Investment Pitches

Pitch Summary:
Headquartered in Houston, Texas, Chevron is one of the world's largest integrated energy companies, with operations spanning upstream exploration and production, downstream refining and marketing, and chemicals. The company traces its roots back to the 1911 breakup of Standard Oil and today produces approximately 4 million barrels of oil equivalent per day. While Chevron operates across the full value chain, roughly 85% of earnings are generated from upstream operations, reflecting its oil-leveraged portfolio. This upstream concentration is intentional and supported by a portfolio of low-cost, long-lived assets. The asset base includes deepwater production in the Gulf of America and Guyana, a large and advantaged Permian Basin position, long-lived conventional production in Kazakhstan, and liquefied natural gas projects in Australia. Chevron also maintains a presence in Venezuela, though it remains a relatively small part of the portfolio. Under CEO Mike Wirth (appointed in 2018), Chevron has emphasized capital discipline, portfolio optimization and shareholder returns. This strategy has included both targeted acquisitions and meaningful divestitures to improve the portfolio. Consistent with this approach, Chevron completed the acquisition of Hess in 2025, increasing its exposure to the Stabroek Block offshore Guyana—one of the lowest-cost and highest-return oil developments globally. This transaction enhances Chevron's long-term production visibility and strengthens the quality of its upstream portfolio with a high-margin, long-duration asset base. Some of the quality characteristics we have identified for Chevron include: A low-cost, oil-leveraged upstream portfolio anchored by advantaged positions in the Permian Basin and Guyana; A royalty-advantaged Permian position, where approximately 75% of acreage carries low or no royalty burden, providing structural cost advantages and attractive returns; A diversified downstream and chemicals portfolio, which provides cash flow resilience across commodity cycles; Demonstrated capital discipline under current leadership, including measured acquisitions (Noble, PDC, Hess) and continued portfolio optimization. At current levels, we believe shares reflect conservative commodity assumptions and do not fully capture the company's normalized earnings power and strengthening FREE cash flow profile as major capital projects transition from investment to production and capital spending moderates. Combined with a competitive dividend yield and ongoing share repurchases, we believe Chevron offers attractive total return potential over our three- to- five-year investment horizon. Catalysts we have identified for Chevron, which we believe could drive appreciation over our three- to- five-year investment horizon, include: Completion and ramp-up of the Tengiz expansion in Kazakhstan, materially increasing FREE cash flow following a multi-year capital investment phase; Successful integration of Hess, expanding Chevron's ownership in the high-return Guyana Stabroek development and strengthening long-term production visibility; Permian Basin development transitioning toward a capital-efficient, cash-generative phase, supported by advantaged mineral ownership and reduced unit costs; Continued operating discipline under CEO Mike Wirth, including structural cost control and moderated capital intensity; Ongoing capital returns to shareholders through dividend growth and share repurchases.

BSD Analysis:
The manager presents a comprehensive bull case for Chevron based on portfolio quality, capital discipline, and multiple value catalysts. The investment thesis centers on Chevron's oil-leveraged upstream portfolio generating 85% of earnings from low-cost, long-lived assets including advantaged Permian Basin and Guyana positions. The 2025 Hess acquisition significantly enhances the portfolio by adding exposure to the Stabroek Block, one of the world's lowest-cost, highest-return oil developments. Key competitive advantages include a royalty-advantaged Permian position with 75% of acreage carrying minimal royalty burdens, providing structural cost advantages. The manager views current valuation as conservative, not reflecting normalized earnings power as major capital projects transition from investment to production phase. Multiple catalysts support the three-to-five-year outlook: Tengiz expansion completion in Kazakhstan, Hess integration benefits, Permian Basin transitioning to capital-efficient cash generation, and continued shareholder returns under CEO Mike Wirth's disciplined approach. The combination of strengthening free cash flow profile, competitive dividend yield, and ongoing share repurchases creates attractive total return potential.

Pitch Summary:
Qualcomm, a leading semiconductor and communications technology company, was one of the largest detractors for the quarter. Despite delivering record revenues during the period, the company guided to lower near-term results due to memory-related supply constraints. Results were impacted by higher memory prices, driven in part by strong demand for AI-related data center applications. This is constraining smartphone production despite otherwise healthy underlying demand and leading handset manufacturers to adopt more cautious production and inventory strategies, reducing near-term chip orders for Qualcomm. We view these headwinds as cyclical rather than structural. Qualcomm has retained its high market share in handsets, even as large clients (most notably Apple) continue to pursue insourcing initiatives, which we believe is a testament to its history of productive research & development (R&D) spending and technological leadership. Qualcomm also continues to execute its long-term strategy of evolving from a handset-centric company into a broader connected computing platform. Automotive, Internet of Things (IoT) and newer initiatives, such as AI-enabled PCs and edge inference processors, represent a growing portion of the company, with management targeting roughly half of chip revenue from non-handset applications by the end of the decade. We believe Qualcomm's technologies will continue to benefit as connectivity expands across devices and as AI workloads increasingly shift from the cloud to on-device (the edge), supporting its ability to generate strong FREE cash flow over time.

