shift.

Cloud Enterprise Software Outsourcing

Sustainability

The CSO function is undergoing a strategic reset, pivoting from stakeholder values to direct business value creation. The manager is encouraged by CSOs being specific about challenges like the 'green premium' where sustainable products cost more but customers won't pay higher prices. The focus is shifting to data-driven approaches targeting value-chain hotspots, with sustainability grounded in underlying economics rather than external stakeholder pressure. The manager advocates for pragmatism over ideology, keeping sustainability tethered to real returns and treating the CSO as a source of innovation rather than compliance.

Energy Transition Carbon Capture Renewable Developers

2026 Q1

AI

AI disruption fears led to heightened uncertainty and selloffs across multiple sectors. Investors' fears are spreading across sectors, creating opportunities where concerns are potentially overstated. IT services companies like Accenture face cyclical headwinds amid deflationary pressure concerns from AI.

AI Disruption Technology Automation Enterprise

Oil

Oil price spike combined with Middle East tensions drove strong performance in energy holdings. Equinor and Shell benefited from stronger oil and gas prices amid escalating geopolitical tensions. Energy was a top-performing sector in the portfolio.

Oil Energy Geopolitical Natural Gas LNG

Value

Value stocks continued to outpace growth stocks during the quarter, partly due to higher energy prices. The portfolio focuses on businesses in profit recovery mode with attractive valuations, especially in Europe.

Value Recovery Undervalued Contrarian Europe

China

Chinese demand weakness impacted luxury brands like LVMH and automakers like Porsche. However, the manager believes Chinese demand will stabilize as real estate prices trough, leading to improving consumer sentiment.

China Consumer Luxury Real Estate Recovery

2025 Q4

AI

AI has been the defining theme of market leadership in 2025, driving data center capex and benefiting semis, electrical equipment, and tech hardware. The theme experienced volatility in Q4 with concerns over durability, but re-asserted dominance after NVIDIA's strong earnings. AI data centers require enormous power, creating opportunities for companies like Bloom Energy.

Data Centers Semiconductors Power Infrastructure

Electrification

The portfolio maintains its largest absolute and relative exposure to the Industrials sector, representative of conviction in the Electrification theme. However, exposure to some larger holdings in the Electrification theme was modestly reduced during the quarter.

Industrial Power Infrastructure

Biotech

Biotech was a standout performer during the quarter, delivering its best quarter in five years. Performance was driven by an improving rate environment, easing regulation with more M&A activity, and excitement around AI's promise in driving efficiencies in the drug discovery process.

Pharmaceuticals M&A Drug Discovery

Solar

First Solar benefited from Trump Administration's One Big Beautiful Bill which drove US demand for non-China solar products. The company differentiates itself with thin-film CdTe technology offering better performance in hot/humid/low light conditions and is more efficient for large scale deployment.

Renewable Energy Manufacturing

Space

Rocket Lab operates as an end-to-end space company in Launch Services and Space Systems segments. The stock was up nearly 50% in the quarter on strong earnings results and growing backlog, though the portfolio's late initiation meant it was a detractor to relative performance.

Aerospace Defense Satellites

2025 Q3

Value

The manager emphasizes investing in cheap company valuations when assessed against fundamentals, with portfolios weighted toward businesses in profit recovery mode. Recent uncertainty has created opportunities for long-term value investors.

Fundamentals Recovery Undervalued Cheap Opportunity

AI

Multiple portfolio companies are benefiting from AI adoption including Alibaba's strong growth in cloud and AI businesses, TDK's increased adoption of silicon anode batteries tied to AI-related storage needs, and Teleperformance's increased adoption of AI tools.

Cloud Storage Adoption Growth Tools

2025 Q2

Value

The portfolio focuses on undervalued companies with characteristics for improved valuations, establishing new positions in Japanese companies at attractive entry points and adding to positions on relative weakness.

Undervalued Entry Points Attractive Weakness Opportunities

Japan

Established new positions in two leading Japanese companies - Murata and Daikin - capitalizing on attractive entry points, and added to Japanese medical equipment supplier Olympus on relative weakness.

Japanese Murata Daikin Olympus Entry Points

2025 Q1

Financials

European banks CaixaBank and ING Groep provided strong outlooks affirming earnings sustainability and capital robustness even in declining interest rate environments, with plans to continue significant capital returns to shareholders. The portfolio maintains overweight positioning in cyclical financials.

Banks Capital Returns Interest Rates Europe Earnings

E-commerce

Alibaba recovered from depressed Chinese market sentiment and market share issues, reporting accelerating revenue growth in e-commerce and cloud businesses while the market became more optimistic about its AI capabilities.

