Investment Pitches

Pitch Summary:
Robertet is a global leader in the production of flavors and fragrances and a near pure-play on the natural ingredients sub-segment. The company supplies premium components to high-end luxury brands such as Hermès, Chanel, and Aesop. Although these inputs represent a small portion of end products' cost of goods sold, they are critical to the consumer experience, defining the signature scent or taste and enabling Robertet to command premium pricing. Many of these scents and flavors underpin popular heritage products, leading to long-lived, recurring revenues. Despite its strong positioning, the stock trades at a discount to our estimate of intrinsic value due to cyclical headwinds and lingering investor overhang, which we believe are temporary. We appreciate Robertet's shareholder-aligned management team and believe their renewed efforts to expand, internationalize, and modernize the business will lead to significant value creation over the long term.

BSD Analysis:
Robertet is a globally respected natural ingredients, flavors, and fragrance supplier with a moat built on sourcing, science, and long-cycle relationships with top CPG and luxury houses. Demand for natural formulations keeps rising, and Robertet sits at the center of that shift. Margins are robust, cash flow is strong, and the family-controlled structure ensures long-term discipline. It doesn’t chase fads — it compounds slowly and consistently. Because it's quiet and private-leaning, institutions overlook it. But the fundamentals are best-in-class. A premium ingredients franchise trading below the quality of its assets.

Pitch Summary:
Kansai Paint is one of the two market leaders in paint and coatings in Japan. The company’s products are used primarily for automobiles, construction, and ships along with bridges and residential housing. We have owned Kansai on and off over the past 15 years. We most recently sold out of the company in early 2024 as the share price reached our estimate of intrinsic value. Since then, the share price has declined more than 20% due to weak auto production and a weak decorative market in India as well as a de-rating of most global paint companies. Since then, management has focused on shifting emphasis to niches within the paint market, such as construction chemicals and wood coating while focusing less on retail. With the shares priced at more attractive levels, we reinitiated a position in the company. After speaking with management, we continue to believe that there is ample opportunity to reduce costs and improve profitability. Additionally, we believe many of the negatives of the Indian decorative market are now priced into the shares. Finally, we think management continues to allocate capital well and plans to return 100% of free cash flow through dividends and share repurchases.

BSD Analysis:
Kansai Paint’s emerging-market footprint — especially India and Africa — continues to deliver outsized growth that masks sluggish domestic Japan. Cost control has improved, FX tailwinds help, and architectural coatings remain a secular expansion story. Leadership changes have tightened execution and improved profitability. Despite this, valuation still reflects the older, slower Kansai. Investors underestimate the power of its EM exposure and strong brand presence. As mix improves and margins expand, Kansai screens as a quiet, regional coatings compounder. Better than its multiple suggests.

Pitch Summary:
JEOL manufactures, develops, and sells a range of scientific and industrial equipment. JEOL’s roots lie in its scientific instruments business, which sells tools like electron microscopes to academic institutions and food, chemical, and semiconductor customers, among others. Building and servicing this equipment requires significant scientific know-how, resulting in high barriers to entry and thus oligopolistic market structures. JEOL subsequently leveraged its electron beam technology to manufacture mask writing equipment, which fulfills an integral step in chip manufacturing that tethers the company to the world’s leading-edge foundries. JEOL services mask writers for years after selling them, creating a recurring revenue stream that helps smooth out the volatility of equipment sales. Additionally, management has intensified its focus on improving profitability in the scientific instruments business, where margins meaningfully lag global peers. In sum, we believe we are buying two good franchises – scientific instruments and mask writers – for the price of one.

BSD Analysis:
JEOL dominates in electron microscopes and analytical instruments, riding multi-sector demand from semiconductors, biotech, materials, and advanced research. The company competes toe-to-toe with global giants but delivers comparable capability at more efficient cost structures. Order books remain strong and margins have been trending upward as mix shifts toward higher-value systems. JEOL’s installed base creates recurring revenue and sticky customer relationships. Investors still price it like a midsized industrial, not a high-value tech instrumentation player. With AI, EV, and materials science accelerating, demand tailwinds strengthen. A Japanese precision-tech gem.

Pitch Summary:
Alten is one of the world’s largest engineering service providers, partnering with companies to help them design, execute, and manage project-based engineering and IT services. Over time, R&D intensity is rising as a percentage of GDP as corporations invest in new technologies and capabilities to differentiate their products, accelerate the speed of product development, and comply with increasing regulation. To help manage this cost, corporations are increasingly outsourcing their R&D spending, making outsourced R&D services a GDP+ growth business through-cycle. Alten is one of a handful of companies in this space that is considered a global tier-1 service provider, which helps them tightly embed with customers in very sticky relationships. The business itself is asset light and very cash generative and is still run by its founder, Simon Azoulay, who we consider a shrewd capital allocator into bolt-on M&A that enhances the company's capabilities, customer list, and geographic reach. Alten’s stock price has contracted recently as the engineering services sector undergoes a cyclical downturn made worse by tariff uncertainty. We expect business fundamentals to eventually recover, driving an improvement in growth, profitability, and valuation, which is at historic lows.