BSD Analysis:
The manager views Qualcomm's recent underperformance as a cyclical headwind rather than a structural challenge, maintaining confidence in the long-term investment thesis. Despite record revenues, near-term guidance weakness stems from memory supply constraints and elevated prices driven by AI data center demand, causing smartphone manufacturers to reduce production and inventory levels. The manager emphasizes Qualcomm's resilient market position, having maintained high handset market share despite Apple's insourcing efforts, demonstrating the value of its R&D investments and technological leadership. The key long-term catalyst is Qualcomm's strategic transformation from a handset-centric business to a diversified connected computing platform. Management targets approximately 50% of chip revenue from non-handset applications by decade-end, including automotive, IoT, AI-enabled PCs, and edge inference processors. This diversification strategy positions Qualcomm to benefit from expanding device connectivity and the shift of AI workloads from cloud to edge computing, supporting sustainable free cash flow generation across multiple end markets.

Pitch Summary:
MonotaRO, the Japanese business-to-business (B2B) e-commerce platform, was the largest detractor during the quarter. While results remained strong, the stock price was pressured by softer order trends in the enterprise business and a moderation in new customer additions following a period of unusually strong growth. Sentiment was also pressured by the company's exposure to small and medium-sized enterprises in manufacturing and construction, cyclical and cost-sensitive end markets, particularly amid elevated input costs. Despite these near-term headwinds, profitability remained stable, with margin expansion supported by procurement efficiencies, reduced promotional discounting and higher royalty income. Enterprise business also grew more than 20% through newly connected corporations, expanding to approximately one-third of sales, highlighting its increasing importance within the business and reinforcing a key catalyst we originally identified. Management also announced a ¥10 billion share repurchase program, supporting shareholder returns and reflecting continued discipline in capital allocation. Over the longer term, we believe MonotaRO remains well positioned to continue gaining share in Japan's fragmented and underpenetrated MRO market. The company's broad assortment, operating scale and growing enterprise presence, in our view, support a business that is becoming more embedded in customer procurement workflows over time.

BSD Analysis:
Despite near-term headwinds, the manager maintains a constructive long-term view on MonotaRO's market position and growth prospects. The thesis acknowledges cyclical pressures from exposure to cost-sensitive SMEs in manufacturing and construction, but emphasizes the company's structural advantages in Japan's fragmented MRO market. Key positive developments include stable profitability with margin expansion driven by procurement efficiencies and reduced promotional spending, plus over 20% enterprise business growth reaching one-third of total sales. The ¥10 billion share buyback demonstrates management's confidence and disciplined capital allocation. The manager views temporary softness in order trends and customer additions as cyclical rather than structural, given MonotaRO's broad product assortment, operating scale, and increasing enterprise penetration. The long-term investment case centers on the company becoming more embedded in customer procurement workflows, supporting sustainable market share gains in an underpenetrated market. This positions MonotaRO to benefit from Japan's digital transformation in B2B commerce.

Pitch Summary:
Otsuka Holdings, a leading Japanese healthcare company, was also a top contributor to performance during the quarter. We have long admired the company's robust and diversified product portfolio, which we believe is well positioned to gain market share in various applications such as depression, schizophrenia and oncology. As awareness of major depressive disorders has continued to increase, Otsuka's leading products, including Rexulti and Abilify Maintena, have exhibited strong prescription growth. In oncology, the heightened attention around colorectal cancer, which has spiked in adults under 55, has led to gains for the company's leading cancer drug, Lonsurf. Furthermore, the company continues to invest in its "Next 8" pipeline, which complements its existing portfolio and supports its next phase of growth. Management has also continued to invest in external innovation, as demonstrated by its recently announced agreement to acquire Transcend Therapeutics, which strengthens its position in psychiatric and neurological disorders, including adding a late-stage candidate targeting post-traumatic stress disorder (PTSD). As the company continues to reinvest in innovation while simultaneously returning value to shareholders, as exemplified by its most recent ¥50 billion share buyback program, we remain confident that Otsuka will continue to deliver attractive long-term returns over time.

BSD Analysis:
The manager's bull thesis for Otsuka Holdings is built on the company's diversified pharmaceutical portfolio and strong positioning in high-growth therapeutic areas. The investment case is anchored by robust prescription growth for key psychiatric drugs Rexulti and Abilify Maintena, benefiting from increased awareness of major depressive disorders. The oncology franchise is gaining momentum with Lonsurf capitalizing on rising colorectal cancer incidence in younger adults, representing a significant market opportunity. The "Next 8" pipeline provides visibility into future growth drivers, while the Transcend Therapeutics acquisition adds a late-stage PTSD candidate, expanding the company's neuropsychiatric portfolio. Management's balanced capital allocation approach, combining R&D investment with shareholder returns through a ¥50 billion buyback program, demonstrates financial discipline. The manager views Otsuka as well-positioned to gain market share across multiple therapeutic areas while maintaining strong innovation capabilities through both internal development and strategic acquisitions.