China Revenue Growth Cloud AI Market Share

Pharmaceuticals

GSK shares have been weak due to disappointing RSV and shingles vaccine sales, but the market is discounting the durability of GSK's vaccine and HIV treatment businesses while the specialty medicine pipeline has promising treatments nearing commercialization.

Vaccines Pipeline HIV Specialty Medicine UK

Date	Pitch Type	Author	Ticker	Company	Industry	Sub Industry	Bull / Bear	Exchange	Keywords	Action
Apr 22, 2026	Fund Letters	Pzena International Value ADR Strategy	-	Bangkok Bank	Banks - Regional	Banks	Bull	New York Stock Exchange	conservative lending, contrarian, Earnings Power, Emerging markets, financials, Overcapitalized, Thai Bank, Value	Login
Apr 22, 2026	Fund Letters	Pzena International Value ADR Strategy	MC.PA	LVMH	Luxury Goods	Textiles, Apparel & Luxury Goods	Bull	Euronext Stock Exchange	brand portfolio, China exposure, Consumer Discretionary, Cosmetics, Cyclical Recovery, fashion, Jewelry, Luxury goods, Spirits, Value	Login
Apr 22, 2026	Fund Letters	Pzena International Value ADR Strategy	UU.L	United Utilities	Utilities - Regulated Water	Water Utilities	Bull	New York Stock Exchange	contrarian, defensive, infrastructure investment, rate base growth, regulated utility, UK, Value, Water Utilities	Login
Apr 22, 2026	Fund Letters	Pzena International Value ADR Strategy	-	Magnum Ice Cream	Other	Packaged Foods & Meats	Bull	-	brand portfolio, Channel Expansion, consumer staples, Developing Markets, ice cream, market leader, spinoff, Travel Recovery, Value	Login
Apr 22, 2026	Fund Letters	Pzena International Value ADR Strategy	P911.DE	Porsche	Auto Manufacturers	Automobile Manufacturers	Bull	New York Stock Exchange	brand strength, China exposure, Consumer Discretionary, Cyclical Recovery, Electric Vehicles, Luxury Automotive, premium pricing, Product cycle	Login
Jan 29, 2026	Fund Letters	Rakesh Bordia	6326 JP	Kubota Corporation	Industrials	Construction Machinery & Heavy Trucks	Bull	New York Stock Exchange	agriculture, Cyclicality, machinery, Margins, valuation	Login
Jan 29, 2026	Fund Letters	Rakesh Bordia	ACN	Accenture plc	Information Technology	IT Consulting & Other Services	Bull	New York Stock Exchange	AI, Consulting, Digital, growth, Margins	Login
Jan 29, 2026	Fund Letters	Rakesh Bordia	VALE	VALE S.A.	Materials	Metals & Mining	Bull	Brasil Bolsa Balcão	Commodities, ESG, Ironore, Mining, valuation	Login
Oct 24, 2025	Fund Letters	Rakesh Bordia	ARK FP	Arkema S.A.	Materials	Chemicals	Bear	Euronext Stock Exchange	Acquisitions, Chemicals, Demand, inflation, leadership, Margins, specialty materials	Login
Oct 24, 2025	Fund Letters	Rakesh Bordia	ARK FP	Arkema S.A.	Materials	Chemicals	Bear	Euronext Stock Exchange	Acquisitions, Chemicals, Demand, inflation, leadership, Margins, specialty materials	Login
Oct 24, 2025	Fund Letters	Rakesh Bordia	BABA	Alibaba Group Holding Ltd.	Consumer Discretionary	E-Commerce	Bull	NYSE	AI, China, cloud, Consumption, e-commerce, growth, restructuring, valuation	Login
Oct 24, 2025	Fund Letters	Rakesh Bordia	DTG GR	Daimler Truck Holding AG	Other	Automobiles	Bear	-	automotive, dividends, Electrification, Europe, Hydrogen, tariffs, trucks	Login
Oct 24, 2025	Fund Letters	Rakesh Bordia	BABA	Alibaba Group Holding Ltd.	Consumer Discretionary	E-Commerce	Bull	NYSE	AI, China, cloud, Consumption, e-commerce, growth, restructuring, valuation	Login
Oct 24, 2025	Fund Letters	Rakesh Bordia	6762 JP	TDK Corp.	Information Technology	Electronic Components	Bull	NYSE	AI, Batteries, electronics, EV, innovation, semiconductors, Sensors, Storage	Login
Oct 24, 2025	Fund Letters	Rakesh Bordia	DTG GR	Daimler Truck Holding AG	Other	Automobiles	Bear	-	automotive, dividends, Electrification, Europe, Hydrogen, tariffs, trucks	Login
Jun 30, 2025	Fund Letters	Pzena International Value ADR strategy	6367.T	Daikin Industries, Ltd.	Industrials	Building Products	Bull	Tokyo Stock Exchange	Air Conditioning, capital efficiency, global leader, HVAC, Japan, Margin Improvement, tariffs	Login
Jun 30, 2025	Fund Letters	Pzena International Value ADR strategy	6981.T	Murata Manufacturing Co., Ltd.	Information Technology	Electronic Components	Bull	Tokyo Stock Exchange	AI, Capacitors, data centers, Electronic Components, EVs, Inductors, Japan, technology leadership	Login
Mar 31, 2025	Fund Letters	Pzena International Value ADR strategy	GSK	GSK plc	Health Care	Pharmaceuticals	Bull	London Stock Exchange	healthcare, HIV treatment, pharmaceuticals, pipeline, Specialty Medicine, UK, undervalued, vaccines, Value	Login

