Investment Pitches

Pitch Summary:
After seven years in the strategy, we have decided to sell our holding in The Trade Desk, the independent advertising technology platform. While the company has delivered exceptional revenue growth and strong returns since our initial investment, we have concerns about the durability of its competitive position. The rise of generative AI appears to be reinforcing the strength of vertically integrated platforms, such as Amazon and Google, whose ownership of first-party data enables them to extract greater yield across full-stack advertising systems. In contrast, The Trade Desk's open-internet model depends on fragmented third-party integrations that may prove less advantageous in an AI-driven market. Recent interactions with management reinforced these concerns. With growth decelerating and the balance of market power appearing to shift toward closed ecosystems, we see limited asymmetry from here and concluded that capital would be better deployed in higher-conviction opportunities elsewhere.

BSD Analysis:
The Trade Desk is the cleanest pure-play on open internet programmatic advertising, and its moat is independence plus scale. Advertisers trust it because it doesn’t compete with them for inventory the way walled gardens do. Identity resolution via UID2 adds stickiness, but it’s an ecosystem bet, not a guaranteed standard. Revenue growth tracks ad budgets, which makes cycles unavoidable even with share gains. Operating leverage is powerful when spend expands and unforgiving when it doesn’t. Competition from platforms and in-house tools never disappears. The bull case is continued shift toward transparent, performance-driven ad buying outside the big platforms. The bear case is budget pressure and fragmentation limiting take-rate expansion. The Trade Desk works if the open internet remains truly open.

Pitch Summary:
We sold Pinterest, the visual discovery and digital advertising platform, as our confidence in its ability to deliver sustained growth has declined. Product execution has become increasingly incremental, with limited evidence of a strategy capable of driving durable re-acceleration in a highly competitive advertising market. We therefore chose to reallocate capital to higher-conviction opportunities.

BSD Analysis:
Pinterest monetizes intent rather than attention, which makes its ad inventory unusually valuable. User growth is steady, not explosive. Monetization improvements drive earnings leverage. AI enhances discovery and ad relevance. Investors dismiss Pinterest as a niche platform. Yet shopping intent is defensible and sticky. International ARPU still has room to grow. This is a quiet turnaround with improving economics. Utility beats virality.

Pitch Summary:
We exited Inspire Medical, which develops implantable therapies for obstructive sleep apnoea, following a reduction in confidence in the pace and consistency of execution. While the market opportunity remains attractive, recent volatility suggests adoption may be less predictable as the business moves beyond early adopters. Capital was redeployed to opportunities where we have greater confidence in the upside opportunity.

BSD Analysis:
Inspire owns a differentiated therapy for sleep apnea patients who reject CPAP. Clinical outcomes drive physician adoption, not marketing. Procedure volumes continue to grow as awareness expands. Reimbursement dynamics remain favorable. Competition exists, but Inspire has first-mover advantage and data. Investors worry about valuation more than durability. Margins scale with procedure growth. This is medtech adoption, not device churn. Sleep isn’t optional.

Pitch Summary:
We have decided to sell our holding in Chewy, the US-based online retailer of pet supplies and services. While the business has delivered steady operational improvements since our initial investment six years ago, including material margin expansion and a loyal customer base supported by its Autoship subscription model, we do not see a sufficiently compelling long-term growth opportunity. Core ecommerce growth has slowed to mid-single digits, and management's expansion plans in veterinary care and health services remain modest and untested in scale. The company's focus on incremental margin gains rather than ambitious reinvestment leaves limited room for a durable acceleration in earnings. In our view, Chewy has become a mature, efficient retailer rather than a differentiated platform with meaningful optionality. Given limited upside potential and more attractive opportunities elsewhere in the Fund, we have exited the position.