Pitch Summary:
TotalEnergies, one of the world's largest energy companies, was the top contributor for the quarter. While oil prices increased during the period, driven by geopolitical tensions in the Middle East and disruptions to supply through the Strait of Hormuz, our focus remains on the company's underlying operational execution across its diversified energy platform. As the fourth-largest major energy player in the world, the company operates across upstream, downstream, liquefied natural gas (LNG), and integrated power and renewable energy businesses. Within its upstream segment, TotalEnergies continues to deliver accretive growth, with new projects generating higher cash flow per barrel than its legacy portfolio, supporting both production growth and improving profitability. In the LNG segment, the company has started production in Angola, which will supply Europe and Asia with roughly 2 million tons of LNG per year, and has also signed an agreement with Glenfarne, the lead developer of the Alaska LNG project, to offtake 2 million tons of LNG annually for the next 20 years. We view LNG as a key structural driver of long-term growth, particularly given increasing demand for energy security in Asia and Europe. Lastly, within renewables, TotalEnergies and Masdar, an Abu Dhabi clean energy leader, formed a joint venture to accelerate renewable energy growth through onshore solar, wind and battery storage projects across Asia. In the U.S., the company has signed a long-term Power Purchase Agreement to provide 1 GW of solar capacity to power Google's data centers in Texas for 15 years. These initiatives reflect the company's strategy to build a more diversified and resilient energy platform over time. Overall, we believe TotalEnergies' combination of disciplined capital allocation, low-cost operations and integrated business model positions it to generate attractive FREE cash flow across commodity cycles, with recent operational progress reinforcing its long-term investment case.

BSD Analysis:
The manager presents a compelling bull case for TotalEnergies based on operational excellence and strategic diversification across the energy value chain. The thesis centers on the company's ability to generate superior cash flows through new upstream projects that outperform legacy assets, while building a more resilient business model through LNG and renewable energy expansion. Key catalysts include the Angola LNG project supplying 2 million tons annually to Europe and Asia, a 20-year Alaska LNG offtake agreement, and strategic partnerships like the Masdar joint venture for renewable development across Asia. The Google data center power agreement demonstrates the company's ability to secure long-term contracted revenue streams in renewables. The manager emphasizes TotalEnergies' disciplined capital allocation and integrated business model as competitive advantages that should drive attractive free cash flow generation across commodity cycles. This diversification strategy positions the company to benefit from both traditional energy demand and the energy transition, reducing cyclical volatility while maintaining exposure to energy security themes.

Pitch Summary:
Headquartered in Chicago, Illinois, Motorola Solutions (Motorola) is a global leader in mission-critical communications and security solutions. The company designs and deploys land mobile radio (LMR) networks, video security systems and command center software used by more than 100,000 public safety and enterprise customers in over 100 countries. At its core, Motorola provides the communication backbone used by police officers, firefighters and emergency responders. When first responders communicate during natural disasters or other emergencies, they are often operating on Motorola's private radio networks—systems specifically engineered to remain operational when commercial cellular networks fail or become congested. Motorola generates approximately three-quarters of its revenue from its legacy LMR business, which includes radio devices, network infrastructure and related services. The remaining revenue is derived from video surveillance, body-worn cameras, access control systems and command center software that integrates voice, video and data into unified workflows. The company primarily serves government agencies, with relationships that often span multiple decades and are supported by long-term service contracts and predictable refresh cycles.

BSD Analysis:
The manager presents a compelling bull case for Motorola Solutions based on its dominant position in mission-critical communications with extremely high switching costs and predictable revenue streams. The investment thesis centers on the company's entrenched market leadership in Project 25 land mobile radio systems, where reliability and resiliency are non-negotiable for public safety customers. Key competitive advantages include deeply embedded customer relationships spanning decades, long-term service contracts, and specialized regulatory expertise that creates significant barriers to entry. The manager highlights several catalysts including a continued mix shift toward higher-margin software and services, cloud migration and SaaS adoption in command center offerings, and integration of the Silvus Technologies acquisition expanding capabilities in defense and unmanned systems. The company's mission-critical nature provides exceptional cash flow visibility and pricing power, while the shift toward software and recurring revenue should drive margin expansion and enhanced shareholder returns over the investment horizon.

Pitch Summary:
Headquartered in Houston, Texas, Chevron is one of the world's largest integrated energy companies, with operations spanning upstream exploration and production, downstream refining and marketing, and chemicals. The company traces its roots back to the 1911 breakup of Standard Oil and today produces approximately 4 million barrels of oil equivalent per day. While Chevron operates across the full value chain, roughly 85% of earnings are generated from upstream operations, reflecting its oil-leveraged portfolio. This upstream concentration is intentional and supported by a portfolio of low-cost, long-lived assets. The asset base includes deepwater production in the Gulf of America and Guyana, a large and advantaged Permian Basin position, long-lived conventional production in Kazakhstan, and liquefied natural gas projects in Australia. Chevron also maintains a presence in Venezuela, though it remains a relatively small part of its portfolio. Under CEO Mike Wirth (appointed in 2018), Chevron has emphasized capital discipline, portfolio optimization and shareholder returns. This strategy has included both targeted acquisitions and meaningful divestitures to improve the portfolio. Consistent with this approach, Chevron completed the acquisition of Hess in 2025, increasing its exposure to the Stabroek Block offshore Guyana—one of the lowest-cost and highest-return oil developments globally. This transaction enhances Chevron's long-term production visibility and strengthens the quality of its upstream portfolio with a high-margin, long-duration asset base.