Date

Pitch Type

Author

Ticker

Company

Industry

Sub Industry

Bull / Bear

Exchange

Keywords

Action

Apr 22, 2026

Fund Letters

Pzena International Value ADR Strategy

Bangkok Bank

Banks - Regional

Banks

Bull

New York Stock Exchange

conservative lending, contrarian, Earnings Power, Emerging markets, financials, Overcapitalized, Thai Bank, Value

Apr 22, 2026

Fund Letters

Pzena International Value ADR Strategy

MC.PA

LVMH

Luxury Goods

Textiles, Apparel & Luxury Goods

Bull

Euronext Stock Exchange

brand portfolio, China exposure, Consumer Discretionary, Cosmetics, Cyclical Recovery, fashion, Jewelry, Luxury goods, Spirits, Value

Apr 22, 2026

Fund Letters

Pzena International Value ADR Strategy

UU.L

United Utilities

Utilities - Regulated Water

Water Utilities

Bull

New York Stock Exchange

contrarian, defensive, infrastructure investment, rate base growth, regulated utility, UK, Value, Water Utilities

Apr 22, 2026

Fund Letters

Pzena International Value ADR Strategy

Magnum Ice Cream

Other

Packaged Foods & Meats

Bull

brand portfolio, Channel Expansion, consumer staples, Developing Markets, ice cream, market leader, spinoff, Travel Recovery, Value

Apr 22, 2026

Fund Letters

Pzena International Value ADR Strategy

P911.DE

Porsche

Auto Manufacturers

Automobile Manufacturers

Bull

New York Stock Exchange

brand strength, China exposure, Consumer Discretionary, Cyclical Recovery, Electric Vehicles, Luxury Automotive, premium pricing, Product cycle

Jan 29, 2026

Fund Letters

Rakesh Bordia

6326 JP

Kubota Corporation

Industrials

Construction Machinery & Heavy Trucks

Bull

New York Stock Exchange

agriculture, Cyclicality, machinery, Margins, valuation

Jan 29, 2026

Fund Letters

Rakesh Bordia

ACN

Accenture plc

Information Technology

IT Consulting & Other Services

Bull

New York Stock Exchange

AI, Consulting, Digital, growth, Margins

Jan 29, 2026

Fund Letters

Rakesh Bordia

VALE

VALE S.A.

Materials

Metals & Mining

Bull

Brasil Bolsa Balcão

Commodities, ESG, Ironore, Mining, valuation

Oct 24, 2025

Fund Letters

Rakesh Bordia

ARK FP

Arkema S.A.

Materials

Chemicals

Bear

Euronext Stock Exchange

Acquisitions, Chemicals, Demand, inflation, leadership, Margins, specialty materials

Oct 24, 2025

Fund Letters

Rakesh Bordia

ARK FP

Arkema S.A.

Materials

Chemicals

Bear

Euronext Stock Exchange

Acquisitions, Chemicals, Demand, inflation, leadership, Margins, specialty materials

Oct 24, 2025

Fund Letters

Rakesh Bordia

BABA

Alibaba Group Holding Ltd.

Consumer Discretionary

E-Commerce

Bull

NYSE

AI, China, cloud, Consumption, e-commerce, growth, restructuring, valuation

Oct 24, 2025

Fund Letters

Rakesh Bordia

DTG GR

Daimler Truck Holding AG

Other

Automobiles

Bear

automotive, dividends, Electrification, Europe, Hydrogen, tariffs, trucks

Oct 24, 2025

Fund Letters

Rakesh Bordia

BABA

Alibaba Group Holding Ltd.