BSD Analysis:
Chewy owns the emotional and logistical relationship with pet owners, which is harder to disrupt than it sounds. Autoship drives recurring revenue and predictability. Margin pressure persists due to fulfillment costs, not demand erosion. Pet spending is resilient even in downturns. Investors confuse slower growth with broken economics. Scale improves fulfillment efficiency over time. Private-label expansion adds margin upside. This is infrastructure for pet ownership, not a fad retailer. Loyalty is the moat.

Pitch Summary:
We have made a new investment in United Therapeutics, a highly profitable biotechnology company specialising in the treatment of severe lung diseases. The company is underpinned by Tyvaso's durable cash flows and a strong balance sheet. While competition in pulmonary arterial hypertension is increasing, we see a more compelling opportunity in Tyvaso's expansion into idiopathic pulmonary fibrosis, a larger, underserved market where existing therapies are poorly tolerated and discontinuation rates are high. Recent late-stage data have shown that Tyvaso preserves lung function and improves quality of life with a low side-effect burden, supporting earlier use and combination therapy. This positions the drug for a potential US launch around 2027, following a confirmatory study in early 2026. Progressive pulmonary fibrosis represents a natural extension, while Ralinepag could broaden United's reach in pulmonary arterial hypertension later this decade. Financially, the company combines high margins, strong free cash flow, and capital discipline, funding growth internally. At today's valuation, we see attractive upside potential.

BSD Analysis:
United Therapeutics is a rare biotech that behaves like a disciplined industrial company. Its pulmonary hypertension franchise throws off enormous cash flow. Pipeline investments are self-funded, not speculative. Management prioritizes capital returns alongside R&D. Investors worry about concentration risk, but replacement therapies are advancing. The company’s organ manufacturing ambition adds long-term optionality. Execution has historically been conservative and effective. This is biotech without existential drama. Cash flow buys patience.

Pitch Summary:
We have participated in the IPO of Medline, a leading manufacturer and distributor of medical supplies in the United States. Medline has built an integrated business model that combines large-scale distribution with a broad portfolio of proprietary products, allowing it to operate as both supplier and logistics partner to healthcare providers. Its extensive logistics network and warehouse capacity give it a structural advantage in reliability and cost efficiency. Hospitals and healthcare systems depend on Medline's reliability to manage just-in-time supply chains, reinforcing long-term prime vendor contracts and giving the company privileged access to customer procurement decisions. Over time, this access could enable a shift from third-party products toward higher-margin Medline-branded items, driving consistent growth in profitability. The company's culture of autonomy, customer focus and disciplined execution, coupled with its long track record of reinvestment, supports a durable competitive advantage. With stable demand, recurring revenue, and a clear path to compound earnings in the mid-teens, Medline is well placed to deliver long-term value as a trusted infrastructure partner to the US healthcare system.

BSD Analysis:
Medline is healthcare distribution at its most boring and most powerful. Hospitals don’t shop around lightly for essential supplies, which creates deep stickiness. Scale and logistics execution matter more than innovation hype. Margin pressure exists, but volume and efficiency offset it. Private ownership kept discipline intact longer than peers. Investors underestimate how resilient healthcare supply chains are. Even modest pricing power compounds at scale. This is infrastructure hidden inside cardboard boxes. Boring businesses feed hospitals — literally.

Pitch Summary:
We have bought Coinbase, a leading regulated crypto exchange and infrastructure provider. It serves over 100 million users and 13,000 institutions, giving it a strong position as traditional finance adopts digital assets. Coinbase’s regulatory posture and broad product suite make it a trusted partner for custody, trading, and related services. While trading fees still dominate revenues, the business is diversifying into staking and blockchain rewards, stablecoins, and infrastructure, including its Base layer-2 network (Base is a layer 2 network developed by Coinbase to enhance the scalability and efficiency of the Ethereum blockchain). As crypto adoption and institutional participation grow, we see Coinbase as well placed to compound in the digital asset economy.