BSD Analysis:
The manager presents a compelling bull case for Chevron based on its high-quality, low-cost asset portfolio and disciplined capital allocation under CEO Mike Wirth. The investment thesis centers on Chevron's advantaged upstream positions, particularly in the Permian Basin and Guyana's Stabroek Block following the Hess acquisition. Key quality characteristics include a royalty-advantaged Permian position with 75% of acreage carrying low or no royalty burden, providing structural cost advantages. The manager highlights several catalysts including the Tengiz expansion completion in Kazakhstan, successful Hess integration expanding Guyana exposure, and the Permian transitioning to a capital-efficient phase. Chevron's diversified downstream operations provide cash flow resilience across commodity cycles. The manager views current valuation as attractive, not fully reflecting normalized earnings power as major projects transition from investment to production phase, supported by competitive dividend yield and ongoing share repurchases.

Pitch Summary:
Qualcomm, a leading semiconductor and communications technology company, was one of the largest detractors for the quarter. Despite delivering record revenues during the period, the company guided to lower near-term results due to memory-related supply constraints. Results were impacted by higher memory prices, driven in part by strong demand for AI-related data center applications. This is constraining smartphone production despite otherwise healthy underlying demand and leading handset manufacturers to adopt more cautious production and inventory strategies, reducing near-term chip orders for Qualcomm. We view these headwinds as cyclical rather than structural. Qualcomm has retained its high market share in handsets, even as large clients (most notably Apple) continue to pursue insourcing initiatives, which we believe is a testament to its history of productive research and development (R&D) spending and technological leadership. Qualcomm also continues to execute on its long-term strategy of evolving from a handset-centric company into a broader connected computing platform. Automotive, Internet of Things (IoT) and newer initiatives, such as AI-enabled PCs and edge inference processors, represent a growing portion of the company, with management targeting roughly half of chip revenue from non-handset applications by the end of the decade. We believe Qualcomm's technologies will continue to benefit as connectivity expands across devices and as AI workloads increasingly shift from the cloud to on-device (the edge), supporting its ability to generate strong FREE cash flow over time.

BSD Analysis:
The manager presents a bullish long-term view on Qualcomm despite near-term headwinds from memory supply constraints affecting smartphone production. The investment thesis centers on Qualcomm's successful diversification beyond handsets into automotive, IoT, and AI-enabled computing platforms. Despite competitive pressure from Apple's insourcing efforts, Qualcomm has maintained high market share, demonstrating the value of its R&D investments and technological leadership. Key catalysts include the company's strategic evolution toward a broader connected computing platform, with management targeting 50% of revenue from non-handset applications by decade-end. The manager views current challenges as cyclical rather than structural, emphasizing Qualcomm's positioning to benefit from edge AI adoption and expanding device connectivity. The company's strong free cash flow generation capability supports the long-term investment case as AI workloads shift from cloud to edge computing.

Pitch Summary:
Microsoft, the global leader in software and enterprise services, was the biggest detractor for the quarter. The decline was largely driven by a broad-based sell-off across software companies in early 2026 as investors weighed both the potential disruption from artificial intelligence and the near-term impact of elevated investment in AI infrastructure on margins and returns. Despite this, Microsoft delivered strong results, highlighted by continued strength in Azure, which grew 39% year over year, and ongoing demand across its cloud platform, where customer demand continues to exceed available capacity. We are also seeing increasing evidence of real-world adoption as Microsoft connects AI directly to systems of record and enterprise data—such as emails, documents and workflows—thereby embedding its tools more deeply into how organizations operate. While the recent sell-off reflects elevated uncertainty around the future of software, we view these concerns as overstated, particularly given Microsoft's uniquely integrated ecosystem. With widespread adoption of offerings such as Microsoft 365 Copilot and GitHub Copilot, and supported by robust FREE cash flow that enables continued investment at scale, we believe Microsoft remains well-positioned to benefit from the ongoing migration of enterprise workloads to the cloud, with AI further enhancing the value of its platform over time.

BSD Analysis:
The manager maintains a bullish stance on Microsoft despite recent underperformance, viewing the AI-driven sell-off as creating an attractive entry point. The investment thesis centers on Microsoft's dominant position in enterprise software and its successful integration of AI capabilities across its ecosystem. Azure's 39% growth demonstrates continued cloud migration momentum, while capacity constraints indicate strong underlying demand. The manager emphasizes Microsoft's unique competitive advantage in embedding AI directly into enterprise workflows through products like Microsoft 365 Copilot and GitHub Copilot. Key catalysts include the ongoing enterprise cloud migration, AI adoption driving platform value, and robust free cash flow enabling continued investment at scale. The manager views current concerns about AI disruption as overstated given Microsoft's integrated ecosystem and believes the company is well-positioned to benefit from long-term technology trends.