Consumer Discretionary

E-Commerce

Bull

NYSE

AI, China, cloud, Consumption, e-commerce, growth, restructuring, valuation

Oct 24, 2025

Fund Letters

Rakesh Bordia

6762 JP

TDK Corp.

Information Technology

Electronic Components

Bull

NYSE

AI, Batteries, electronics, EV, innovation, semiconductors, Sensors, Storage

Oct 24, 2025

Fund Letters

Rakesh Bordia

DTG GR

Daimler Truck Holding AG

Other

Automobiles

Bear

automotive, dividends, Electrification, Europe, Hydrogen, tariffs, trucks

Jun 30, 2025

Fund Letters

Pzena International Value ADR strategy

6367.T

Daikin Industries, Ltd.

Industrials

Building Products

Bull

Tokyo Stock Exchange

Air Conditioning, capital efficiency, global leader, HVAC, Japan, Margin Improvement, tariffs

Jun 30, 2025

Fund Letters

Pzena International Value ADR strategy

6981.T

Murata Manufacturing Co., Ltd.

Information Technology

Electronic Components

Bull

Tokyo Stock Exchange

AI, Capacitors, data centers, Electronic Components, EVs, Inductors, Japan, technology leadership

Mar 31, 2025

Fund Letters

Pzena International Value ADR strategy

GSK

GSK plc

Health Care

Pharmaceuticals

Bull

London Stock Exchange

healthcare, HIV treatment, pharmaceuticals, pipeline, Specialty Medicine, UK, undervalued, vaccines, Value