BSD Analysis:
Coinbase is the cleanest public-market proxy for crypto infrastructure rather than speculation. Volumes swing violently, but custody, staking, and institutional services improve revenue quality. Regulatory clarity is the biggest catalyst — in either direction. The balance sheet is strong enough to survive crypto winters. Investors confuse volatility with fragility. When crypto activity spikes, operating leverage is extreme. Coinbase doesn’t need to pick winning tokens — it just needs activity. This is tollbooth economics on financial experimentation. Risk is obvious, upside is nonlinear.

Pitch Summary:
We initiated a position in Alphabet, last held in the Fund between 2016 and 2021. The owner of Google Search, YouTube and Google Cloud has strengthened its artificial intelligence capabilities, leveraging global distribution, proprietary data, and infrastructure to build Gemini, widely viewed as a leading frontier artificial intelligence model. Our confidence has increased following the implementation of a tighter organizational structure under Google DeepMind and the return of founder Sergey Brin, which appears to be improving focus, product velocity, and the pace of artificial intelligence integration. Alphabet also benefits from vertical integration through Google Cloud and its in-house TPU (Tensor Processing Unit) chip designs. Crucially, the core businesses continue to perform well, generating resilient cash flows to fund investment in artificial intelligence and other growth initiatives. Overall, we believe Alphabet’s competitive moat has expanded, with multiple long-term growth drivers that can generate substantial value.

BSD Analysis:
Alphabet remains the most powerful attention monetization engine ever built. Search continues to print cash even as interfaces evolve. YouTube is now a full-spectrum media business with ads, subscriptions, and creator economics reinforcing each other. AI spend is massive, but Alphabet owns the data, distribution, and talent to make it productive. Cloud margins are quietly improving, adding a second profit pillar. Regulatory pressure is constant but rarely changes user behavior. Investors fear disruption more than they should. Alphabet adapts faster than narratives admit. This is a cash machine funding its own reinvention.

Pitch Summary:
Technology-based health insurance company Lemonade's shares rose strongly over the quarter. In-force premiums increased by around 30% year-over-year, revenue rose by over 40%, and gross profit more than doubled, reflecting improved underwriting performance and pricing discipline. Management reiterated confidence in Lemonade’s path to profitability, reinforcing that growth is now being delivered alongside better economics. The share price responded positively as investors gained confidence in Lemonade’s ability to scale by improving margins and emerging operating leverage.

BSD Analysis:
Lemonade is still trying to prove that insurance can be rewritten as software rather than underwriting theater. The brand resonates, but loss ratios remind investors that physics still apply to risk. AI-driven claims and pricing are promising, yet scale hasn’t fully translated into profitability. Investors punish the stock because insurance turnarounds require patience, not demos. The balance sheet buys time, but execution must tighten. Growth without underwriting discipline is worthless here. If loss trends stabilize, sentiment flips fast. This is either a modern insurer in the making or a cautionary tale. The math will decide.

Pitch Summary:
Cloud-based commerce platform provider Shopify delivered another strong quarter with revenues growing 32% year-on-year. Enterprise demand, combined with the continued rollout of artificial intelligence-enabled tools, supported momentum across the ecosystem. Rising free-cash-flow margins have provided evidence of operating leverage at scale, which is underpinned by the compounded growth of its merchant base and steadily rising take-rate over time. We view Shopify's platform as becoming increasingly critical infrastructure for global e-commerce.

BSD Analysis:
Shopify is the operating system for merchants who refuse to become tenants inside Amazon’s mall. The platform has matured from storefront software into a full-stack commerce infrastructure spanning payments, fulfillment partnerships, and marketing. Growth slowed as consumer spending normalized, but merchant churn remains low because switching costs are operational, not emotional. Shopify benefits when entrepreneurship rises, even if consumer demand is uneven. Margins are improving as management prioritizes discipline over growth optics. Investors fixate on competition while underestimating ecosystem lock-in. AI enhances merchant productivity rather than disrupting the model. This is long-duration commerce infrastructure wearing a volatility discount. Shopify doesn’t need to dominate retail — just empower it.