Pitch Summary:
Verizon, one of the largest telecommunications companies in the U.S., was a primary contributor during the period. After delivering its strongest customer growth in several years, Verizon now serves 96 million postpaid customers and 20 million prepaid connections, further cementing its leadership as the largest wireless carrier in the country. We believe this performance also reflects improving execution following the appointment of new CEO Dan Schulman in October 2025, as well as early signs of a broader strategic shift under his leadership. Furthermore, after completing its $20 billion acquisition of Frontier Communications, the company's fiber footprint has expanded to over 30 million homes and businesses. Management has emphasized that the company is at a "critical inflection point" and is repositioning the business toward more sustainable, value-driven growth, prioritizing disciplined investment in network excellence and improved customer experience to reduce churn rather than relying on price-led growth. We believe Verizon's continued investment in its network supports its ability to sustain its brand reputation and premium positioning over the long term. Verizon has raised its 2026 guidance, authorized a $25 billion share buyback program over the next three years, and recommitted to furthering its 20 consecutive years of annual dividend increases. While the company remains in the early stages of its transformation, we believe these actions, consistent with our catalysts of improving capital discipline and a more rational competitive environment, should support stronger long-term returns.

BSD Analysis:
The manager presents a bullish transformation story for Verizon under new CEO Dan Schulman, highlighting strong customer growth momentum and strategic repositioning. The investment thesis centers on the company's shift from price-led to value-driven growth, emphasizing network excellence and customer experience to reduce churn. The $20 billion Frontier acquisition significantly expands Verizon's fiber footprint to 30 million locations, providing a foundation for sustainable growth. Key catalysts include improved capital discipline, raised 2026 guidance, and a substantial $25 billion share buyback program over three years. The manager views Verizon as being at a critical inflection point where operational improvements and strategic focus should drive superior returns. The company's commitment to maintaining its 20-year dividend growth streak provides additional income appeal while the transformation unfolds.

Pitch Summary:
TotalEnergies, one of the world's largest energy companies, was the top contributor for the quarter. While oil prices increased during the period, driven by geopolitical tensions in the Middle East and disruptions to supply through the Strait of Hormuz, our focus remains on the company's underlying operational execution across its diversified energy platform. As the fourth-largest major energy player in the world, the company operates across upstream, downstream, liquefied natural gas (LNG), and integrated power and renewable energy businesses. Within its upstream segment, TotalEnergies continues to deliver accretive growth, with new projects generating higher cash flow per barrel than its legacy portfolio, supporting both production growth and improving profitability. In the LNG segment, the company has started production in Angola, which will supply Europe and Asia with roughly 2 million tons of LNG per year, and has also signed an agreement with Glenfarne, the lead developer of the Alaska LNG project, to offtake 2 million tons of LNG annually for the next 20 years. We view LNG as a key structural driver of long-term growth, particularly given increasing demand for energy security in Asia and Europe. Lastly, within renewables, TotalEnergies and Masdar, an Abu Dhabi clean energy leader, formed a joint venture to accelerate renewable energy growth through onshore solar, wind and battery storage projects across Asia. In the U.S., the company has signed a long-term Power Purchase Agreement to provide 1 GW of solar capacity to power Google's data centers in Texas for 15 years. These initiatives reflect the company's strategy to build a more diversified and resilient energy platform over time. Overall, we believe TotalEnergies' combination of disciplined capital allocation, low-cost operations and integrated business model positions it to generate attractive FREE cash flow across commodity cycles, with recent operational progress reinforcing its long-term investment case.

BSD Analysis:
The manager presents a compelling bull case for TotalEnergies based on operational excellence and strategic diversification across the energy value chain. The thesis centers on the company's ability to generate superior cash flows through new upstream projects that outperform legacy assets, while building meaningful exposure to structural growth drivers like LNG and renewables. Key catalysts include Angola LNG production ramping up and the 20-year Alaska LNG offtake agreement, which provide long-term cash flow visibility in a high-demand market. The renewable energy joint venture with Masdar and Google data center partnership demonstrate strategic positioning for the energy transition. The manager emphasizes TotalEnergies' integrated business model and disciplined capital allocation as competitive advantages that should drive consistent free cash flow generation across commodity cycles, making it an attractive energy play in the current environment.