BSD Analysis:
Alten continues to be one of Europe’s most disciplined engineering and IT consulting houses, with rock-solid utilization and a decentralized delivery model that competitors can’t mimic. Demand in aerospace, energy, and digital transformation remains resilient even as macro wobbles. Margins are strong and improving, and the company’s steady stream of bolt-on acquisitions adds capability without diluting returns. Alten doesn’t rely on hype — it wins on execution, cost control, and deep client integration. Investors chronically undervalue the consistency of this machine. As digital and engineering complexity rise, Alten’s relevance only increases. A stealth compounder wearing a technician’s uniform.

Pitch Summary:
Union Pacific is the largest and most profitable Class I railroad in the U.S. We see freight rail as an attractive industry, underpinned by irreplaceable infrastructure, strong pricing power, and minimal risk of technological disruption. The company is led by an exceptional CEO, Jim Vena, who has driven significant cultural and operational improvements. Despite these improvements, the stock has significantly underperformed the market in recent years as macro headwinds and uncertainty related to the proposed merger with Norfolk Southern have distracted investors from an improving long-term outlook. This provided us with the opportunity to purchase UNP at a meaningful discount to our estimate of intrinsic value. We believe the stock is undervalued on a standalone basis, with further potential upside should the merger be approved, as we find the strategic and financial logic of the deal compelling.

BSD Analysis:
Union Pacific is tightening its railroad operations under new leadership, finally showing the margin discipline and service improvements investors have demanded. The network remains a world-class asset with strong pricing power and irreplaceable rights-of-way. Volume softness is temporary; structural industrial demand remains intact. Operating ratio improvements should drive steady EPS compounding. UNP rarely gets cheap, but it rarely disappoints either. A premium railroad with clear self-help catalysts. Stable, durable, and strategically essential.

Pitch Summary:
Targa Resources is a leading midstream natural gas and natural gas liquids (NGL) company. Targa is a part of a group that controls 90% of the fractionation capacity in the largest hub for NGLs in the world, known as Mont Belvieu. Thanks to the region's unique topography and proximity to the Gulf Coast, Targa benefits from meaningful cost advantages and significant barriers to entry. We like that Targa generates approximately 90% of its earnings through multi-year fee-based arrangements with its customer base, which provides protection against oversupply or re-contracting. Uncertainty around Permian oil production growth has recently weighed on the share price. However, in our view, Targa remains well-positioned to grow, even if the Permian slows dramatically. We were happy to purchase shares at a discount to peers based on normalized earnings power and our estimate of intrinsic value.

BSD Analysis:
Targa is one of the best-positioned NGL midstream operators, benefiting directly from Permian volume growth and strong fractionation demand. Margins are expanding, capital discipline is real, and cash flow visibility is excellent. Targa’s integrated footprint is a strategic advantage few peers can claim. Volatility in commodity spreads hits sentiment, but not the long-term story. TRGP has consistently outperformed by simply executing. This is a premier midstream growth story. High-quality, high-consistency operator in a misunderstood segment.

Pitch Summary:
Wise remains the world’s largest dedicated cross-border transfer business, run by its co-founder with the same simple mission: to build the network for the world’s money. Transfers keep getting faster—70% were “instant” last quarter—supported by a steadily improving network of 70+ licences supporting 40+ currencies and seven (soon eight) direct connections to national payment systems. Its consumer NPS of 71 reflects service quality, low transparent fees and a strategy of returning a fair share of interest income to customers rather than maximising margins. Competition from legacy operators and neobanks remains muted, and the firm’s infrastructure economics make replication uneconomic. Platform partners now exceed 100, including major banks such as Itaú, Standard Chartered, Morgan Stanley, and UniCredit. Management targets 10% of volumes from Wise Platform within five years—implying ~50% annualised growth—with long-term potential for platform volumes to surpass direct customer flows.

BSD Analysis:
Wise is scaling from retail fintech to financial infrastructure, leveraging its 70+ regulatory licences and 100+ bank partners. Platform growth could compound volumes at 20%+ annually, boosting margins through operating leverage. Trading around mid-teens EV/EBITDA, Wise offers rare durable growth with network effects and high switching costs. U.S. expansion and banking licence approval are key catalysts; stablecoin disruption remains the main long-term risk.