Pitch Summary:
Biotechnology company Guardant Health's shares rose over the quarter, driven by strong fundamentals and management guidance. Revenue grew close to 40% year-over-year, and management raised full-year revenue guidance, reflecting continued momentum in the core oncology franchise and increasing contribution from screening. Progress across both volumes and mix reinforced confidence that Guardant is evolving into a multi-product diagnostics platform. We are encouraged by progress at the company and remain long-term in our outlook.

BSD Analysis:
Guardant operates at the frontier of liquid biopsy and oncology diagnostics. The science is compelling, adoption is growing, but profitability remains elusive. Clinical data drives valuation more than revenue today. Competition is intense, but Guardant’s tests are embedded in workflows. Cash burn worries investors. If reimbursement and adoption align, operating leverage is massive. This is biotech with diagnostics economics. Risk is high, payoff is asymmetric. Execution will decide everything.

Pitch Summary:
Streaming platform Netflix was a detractor, as its shares fell by around 22% despite a 17% year-over-year revenue growth. The earnings miss reflected a one-off Brazilian tax charge, which depressed margins. Management noted operating margins would have exceeded guidance without this item and raised full-year free cash flow guidance to approximately $9 billion. Progress in advertising continues, with upfront commitments more than doubling and increasing programmatic demand, while partnerships, such as bringing select video podcasts from audio platform Spotify to Netflix starting in 2026, support engagement. The quarter also ended with the announcement of the proposed acquisition of Warner Bros., the mass media and entertainment company, which we will assess through the lens of long-term value creation and execution risk.

BSD Analysis:
Netflix has matured into a global entertainment utility with improving economics. Subscriber growth matters less than monetization. Advertising adds a second profit engine. Content spend is more disciplined than peers. Scale advantages are widening. Competition fragments rather than consolidates viewers. Cash flow inflection changed the narrative. Investors still debate saturation. Netflix adapts faster than critics expect.

Pitch Summary:
Designs and develops mobile learning platform Duolingo was a meaningful detractor as the shares de-rated following a reset in near-term expectations. While execution remains solid, management guided fourth-quarter bookings of $329.5 million to $335.5 million, below consensus, which overshadowed continued operational progress. Core momentum remains encouraging, with paid subscribers increasing to 11.5 million (+34% year-over-year) and an ongoing focus on enhancing learning outcomes and retention. We continue to monitor the contribution of higher-priced tiers, such as Duolingo Max, alongside the longer-term implications of generative artificial intelligence for differentiation and market expansion beyond language learning.

BSD Analysis:
Duolingo turned language learning into a habit rather than a chore. Engagement metrics rival social media apps. Monetization continues to improve without hurting growth. The freemium model scales globally with low marginal cost. AI improves personalization and efficiency. Investors fear competition, but brand matters in education. Expansion into new subjects adds optionality. Margins improve with scale. This is education software behaving like a consumer platform.

Pitch Summary:
User-generated gaming platform Roblox gave back some prior share price gains despite very strong underlying growth, as management signaled higher investment that will weigh on near-term profitability. Demand remains robust: with bookings rising 70% year-over-year, and revenue increasing 48%, both well ahead of expectations. This growth is supported by strong US performance, expanding engagement, and improving delivery costs. The share price weakness reflected accelerated spending on artificial intelligence, creator tools, safety, and data center capacity, which lifted losses and prompted guidance for further margin pressure and higher capital spending into 2026. Importantly, cash generation remains strong, with operating cash flow more than doubling, and a $5 billion cash balance providing flexibility.

BSD Analysis:
Roblox is not a game — it’s a platform where users create, socialize, and spend time. Engagement remains massive even as monetization lags. The demographic ages up, extending the runway. Costs are high, profitability distant. Investors oscillate between hype and despair. If monetization improves modestly, leverage is enormous. Platform stickiness is real. Content creation scales organically. This is optionality priced like uncertainty.