Pitch Summary:
Headquartered in Hong Kong, Techtronic Industries (TTI) is a global manufacturer of power tools, outdoor power equipment and related accessories. The company operates primarily through two flagship brands: Milwaukee, which serves professional tradespeople, and Ryobi, which targets the DIY and light professional market (including handymen and maintenance professionals whose needs fall between homeowners and full-time trades). Over the past decade, TTI has transformed itself into one of the leading players in the global power tool industry, driven by sustained innovation and disciplined brand investment. Milwaukee has been the primary growth engine, expanding from approximately $450 million in sales in the early 2000s to roughly $10 billion today. The brand has gained meaningful share in professional trades through a focus on productivity, safety and battery-powered innovation. Ryobi remains a leading DIY platform, supported by a long-standing distribution relationship with Home Depot, TTI's largest retail partner. TTI continues to benefit from the long-term industry transition from corded, gas-powered and pneumatic tools toward battery-powered platforms. The company's strategy of maintaining backward compatibility across battery generations has reinforced customer loyalty and created a durable installed base across both Milwaukee and Ryobi ecosystems. Some of the quality characteristics we have identified for TTI include: Leading positions in professional and DIY power tools through the Milwaukee and Ryobi brands, supported by strong brand equity, deep engagement with professional tradespeople and a track record of consistent product innovation; A powerful battery ecosystem strategy, with over 110 million M18 and 65 million M12 batteries in circulation and backward and forward compatibility across generations, creating switching costs and repeat purchases across hundreds of compatible tools; Ongoing investment in research and development, enabling consistent product innovation, market share gains and expansion into adjacent product categories; Deep retail partnerships, particularly with Home Depot, reinforced by dedicated in-store sales representation and merchandising support. We believe shares are attractively valued relative to our estimate of intrinsic value. Our analysis reflects the growing contribution of the Milwaukee franchise, which now represents the majority of operating profit, and the benefits of continued shift toward professional products, as well as stabilization of underperforming segments. In addition, as recent investment spending normalizes, we expect FREE cash flow to increase to levels that we believe are not fully reflected in the current share price. Catalysts we have identified for TTI, which we believe will cause its stock price to appreciate over our three-to-five-year investment horizon, include: Continued shift toward the higher-margin Milwaukee brand, which has grown from 18% of total sales in 2010 to approximately two-thirds today; Geographic expansion of the Milwaukee brand outside the U.S., where market share remains below North American levels, and introduction of the Ryobi platform into additional markets such as Latin America and Australia; Expansion into adjacent professional categories, including personal protective equipment and modular tool storage systems, thereby increasing wallet share within the professional customer base; Improvement in operating profitability through turnaround of underperforming segments and greater cost discipline.

BSD Analysis:
The manager presents a comprehensive bull case for Techtronic Industries based on its transformation into a leading global power tool manufacturer through strategic brand development and innovation. The investment thesis centers on Milwaukee's remarkable growth from $450 million to $10 billion in sales, demonstrating the brand's successful penetration of professional markets through productivity and safety innovations. The battery ecosystem strategy creates significant competitive advantages with over 175 million batteries in circulation and backward compatibility driving customer loyalty and repeat purchases. Key catalysts include continued premiumization as Milwaukee grows from 18% to two-thirds of sales, international expansion opportunities where Milwaukee's market share lags North America, and adjacent category expansion into protective equipment and storage systems. The manager views shares as attractively valued given Milwaukee's growing profit contribution and expects free cash flow to increase as investment spending normalizes. The thesis emphasizes TTI's quality characteristics including strong brand equity, R&D capabilities, and deep retail partnerships, particularly with Home Depot.

Pitch Summary:
Brookfield, one of the world's largest and most diversified real asset investors and alternative asset managers, was a detractor for the quarter. Shares of alternative asset managers came under pressure during the period, driven in part by investor concerns around private credit and less-liquid strategies. We believe these concerns are less applicable to Brookfield given the breadth of its platform and its focus on real assets, including infrastructure, renewable power and real estate, rather than any concentrated exposure to a single strategy. The company continues to execute on several key initiatives, including scaling its insurance platform, which provides a growing source of permanent capital to support its investment activities. It is also seeing improving performance in its real estate portfolio, where underlying fundamentals remain strong, with high occupancy levels and positive leasing spreads across its portfolio of large-scale, well-located properties. In addition, Brookfield is building a pipeline of asset sales supported by ongoing development and repositioning of assets, with monetization activity expected to increase as capital markets continue to normalize. Looking at Brookfield from a long-term perspective, the company benefits from its scale, access to capital and disciplined investment approach, which we believe will allow it to continue to deploy capital opportunistically and generate attractive returns across cycles.

BSD Analysis:
The manager maintains a long-term bull thesis on Brookfield despite near-term sector headwinds affecting alternative asset managers. The investment case differentiates Brookfield from peers through its focus on real assets rather than concentrated exposure to private credit or illiquid strategies that are currently under pressure. Key growth drivers include the scaling insurance platform providing permanent capital, improving real estate fundamentals with high occupancy and positive leasing spreads, and a building pipeline of asset sales as capital markets normalize. The manager emphasizes Brookfield's competitive advantages including global scale, superior capital access, and disciplined investment approach that enables opportunistic capital deployment across market cycles. The thesis views current sector concerns as less applicable to Brookfield's diversified real asset platform spanning infrastructure, renewable power, and real estate. The manager expects the company to continue generating attractive returns through its proven ability to develop, reposition, and monetize assets over time.

Pitch Summary:
MonotaRO, the Japanese business-to-business (B2B) e-commerce platform, was the largest detractor during the quarter. While results remained strong, the stock price was pressured by softer order trends in the enterprise business and a moderation in new customer additions following a period of unusually strong growth. Sentiment was also pressured by the company's exposure to small and medium-sized enterprises in manufacturing and construction, cyclical and cost-sensitive end markets, particularly amid elevated input costs. Despite these near-term headwinds, profitability remained stable, with margin expansion supported by procurement efficiencies, reduced promotional discounting and higher royalty income. Enterprise business also grew more than 20% through newly connected corporations, expanding to approximately one-third of sales, highlighting its increasing importance within the business and reinforcing a key catalyst we originally identified. Management also announced a ¥10 billion share repurchase program, supporting shareholder returns and reflecting continued discipline in capital allocation. Over the longer term, we believe MonotaRO remains well positioned to continue gaining share in Japan's fragmented and underpenetrated maintenance, repair and operations (MRO) market. The company's broad assortment, operating scale and growing enterprise presence, in our view, support a business that is becoming more embedded in customer procurement workflows over time.