TICKER	COMMENTARY
ACN	Global IT services provider Accenture also detracted after management reduced its full-year revenue guidance and raised its acquisition spend. IT services companies Cognizant and Accenture declined materially following weaker organic growth guidance and, in Accenture's case, the announcement of increased future acquisitions. The market continues to assess the long-term implications of AI-driven disruption on IT services business models and the near-term shift in client spending toward AI-related token consumption at the expense of services spending. We initiated a position in Accenture, where the weakness that pressured the shares created the opportunity. It now trades near its lowest valuation in a decade and we believe that it stands to benefit from rising AI-enabled automation demand. Accenture is the world's largest IT services firm. Because it over-indexes to consulting-led transformation work, which pairs business expertise with engineering, Accenture is in the room when clients set direction. That position earns a premium, visible in revenue per employee of roughly $90,000, nearly twice the level of India's largest outsourcing firms. The mix also carries little of the commoditized application development that AI automates first. The stock has been cut in half over the past year on fears that organic growth is impaired—fears that were deepened by a June guidance cut and stepped-up acquisition spending. But many companies are still in the early stages of adopting AI across the enterprise. Clients are asking Accenture what to do about AI but deferring the large programs that follow, because spending on AI itself is crowding out the rest of the technology budget. That work is deferred, not gone, and we believe that Accenture is well positioned to capture it when those programs begin. Meanwhile, investors collect roughly 12% of the market capitalization annually in dividends and buybacks.
CTSH	IT services company Cognizant Technology Solutions was the largest individual detractor, declining despite beating on earnings and bookings, as persistent concerns about AI disruption to the IT services business model weighed on the stock. IT services companies Cognizant and Accenture declined materially following weaker organic growth guidance. The market continues to assess the long-term implications of AI-driven disruption on IT services business models and the near-term shift in client spending toward AI-related token consumption at the expense of services spending. Cognizant is more exposed to the bear case than Accenture, with more of its revenue tied to delivery and operations work where AI can reduce human effort. However, roughly 60% of its revenue comes from healthcare and financial services, where claims, payments, and risk systems cannot fail. These are not industries where clients can simply hand a workflow to an AI tool and hope it works. Cognizant is embedded in them, with its proprietary TriZetto platform processing roughly two-thirds of U.S. healthcare claims. Cognizant has also been aggressive in evolving its pricing model, with fixed-price and outcome-based contracts crossing 50% of revenue for the first time this year, accepting the risk of cost overruns in exchange for keeping a share of the productivity AI creates. Demand is holding up, with trailing-12-month bookings up 11% from a year ago, as new work outpaces the price deflation on each contract.
GLOB	Globant is the smallest of the three companies and the most digital-native. Founded in Argentina and staffed largely across Latin America, it builds the consumer-facing side of technology—the streaming apps, games, and fintech experiences of clients like Disney and Google—not legacy systems or back-office operations. Its expertise is pairing design talent with engineering, and design currently remains a challenge for AI. Deciding what a product should be and how people will interact with it, refined through iteration with the client, is valuable; consumers pay for novelty while AI models converge on the familiar. Engineering will become more AI-assisted, and Globant is adapting how it sells that work. Subscription teams called AI Pods combine its engineers with AI agents in an early attempt to decouple revenue from billable hours. Revenue per employee, roughly $85,000, rivals that of Accenture and has risen every year since 2022.
TSM	Taiwanese foundry leader Taiwan Semiconductor Manufacturing contributed, benefiting from supply tightness, as demand for advanced capacity outpaced its conservative expansion. Following relative strength, we trimmed Taiwan Semiconductor Manufacturing. We continue to own select businesses where the earnings uplift has been driven more by unit growth and a higher-quality, less commodity-dependent product mix than by the pricing spike itself.
005930.KS	Korean memory manufacturer Samsung Electronics rose sharply, as unabated memory demand fueled expectations of DRAM shortages through 2027. We concluded our exit from Samsung Electronics in the quarter amid the stock's meteoric rise; we believe it is trading at levels unsupported by its long-term earnings power. During the downturn of 2022 and 2023, memory and semiconductor stocks fell into the cheapest quintile of our investable universe. We bought Samsung, TSMC, and several other semiconductor-related businesses when they were genuinely cheap on their mid-cycle earnings potential, and we benefited as they recovered.
EQNR	Norwegian energy company Equinor and British oil major Shell both experienced share price declines as a result of easing Middle East tensions causing oil prices to reverse. Norwegian oil and gas producer Equinor was the largest laggard, as oil prices fell on hopes of an end to the Middle East conflict. We trimmed several of our positions on strength, including Norway's Equinor.
SHEL	Norwegian energy company Equinor and British oil major Shell both experienced share price declines as a result of easing Middle East tensions causing oil prices to reverse. We trimmed several of our positions on strength, including the UK's Shell.
DOW	Chemical producer Dow fell in concert with oil prices. U.S.-based chemicals giant Dow, Inc., was similarly strong, as the company's advantaged feedstock cost position resulted in a material profit uplift as oil-to-gas spreads blew out, and we sold the stock into strength. Commodity chemicals producer Dow also detracted, as the stock gave back gains from earlier in the year when Middle East supply disruptions had tightened petrochemical markets.
C	Shares of U.S. megabank Citigroup reached post-GFC highs on the back of steadily improving returns on tangible common equity, underpinned by notable expense control – a historical overhang on the stock – and impressive top-line growth. Management has been reducing the bank's excess capital position while increasing shareholder returns, and we trimmed our position on strength with the stock trading north of 1.4x tangible book value, its highest level since 2008.
UBS	We also took some money off the table in diversified Swiss giant UBS, whose shares benefited from strong capital markets activity and encouraging news flow on potentially less onerous Swiss capital regulations. Swiss lender UBS Group rose on growing confidence that Switzerland's proposed bank-capital increase would be softened materially.
HSBA.L	Lastly, we sold shares of HSBC, which have doubled since Liberation Day, driven by a recovery in loan growth, strong momentum in the company's sprawling wealth management business, and solid execution on its cost savings program.
CRBG	After underperforming in 2023, U.S. life insurance stocks staged a powerful rebound in 2024. In early 2026, investors' anxieties resurfaced, this time due to private credit exposure. As private credit concerns proliferated, two of our holdings, Corebridge Financial and Equitable Holdings, sold off in concert with alternative asset managers despite having very different business models. Shortly thereafter in late March, the two companies announced a surprise merger agreement; the deal was initially well received by the market but quickly took a back seat to persistent private credit fears. With both stocks trading at mid-single-digit forward earnings multiples, we began adding to our positions. We believe the proposed merger makes strategic sense given the two companies' complementary business models and the increasing importance of scaled distribution in the annuities industry. Regarding private credit exposures, direct middle market lending represents approximately 1% of Corebridge's total investment portfolio. Thus, even if recent high-profile defaults foreshadow a major credit cycle in the private loan market, which we believe is relatively unlikely, we would still expect the impact on the company's capital position to be manageable, particularly when factoring in existing excess capital buffers.
EQH	As private credit concerns proliferated, two of our holdings, Corebridge Financial and Equitable Holdings, sold off in concert with alternative asset managers despite having very different business models. Shortly thereafter in late March, the two companies announced a surprise merger agreement; the deal was initially well received by the market but quickly took a back seat to persistent private credit fears. With both stocks trading at mid-single-digit forward earnings multiples, we began adding to our positions. Regarding private credit exposures, direct middle market lending represents less than 1% of Equitable's total investment portfolio.
POR.DE	Porsche AG, which spun out from Volkswagen in 2022, averaged an enviable 17% auto EBIT margin over the decade preceding 2025. Last year, that number effectively dropped to zero, driven by a major downturn in its China business due to homegrown competition, combined with a self-inflicted gap in its product cycle. As Porsche's margins eroded over approximately the past two years, the stock price unsurprisingly collapsed, falling nearly 70% from its May 2023 peak through the first quarter of 2026. When Porsche dropped into the first valuation quintile, we refreshed our thesis on the company, which we had previously owned indirectly via our stake in Volkswagen. We began building a position with the stock trading around 9x our normal earnings estimate. We believe Porsche's volumes should improve markedly as the automaker refreshes its internal combustion engine (ICE) model lineup, while its China exposure – now accounting for 15% of deliveries, down from 33% in 2022 – has been substantially de-risked, with capital investments expected to peak this year. At the same time, Porsche's new CEO is intent on rationalizing the company's cost structure, which we believe is both necessary and achievable, with low-hanging fruit (mostly headcount) having already been identified and quantified by management. Perhaps most crucially, based on our research, we believe Porsche's world-class brand value remains unimpaired, enabling the luxury automaker's volume-driven earnings recovery over the coming years. We introduced luxury automaker Porsche, where a China downturn and a self-inflicted product-cycle gap have depressed earnings; refreshed models and cost restructuring should drive a recovery, supported by a world-class brand.
MBG.DE	The purchase was funded by our holdings in German peer Mercedes-Benz, which, despite having a pristine balance sheet and solid capital return story, is more susceptible to Chinese competition with a less tangible earnings recovery path than Porsche, in our view. We funded these purchases by exiting Nokia, Mercedes-Benz, Umicore, and ArcelorMittal.
CDW	We initiated a position in market-leading IT distributor CDW Corp., at approximately 7x our estimate of the company's normal earnings. Historically focused on hardware sales, CDW has been transitioning to a full-stack solutions provider with a higher mix of software and services to help companies navigate complex IT projects such as cloud migration and cybersecurity. The investment required to facilitate this transition inflated the company's SG&A, resulting in margin compression despite healthy top-line growth, pressuring the share price and presenting a compelling value opportunity. CDW is the only industry player with the requisite scale to invest in vertical expertise and solutions, which we view as a long-term competitive advantage for the company. We also view AI as a potential tailwind for CDW, as any increase in the complexity of the IT environment increases the value of CDW's solutions for its customers. Our investment thesis contemplates a stabilization of margins, with modest revenue growth not predicated on AI. As CDW's solutions-and-services push matures, we expect the company to start generating positive operating leverage again – the absence of which has been a key headwind for the stock.