Pitch Summary:
Samsara continued to invest heavily in growth, weighing on near-term profitability. Customer adoption remains strong as businesses seek efficiency and safety improvements. We believe the company’s platform approach supports long-term scalable growth.

BSD Analysis:
Samsara sells IoT software that makes physical operations visible and measurable. Customers adopt it to cut costs, improve safety, and manage fleets. Once deployed, it becomes mission-critical. Growth remains strong, margins are improving. Investors debate valuation rather than retention. Hardware is just the wedge; software is the annuity. Expansion within customers drives LTV. This is SaaS embedded in the real world. Visibility sells itself.

Pitch Summary:
QXO was added as a new position reflecting confidence in management’s ability to scale through acquisitions. The company is pursuing a roll-up strategy in a fragmented market. We see potential for value creation through operational improvement and consolidation.

BSD Analysis:
QXO is a roll-up platform betting that fragmented distribution can be rationalized with software and capital discipline. Execution risk is high because integration always is. Early moves suggest ambition, not caution. Investors don’t know how to value the model yet. Success depends on culture more than capital. Margins can improve quickly if systems standardize. Failure would be loud. This is asymmetric by design. Not for the faint-hearted.

Pitch Summary:
Games Workshop continued to perform well driven by strong IP monetization and disciplined cost control. Expansion into licensing and media provides incremental growth opportunities. The company’s passionate customer base supports durable returns.

BSD Analysis:
Games Workshop is a rare IP company that monetizes obsession rather than mass appeal. Warhammer fans are loyal, repeat buyers with high lifetime value. Pricing power is real because substitutes don’t exist. Manufacturing and distribution are tightly controlled. Investors worry about growth saturation. Yet IP licensing and media add optionality. Cash flow supports dividends generously. This is fandom monetization done surgically. Obsession compounds.

Pitch Summary:
AUTO1 Group showed improving unit economics as cost discipline and scale benefits emerged. Management is focused on profitability while maintaining growth. We believe the platform model offers significant long-term optionality as online used car penetration rises.

BSD Analysis:
AUTO1 is a volume-driven used-car marketplace whose real product is liquidity, not cars. The moat is data, pricing algorithms, and a pan-European buyer network that small dealers can’t replicate. That said, unit economics are thin, which means operational discipline matters more than headline growth. Gross profit per unit is the key metric—everything else is noise. Capital intensity and working capital swings make downturns painful when volumes slow or prices move against inventory. Competition is persistent, but scale still confers an advantage in sourcing and remarketing speed. The bull case is normalized used-car markets with steady GPU expansion and cost control. The bear case is margin compression in a cyclical category that reminds investors it’s still auto retail at heart.

Pitch Summary:
Auto Trader delivered steady performance supported by resilient dealer demand and strong pricing. The company continues to invest in data and digital tools to enhance customer value. Its asset-light model and high margins underpin attractive cash generation.

BSD Analysis:
Auto Trader is the UK’s dominant digital car marketplace, monetizing attention rather than inventory. Dealers need leads, and Auto Trader owns the funnel. Pricing power persists even when auto sales slow. The cost base is lean, creating SaaS-like margins. Investors worry about EV disruption unnecessarily. The platform adapts regardless of drivetrain. Data and analytics deepen dealer dependence. Volatility in used cars creates noise, not risk. This is marketplace monopoly economics.

Pitch Summary:
TSMC contributed positively as demand for advanced nodes tied to AI workloads accelerated. The company’s scale, execution and technological leadership remain unmatched. While capital intensity is high, we believe returns will be supported by pricing power and customer dependence.

BSD Analysis:
TSMC is the most strategically important manufacturer in the global economy. Advanced nodes, AI chips, and HPC all run through its fabs. Capex is enormous, but no competitor can match scale and yield. Customer trust is a moat that compounds over decades. Geopolitical risk dominates headlines but also ensures government backing. Margins fluctuate with cycles, dominance does not. Investors debate valuation endlessly. The world designs chips around TSMC. This is manufacturing power at monopoly scale.