BSD Analysis:
Despite near-term headwinds, the manager maintains a constructive long-term view on MonotaRO's market position and growth prospects. The thesis acknowledges cyclical pressures from exposure to cost-sensitive SMEs in manufacturing and construction, but emphasizes the company's structural advantages in Japan's fragmented MRO market. Key positive developments include stable profitability with margin expansion driven by operational efficiencies and reduced promotional spending. The enterprise segment's 20% growth and expansion to one-third of sales validates the manager's original investment catalyst and demonstrates MonotaRO's ability to penetrate larger corporate accounts. The ¥10 billion share buyback program reflects disciplined capital allocation and management confidence. The manager believes MonotaRO's broad product assortment, operational scale, and increasing enterprise penetration create a defensible competitive position that will drive market share gains as the business becomes more embedded in customer procurement processes over time.

Pitch Summary:
Otsuka Holdings, a leading Japanese healthcare company, was also a top contributor to performance during the quarter. We have long admired the company's robust and diversified product portfolio, which we believe is well positioned to gain market share in various applications such as depression, schizophrenia and oncology. As awareness of major depressive disorders has continued to increase, Otsuka's leading products, including Rexulti and Abilify Maintena, have exhibited strong prescription growth. In oncology, the heightened attention around colorectal cancer, which has spiked in adults under 55, has led to gains for the company's leading cancer drug, Lonsurf. Furthermore, the company continues to invest in its "Next 8" pipeline, which complements its existing portfolio and supports its next phase of growth. Management has also continued to invest in external innovation, as demonstrated by its recently announced agreement to acquire Transcend Therapeutics, which strengthens its position in psychiatric and neurological disorders, including adding a late-stage candidate targeting post-traumatic stress disorder (PTSD). As the company continues to reinvest in innovation while simultaneously returning value to shareholders, as exemplified by its most recent ¥50 billion share buyback program, we remain confident that Otsuka will continue to deliver attractive long-term returns over time.

BSD Analysis:
The manager maintains a strong bull thesis on Otsuka Holdings driven by the company's diversified pharmaceutical portfolio and strategic positioning in high-growth therapeutic areas. The investment case is anchored by strong prescription growth in mental health drugs Rexulti and Abilify Maintena, benefiting from increased awareness of major depressive disorders. The oncology franchise, particularly Lonsurf for colorectal cancer, is capturing market share as cancer rates rise in younger demographics. The "Next 8" pipeline represents a significant growth catalyst, while the Transcend Therapeutics acquisition adds late-stage PTSD assets to strengthen the psychiatric portfolio. Management's balanced capital allocation approach, combining R&D investment with a ¥50 billion share buyback program, demonstrates commitment to both growth and shareholder returns. The manager views Otsuka as well-positioned to deliver sustained long-term performance through its innovation-driven strategy and market leadership in key therapeutic areas.

Pitch Summary:
TotalEnergies, one of the world's largest energy companies, was a primary contributor for the quarter. While oil prices increased during the period, driven by geopolitical tensions in the Middle East and disruptions to supply through the Strait of Hormuz, our focus remains on the company's underlying operational execution across its diversified energy platform. As the fourth-largest major energy player in the world, the company operates across upstream, downstream, liquefied natural gas (LNG), and integrated power and renewable energy businesses. Within its upstream segment, TotalEnergies continues to deliver accretive growth, with new projects generating higher cash flow per barrel than its legacy portfolio, supporting both production growth and improving profitability. In the LNG segment, the company has started production in Angola, which will supply Europe and Asia with roughly 2 million tons of LNG per year, and has also signed an agreement with Glenfarne, the lead developer of the Alaska LNG project, to offtake 2 million tons of LNG annually for the next 20 years. We view LNG as a key structural driver of long-term growth, particularly given increasing demand for energy security in Asia and Europe. Lastly, within renewables, TotalEnergies and Masdar, an Abu Dhabi clean energy leader, formed a joint venture to accelerate renewable energy growth through onshore solar, wind and battery storage projects across Asia. In the U.S., the company has signed a long-term Power Purchase Agreement to provide 1 gigawatt (GW) of solar capacity to power Google's data centers in Texas for 15 years. These initiatives reflect the company's strategy to build a more diversified and resilient energy platform over time. Overall, we believe TotalEnergies' combination of disciplined capital allocation, low-cost operations and integrated business model positions it to generate attractive FREE cash flow across commodity cycles, with recent operational progress reinforcing its long-term investment case.

BSD Analysis:
The manager presents a compelling bull case for TotalEnergies based on operational excellence and strategic diversification across the energy value chain. The thesis centers on the company's ability to generate superior cash flows through new upstream projects that outperform legacy assets, while simultaneously building growth drivers in LNG and renewables. Key catalysts include the Angola LNG project supplying 2 million tons annually and a 20-year Alaska LNG offtake agreement, positioning the company to benefit from growing energy security demands in Asia and Europe. The renewable energy expansion through partnerships with Masdar and Google demonstrates strategic positioning for the energy transition. The manager emphasizes TotalEnergies' integrated business model and disciplined capital allocation as competitive advantages that should drive consistent free cash flow generation across commodity cycles. This diversified approach reduces dependence on oil price volatility while capturing growth in transitional energy markets.