Pitch Summary:
The primary reason for the rough quarter was a 26.06% decline in the share price of Constellation Software, our second largest holding. From an attribution standpoint, Constellation detracted 3.56% from performance in the quarter. In other words, Constellation accounted for almost the entirety of the Fund’s negative third quarter return. Given the impact on our third quarter results we would like to go into some depth as to why we have owned Constellation Software for more than 11 years and why this latest share price drawdown does not phase us in the least. For context, we first purchased shares of Constellation on June 5, 2014, at a price of $226.06 in U.S. dollars. As of market close on September 30, 2025, those shares were worth $2,751.04 in U.S. dollars. This translates into a 24.97% compound annual rate of return excluding dividends and the shares of Topicus and Lumine that Constellation spun off to its shareholders during the period. On the way to that nearly 25% compound annual rate of return from our first purchase, Constellation experienced share price drawdowns from all-time highs (in Canadian dollars) of approximately 25% on three separate occasions: February 2016, December 2018, and March 2020. This latest drawdown from the recent high has been the sharpest yet during our 11+ year tenure as shareholders: a drop of 29.37% from May 8th to September 26th of this year, the bottom as of this writing. As we wrote in our second quarter letter, long-term compounding in publicly traded equities comes with costs – unpleasant drawdowns among them. For Constellation, we believe there are two primary drivers of the recent drawdown: (1) A growing narrative that vertical market software companies will be disrupted by new “AI-native” competitors using “large language models” such as ChatGPT. (2) The September 25th announcement that Mark Leonard, Constellation’s founder, would step down from the President role immediately due to health reasons. We believe that Constellation has shown the ability to navigate many periods of technological innovation and should be able to protect its market position from competitors who are leveraging large language models. Constellation began in 1995, before the rise of the software-as-a-service business model. For years, shareholders questioned whether the company was moving its products into the cloud quickly enough and whether its measured, customer-driven approach would backfire. Similarly, years before large language models shocked the world with their ability to generate code, the rise of “low-code” tools was supposed to make it easier than ever to create software that could compete with Constellation’s 1,000+ business units. Despite these risks, from 2014 to 2024, Constellation generated positive organic growth, on average, and a compound annual total revenue growth rate (including acquisitions) of approximately 20% over this time period. In our opinion, Constellation achieved this success because of its customer intimacy. On a recent call with shareholders, Mark Leonard described vertical market software as the “distillation of a conversation between a software vendor and a customer that has gone on often for a couple of decades”. Over the course of a couple of decades, Constellation has learned more and more about the software needs of a given niche industry vertical, whether it be country clubs or homebuilders, and has refined its software to better serve those needs. Customers have never relied upon Constellation for the slickest user interfaces or the newest technology. Rather, they view Constellation as a trusted partner who understands the intricacies of their verticals. We believe this intimacy will continue to bolster the company’s prospects in a post-AI world. Additionally, Constellation generally has access to the same commercially available large language models that might be used by so-called “AI-native” competitors and recently disclosed that its business units are experimenting with approximately 15,000 unique models which Constellation can toggle between with just a single line of code. To us, this speaks favorably for Constellation in terms of competitive advantage relative to the purveyors of large language models, though it's the latter that presently dominate the fantasies of AI-investors. The second driver of Constellation’s recent drawdown gives us more pause. Mark Leonard has been an exemplary leader and capital allocator for 30 years. We search for executives who focus on long-term value creation and who treat shareholders as partners, and it is hard to find a better example of an individual who fits this mold. Mark clearly communicated his priorities to shareholders in brilliant letters and stopped taking a salary after leading the company for 20 years because he wanted to have more time for his personal life and saw forgoing cash compensation as a fair tradeoff. He achieved many rare feats, such as canceling quarterly earnings calls with Wall Street analysts, believing they did not add value for long-term shareholders, and convincing his colleagues to leave hurdle rates for acquisitions essentially untouched while scaling the business from a revenue base of a few hundred million dollars to over ten billion. We are saddened to hear the news of Mark’s health issues and wish him a fast recovery. We are incredibly thankful that Mark chose to share so much of his wisdom in public and we have benefited greatly as investors from studying his teachings. In an ideal world, we would prefer that Mark stay at the helm for as long as possible. That said, we think Constellation is uniquely suited to continue to prosper under the next generation of leadership due to its decentralized structure. Think of Constellation as 1,000+ autonomous software companies that will continue to operate autonomously no matter who is sitting in the President’s office. In terms of capital allocation, Mark long ago placed all but the largest M&A decisions in the hands of other managers, realizing this was the only way to acquire over 1,000 companies. Mark’s role in recent years has been to weigh in on only the largest acquisitions and to curate and disseminate best practices relating to operations and acquisitions. From the board seat that he plans to maintain, he may be able to continue with these duties. Additionally, we are optimistic that Mark Miller, Constellation’s Chief Operating Officer who will be replacing Mark Leonard as President, will continue to uphold the foundations that Mark Leonard built. Mark Miller joined Constellation in 1995 when Trapeze Group, a software company he co-founded, was acquired by Constellation in Constellation’s first-ever acquisition. He has played a key role in the long-term value creation that Constellation shareholders have enjoyed. In short, we have no fundamental concerns about Constellation Software or its position size in the portfolio. Even the best compounders experience significant drawdowns in share price. This is the fourth drawdown of approximately 25% or more that we have experienced during our tenure as Constellation Software shareholders, and it will not be the last. Though painful in the short run, we remain steadfast in the name of the long-term compounding we have enjoyed and expect to continue.