TICKER

COMMENTARY

ACN

Global IT services provider Accenture also detracted after management reduced its full-year revenue guidance and raised its acquisition spend. IT services companies Cognizant and Accenture declined materially following weaker organic growth guidance and, in Accenture's case, the announcement of increased future acquisitions. The market continues to assess the long-term implications of AI-driven disruption on IT services business models and the near-term shift in client spending toward AI-related token consumption at the expense of services spending. We initiated a position in Accenture, where the weakness that pressured the shares created the opportunity. It now trades near its lowest valuation in a decade and we believe that it stands to benefit from rising AI-enabled automation demand. Accenture is the world's largest IT services firm. Because it over-indexes to consulting-led transformation work, which pairs business expertise with engineering, Accenture is in the room when clients set direction. That position earns a premium, visible in revenue per employee of roughly $90,000, nearly twice the level of India's largest outsourcing firms. The mix also carries little of the commoditized application development that AI automates first. The stock has been cut in half over the past year on fears that organic growth is impaired—fears that were deepened by a June guidance cut and stepped-up acquisition spending. But many companies are still in the early stages of adopting AI across the enterprise. Clients are asking Accenture what to do about AI but deferring the large programs that follow, because spending on AI itself is crowding out the rest of the technology budget. That work is deferred, not gone, and we believe that Accenture is well positioned to capture it when those programs begin. Meanwhile, investors collect roughly 12% of the market capitalization annually in dividends and buybacks.