Pitch Summary:
Envista Holdings is a global manufacturer and marketer of dental consumables, equipment, diagnostics, orthodontic solutions and treatment technologies, offering a comprehensive portfolio that includes implants, imaging systems, treatment software and aligners. Dental care represents a structurally attractive, non-discretionary end market, supported by aging demographics, increasing oral health awareness, and sustained demand for restorative and aesthetic procedures. Through its broad product portfolio and service capabilities, the company offers exposure to a growing, recurring revenue dental market, with meaningful margin recovery potential as management executes on operational initiatives, at an attractive valuation.

BSD Analysis:
The fund initiated a new position in Envista Holdings, attracted by the company's comprehensive exposure to the dental care market through its diversified product portfolio. The investment thesis is built on the structural attractiveness of the dental care industry, characterized by non-discretionary demand and favorable demographic trends. The manager highlights aging demographics and increasing oral health awareness as key growth drivers supporting sustained demand for both restorative and aesthetic dental procedures. Envista's broad product portfolio spanning consumables, equipment, diagnostics, and orthodontic solutions provides multiple revenue streams and recurring revenue characteristics. The fund emphasizes the company's margin recovery potential as management executes operational improvement initiatives. The manager views the current valuation as attractive relative to the company's growth prospects and market position. This investment reflects the fund's strategy of identifying healthcare companies with defensive end markets and operational improvement opportunities.

Pitch Summary:
Casella Waste Systems is a provider of solid waste management and recycling services. The company offers exposure to a resilient, recurring revenue waste management business operating in capacity constrained Northeast markets, where owned landfill and transfer assets create high barriers to entry and support pricing power. The company's vertically integrated footprint and disciplined tuck in acquisition strategy enhance route density and cost synergies, supporting steady margin improvement, while stable contracted volumes and favorable long-term industry dynamics underpin a clear path to further margin expansion and long-term capital appreciation.

BSD Analysis:
The fund initiated a new position in Casella Waste Systems, viewing it as an attractive defensive growth opportunity in the waste management sector. The investment thesis centers on the company's strong competitive positioning in capacity-constrained Northeast markets, where owned landfill and transfer assets create significant barriers to entry. The manager emphasizes the resilient, recurring revenue nature of the waste management business model. Casella's vertically integrated operations and disciplined acquisition strategy are highlighted as key drivers of operational efficiency and margin expansion. The fund views the company's route density optimization and cost synergies as sustainable competitive advantages. The stable contracted volume base and favorable industry dynamics provide visibility into future cash flow generation. This positioning reflects the fund's preference for businesses with defensive characteristics, pricing power, and clear paths to margin improvement in essential service industries.

Pitch Summary:
Huron Consulting Group is a provider of technology, data, and analytics solutions to healthcare, education and corporate clients. The company reported strong results and handily beat analyst expectations. Despite that, shares sold off amid market sentiment around AI potentially cannibalizing their business model, which we believe is overly pessimistic. We maintain a position, as we believe the company may continue to benefit from durable demand, expanding margins, and secular growth tied to digital and regulatory complexity in their end markets over the long term.

BSD Analysis:
The fund maintains a contrarian bullish stance on Huron Consulting Group despite recent market concerns about AI disruption. The manager views the market's pessimism regarding AI's potential impact on the consulting business model as overdone. The investment thesis is anchored on Huron's strong fundamental performance, with the company beating analyst expectations and delivering robust results. The fund emphasizes the company's exposure to durable demand drivers, including expanding margins and secular growth opportunities. The manager highlights digital and regulatory complexity in healthcare, education, and corporate markets as long-term growth catalysts. The fund's decision to maintain the position despite market volatility demonstrates conviction in the company's defensive characteristics and growth prospects. This positioning suggests the manager views Huron as benefiting from, rather than being disrupted by, technological advancement.

Pitch Summary:
Ciena is an optical networking equipment manufacturer for telecommunications and web-scale network operators. The stock benefited from expectations for an eventual optical networking recovery, driven by accelerating data consumption, AI-related traffic growth, and the company's leadership in high-speed coherent optical solutions and software driven networking. We believe the company has benefitted from strong demand for bandwidth given its differentiated product portfolio and history of technological innovation, which has produced strong operating results and shareholder value creation.

BSD Analysis:
The fund expresses a bullish view on Ciena, emphasizing the company's leadership position in optical networking equipment for telecommunications and web-scale operators. The investment thesis is built around the anticipated recovery in optical networking driven by accelerating data consumption and AI-related traffic growth. The manager highlights Ciena's competitive advantages, including its leadership in high-speed coherent optical solutions and software-driven networking capabilities. The company's differentiated product portfolio and history of technological innovation are cited as key drivers of strong operating performance. The fund views Ciena as well-positioned to benefit from the structural increase in bandwidth demand. However, the manager also notes that the position was sold during the quarter to redeploy capital to opportunities with better risk/reward potential, suggesting some profit-taking after appreciation.