BSD Analysis:
Constellation Software continues to demonstrate exceptional long-term value creation through disciplined capital allocation and customer-centric vertical integration. Despite short-term share price volatility and leadership transition, fundamentals remain strong. The company’s decentralized model ensures resilience, supported by 20% compound revenue growth over a decade and recurring software demand in niche markets. While the founder’s departure introduces headline risk, operating continuity under Mark Miller mitigates this. Shares trade at ~26x forward earnings, reasonable for a business compounding FCF per share >20% annually. Management’s consistent reinvestment, disciplined M&A, and growing experimentation with AI models position it for sustainable mid-teens compounding. Key near-term catalysts include normalization post-drawdown and broader investor recognition of its structural moat.

Pitch Summary:
Philippine Seven is the exclusive 7-Eleven master franchisee in the Philippines and dominates the convenience-store channel with ~95% share. The business has suffered from several temporary headwinds including the POGO shutdown, vape regulation, e-wallet outages, and typhoon disruptions—creating a misleading picture of fundamentals. Despite this, SEVN maintains exceptional store economics, daily-delivery logistics density, high ROIC, and strong cash conversion, backed by President Chain Store (Taiwan), one of Asia’s best operators. Convenience-store penetration remains extremely low relative to regional peers, giving SEVN a 10–15x revenue runway as GDP/cap approaches the convenience inflection point (~$5–6k). Competition exists from Alfamart and hard discounters but remains structurally constrained by lower delivery frequency and weaker unit economics. Shares trade at ~13.5x NTM earnings with 15% of the market cap in cash and sentiment toward the Philippines at multi-decade lows. With normalization of comps, continued store rollout, and eventual macro re-rating, SEVN offers venture-like long-term return potential with far lower tail risk.

BSD Analysis:
SEVN’s edge is a logistics and density moat that competitors cannot match in a geography with severe congestion and difficult last-mile access. The market is overweighting temporary operational noise and macro fear while underweighting structural underpenetration and the proven convenience-store compounding model seen in Thailand, Taiwan, Malaysia, and Indonesia. BPO-related AI fears exaggerate downside risk—SEVN’s footprint is geographically diversified, and GDP/cap growth is the true long-term driver of convenience adoption. SEVN’s balance sheet strength, negative working capital, and high ROIC give it resilience and compounding power atypical for EM retail. Alfamart is a threat but remains subscale in DC utilization and weaker in impulse-food mix. Investor positioning in the Philippines is at decade lows, creating asymmetric re-rating potential. The setup is a quintessential “compounder hiding in an EM panic.”

Pitch Summary:
Red Cat’s recent rally rests on overstated expectations for its U.S. Army SRR contract and the debut of its FANG drone, both of which appear far weaker than advertised. FOIA disclosures indicate that the Army contract—touted as exceeding $30–$55 million—is in reality only $12.9 million, undermining management’s FY25 revenue guidance and investor trust. The much-hyped FANG drone, positioned as a proprietary defense-grade platform, has been exposed as a marketing concept built from Chinese-sourced consumer components, raising questions about Red Cat’s technological credibility and compliance readiness. Meanwhile, the company’s claims of NATO traction are misleading, as its drones have been listed in the NATO catalogue since 2023 with minimal commercial results. Together, these findings suggest Red Cat’s “turnaround” story is largely promotional, built on hype rather than contract execution, product differentiation, or verifiable demand. A major guidance miss and reputational damage now appear likely as reality catches up with management’s narrative.

BSD Analysis:
FOIA disclosures indicate the Army SRR low-rate initial production award is roughly $12.9M, far below management’s prior framing (> $30–$55M) and inconsistent with FY25 revenue guidance, implying a looming miss. The SRR program remains competitive rather than sole-sourced, limiting volume visibility and diminishing the probability of clean follow-on awards. Legal filings and marketing materials characterize the new FANG platform as a “marketing concept” with apparent third-party and China-sourced components, elevating supply-chain/ITAR compliance risk and undermining differentiation. Reported non-participation in the August 2025 Army fly-off further questions product readiness and near-term pipeline conversion. NATO catalogue inclusion since 2023 appears to have yielded limited disclosed sales while peers (e.g., Skydio) win meaningful European orders, highlighting execution and credibility gaps. Net-net, the setup points to negative estimate revisions, governance overhang, and multiple compression if procurement outcomes and product milestones fail to materialize.