CTSH

IT services company Cognizant Technology Solutions was the largest individual detractor, declining despite beating on earnings and bookings, as persistent concerns about AI disruption to the IT services business model weighed on the stock. IT services companies Cognizant and Accenture declined materially following weaker organic growth guidance. The market continues to assess the long-term implications of AI-driven disruption on IT services business models and the near-term shift in client spending toward AI-related token consumption at the expense of services spending. Cognizant is more exposed to the bear case than Accenture, with more of its revenue tied to delivery and operations work where AI can reduce human effort. However, roughly 60% of its revenue comes from healthcare and financial services, where claims, payments, and risk systems cannot fail. These are not industries where clients can simply hand a workflow to an AI tool and hope it works. Cognizant is embedded in them, with its proprietary TriZetto platform processing roughly two-thirds of U.S. healthcare claims. Cognizant has also been aggressive in evolving its pricing model, with fixed-price and outcome-based contracts crossing 50% of revenue for the first time this year, accepting the risk of cost overruns in exchange for keeping a share of the productivity AI creates. Demand is holding up, with trailing-12-month bookings up 11% from a year ago, as new work outpaces the price deflation on each contract.

GLOB

Globant is the smallest of the three companies and the most digital-native. Founded in Argentina and staffed largely across Latin America, it builds the consumer-facing side of technology—the streaming apps, games, and fintech experiences of clients like Disney and Google—not legacy systems or back-office operations. Its expertise is pairing design talent with engineering, and design currently remains a challenge for AI. Deciding what a product should be and how people will interact with it, refined through iteration with the client, is valuable; consumers pay for novelty while AI models converge on the familiar. Engineering will become more AI-assisted, and Globant is adapting how it sells that work. Subscription teams called AI Pods combine its engineers with AI agents in an early attempt to decouple revenue from billable hours. Revenue per employee, roughly $85,000, rivals that of Accenture and has risen every year since 2022.

TSM

Taiwanese foundry leader Taiwan Semiconductor Manufacturing contributed, benefiting from supply tightness, as demand for advanced capacity outpaced its conservative expansion. Following relative strength, we trimmed Taiwan Semiconductor Manufacturing. We continue to own select businesses where the earnings uplift has been driven more by unit growth and a higher-quality, less commodity-dependent product mix than by the pricing spike itself.

005930.KS

Korean memory manufacturer Samsung Electronics rose sharply, as unabated memory demand fueled expectations of DRAM shortages through 2027. We concluded our exit from Samsung Electronics in the quarter amid the stock's meteoric rise; we believe it is trading at levels unsupported by its long-term earnings power. During the downturn of 2022 and 2023, memory and semiconductor stocks fell into the cheapest quintile of our investable universe. We bought Samsung, TSMC, and several other semiconductor-related businesses when they were genuinely cheap on their mid-cycle earnings potential, and we benefited as they recovered.

EQNR

Norwegian energy company Equinor and British oil major Shell both experienced share price declines as a result of easing Middle East tensions causing oil prices to reverse. Norwegian oil and gas producer Equinor was the largest laggard, as oil prices fell on hopes of an end to the Middle East conflict. We trimmed several of our positions on strength, including Norway's Equinor.

SHEL

Norwegian energy company Equinor and British oil major Shell both experienced share price declines as a result of easing Middle East tensions causing oil prices to reverse. We trimmed several of our positions on strength, including the UK's Shell.

DOW

Chemical producer Dow fell in concert with oil prices. U.S.-based chemicals giant Dow, Inc., was similarly strong, as the company's advantaged feedstock cost position resulted in a material profit uplift as oil-to-gas spreads blew out, and we sold the stock into strength. Commodity chemicals producer Dow also detracted, as the stock gave back gains from earlier in the year when Middle East supply disruptions had tightened petrochemical markets.

Shares of U.S. megabank Citigroup reached post-GFC highs on the back of steadily improving returns on tangible common equity, underpinned by notable expense control – a historical overhang on the stock – and impressive top-line growth. Management has been reducing the bank's excess capital position while increasing shareholder returns, and we trimmed our position on strength with the stock trading north of 1.4x tangible book value, its highest level since 2008.

UBS

We also took some money off the table in diversified Swiss giant UBS, whose shares benefited from strong capital markets activity and encouraging news flow on potentially less onerous Swiss capital regulations. Swiss lender UBS Group rose on growing confidence that Switzerland's proposed bank-capital increase would be softened materially.

HSBA.L

Lastly, we sold shares of HSBC, which have doubled since Liberation Day, driven by a recovery in loan growth, strong momentum in the company's sprawling wealth management business, and solid execution on its cost savings program.

CRBG

After underperforming in 2023, U.S. life insurance stocks staged a powerful rebound in 2024. In early 2026, investors' anxieties resurfaced, this time due to private credit exposure. As private credit concerns proliferated, two of our holdings, Corebridge Financial and Equitable Holdings, sold off in concert with alternative asset managers despite having very different business models. Shortly thereafter in late March, the two companies announced a surprise merger agreement; the deal was initially well received by the market but quickly took a back seat to persistent private credit fears. With both stocks trading at mid-single-digit forward earnings multiples, we began adding to our positions. We believe the proposed merger makes strategic sense given the two companies' complementary business models and the increasing importance of scaled distribution in the annuities industry. Regarding private credit exposures, direct middle market lending represents approximately 1% of Corebridge's total investment portfolio. Thus, even if recent high-profile defaults foreshadow a major credit cycle in the private loan market, which we believe is relatively unlikely, we would still expect the impact on the company's capital position to be manageable, particularly when factoring in existing excess capital buffers.

EQH

As private credit concerns proliferated, two of our holdings, Corebridge Financial and Equitable Holdings, sold off in concert with alternative asset managers despite having very different business models. Shortly thereafter in late March, the two companies announced a surprise merger agreement; the deal was initially well received by the market but quickly took a back seat to persistent private credit fears. With both stocks trading at mid-single-digit forward earnings multiples, we began adding to our positions. Regarding private credit exposures, direct middle market lending represents less than 1% of Equitable's total investment portfolio.

POR.DE

Porsche AG, which spun out from Volkswagen in 2022, averaged an enviable 17% auto EBIT margin over the decade preceding 2025. Last year, that number effectively dropped to zero, driven by a major downturn in its China business due to homegrown competition, combined with a self-inflicted gap in its product cycle. As Porsche's margins eroded over approximately the past two years, the stock price unsurprisingly collapsed, falling nearly 70% from its May 2023 peak through the first quarter of 2026. When Porsche dropped into the first valuation quintile, we refreshed our thesis on the company, which we had previously owned indirectly via our stake in Volkswagen. We began building a position with the stock trading around 9x our normal earnings estimate. We believe Porsche's volumes should improve markedly as the automaker refreshes its internal combustion engine (ICE) model lineup, while its China exposure – now accounting for 15% of deliveries, down from 33% in 2022 – has been substantially de-risked, with capital investments expected to peak this year. At the same time, Porsche's new CEO is intent on rationalizing the company's cost structure, which we believe is both necessary and achievable, with low-hanging fruit (mostly headcount) having already been identified and quantified by management. Perhaps most crucially, based on our research, we believe Porsche's world-class brand value remains unimpaired, enabling the luxury automaker's volume-driven earnings recovery over the coming years. We introduced luxury automaker Porsche, where a China downturn and a self-inflicted product-cycle gap have depressed earnings; refreshed models and cost restructuring should drive a recovery, supported by a world-class brand.

MBG.DE

The purchase was funded by our holdings in German peer Mercedes-Benz, which, despite having a pristine balance sheet and solid capital return story, is more susceptible to Chinese competition with a less tangible earnings recovery path than Porsche, in our view. We funded these purchases by exiting Nokia, Mercedes-Benz, Umicore, and ArcelorMittal.

CDW

We initiated a position in market-leading IT distributor CDW Corp., at approximately 7x our estimate of the company's normal earnings. Historically focused on hardware sales, CDW has been transitioning to a full-stack solutions provider with a higher mix of software and services to help companies navigate complex IT projects such as cloud migration and cybersecurity. The investment required to facilitate this transition inflated the company's SG&A, resulting in margin compression despite healthy top-line growth, pressuring the share price and presenting a compelling value opportunity. CDW is the only industry player with the requisite scale to invest in vertical expertise and solutions, which we view as a long-term competitive advantage for the company. We also view AI as a potential tailwind for CDW, as any increase in the complexity of the IT environment increases the value of CDW's solutions for its customers. Our investment thesis contemplates a stabilization of margins, with modest revenue growth not predicated on AI. As CDW's solutions-and-services push matures, we expect the company to start generating positive operating leverage again – the absence of which has been a key headwind for the stock.

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Investment Summary

Investor Summary

Fund Strategy

FUND PERFORMANCE AS OF 30th June 2026

Investor Letters

Latest Executive Summary:

Executive Summary

Core Thesis

Forward Outlook

Investment Themes

Semiconductor Cycle

AI

Oil

Money Center Banks

Life Insurance

Autos

IT Services

Sustainability

AI

Oil

Value

China

AI

Electrification

Biotech

Solar

Space

Value

AI

Value

Japan

Financials

E-commerce

Pharmaceuticals

Investor Pitches

Current Portfolio as of ( 30th June 2026 )

Key Risks identified by Manager:

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Rakesh Bordia Top Holdings

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Pzena International Value ADR Strategy