Investment Pitches

Pitch Summary:
ENDI’s share price rose to $17.50 at the end of the third quarter, up from $11.43 at the start of the year. The company is essentially composed of two primary components: Its CrossingBridge asset management subsidiary, and a portfolio of cash and investments. CrossingBridge continues to perform exceptionally well. Assets under management grew to $4.2 billion at the end of the third quarter, up from $3.4 billion at the beginning of the year. Over the past twelve months, EBITDA totaled $9.2 million, with $3 million generated in the most recent quarter alone. On the balance sheet, ENDI holds approximately $53 million in cash and investments and $10 million in debt. At the current share price, ENDI’s market capitalization is about $95 million. Adjusting for net cash and investments and applying a forward annualized EBITDA run rate, the implied EBITDA multiple is roughly 4x. As you know, ENDI remains a highly concentrated position for us, though it now represents a smaller allocation than earlier in the year. I’m comfortable with this exposure for several reasons: • My direct involvement as a board member, • The company’s clear undervaluation, and • Its built-in diversification at the corporate level. On that last point, a look-through analysis shows that, at the end of ENDI’s most recent publicly reported quarter, it was as if Arquitos held roughly 38% of its portfolio in cash and highly liquid short-term investments, a meaningful buffer that reduces overall portfolio risk.

BSD Analysis:
The thesis is straightforward value: a cash-rich holdco with a growing, profitable asset-manager (AUM +24% YTD; TTM EBITDA $9.2M) trading near ~4x look-through EBITDA after net cash. Capital-light economics at CrossingBridge can compound as AUM scales, while balance-sheet liquidity (~$53M vs. $10M debt) provides downside protection and optionality. Key drivers are fee growth, margin expansion, and capital allocation (buybacks/specials or acquisitions). Governance alignment (PM on board) is a positive but concentrate risk warrants sizing discipline.

Pitch Summary:
Liquidia’s share price rose to $22.74 at the end of the third quarter, up from $11.76 at the start of the year. Our exposure is primarily through long-dated call options, reflecting my conviction in the company’s long-term potential. In May, Liquidia received FDA approval for its flagship product, Yutrepia, an inhaled formulation of generic treprostinil used to treat Pulmonary Arterial Hypertension (PAH) and Pulmonary Hypertension associated with Interstitial Lung Disease (PH-ILD). Yutrepia utilizes Liquidia’s patented PRINT® production technology, which creates precise, uniform drug particles. Clinical studies and now real-world experience show that PRINT improves treatment efficacy by delivering treprostinil more effectively to the deep lung with less patient effort and fewer side effects. Yutrepia’s commercial launch has been exceptional. FDA approval came in late May 2025, and Liquidia’s Q2 2025 corporate update reported more than 900 unique patient prescriptions and more than 550 patient starts within the first 11 weeks. CEO Roger Jeffs, who has previously stated that he believes Liquidia could capture 80% to 90% of the market, said that “initial demand has exceeded even [his] own high expectations.” My own channel checks, corroborated by other investment managers, suggest that Yutrepia’s launch has significantly outpaced sell-side analyst forecasts. At this stage, there is little for us to do but wait for the official data to validate what we are already seeing in the field. Despite this progress, Liquidia shares remain mispriced. The disconnect stems from two factors: 1. Overly conservative patient adoption estimates from sell-side analysts 2. Uncertainty surrounding ongoing litigation with United Therapeutics over the ‘327 patent The next month should be particularly interesting for Liquidia’s share price as the company has several corporate updates scheduled, including their Q3 report. I also expect a ruling in the ‘327 case shortly. Regarding the ‘327 patent dispute, the outcome will affect only Yutrepia’s PH-ILD indication, not its PAH sales. The most likely scenario is a complete win for Liquidia. Other potential outcomes include a modification to Yutrepia’s label or a royalty arrangement. While a favorable verdict is expected, and the judge already denied United Therapeutics’ attempts to block the PH-ILD launch at the preliminary injunction stage, legal outcomes are inherently unpredictable. Back in early 2024, I estimated a bull case of $100 per share and a base case of $75 per share by 2027. I continue to stand by those targets. Once the litigation is resolved and patient data are publicly confirmed, the door opens further for potential M&A activity.

BSD Analysis:
The manager’s case hangs on rapid Yutrepia uptake (900+ Rx / 550+ starts in 11 weeks) and favorable IP resolution—both tangible catalysts. With PRINT® enabling better lung deposition and tolerability, share capture against legacy nebulized treprostinil is plausible. Near term, Q3 data and the ‘327 verdict should reset sell-side adoption curves; downside is cushioned by PAH sales being unaffected by PH-ILD label risk. Valuation could inflect quickly if royalties or label tweaks replace injunction risk, and optionality includes strategic interest once litigation clears. Focus on gross-to-net dynamics and manufacturing scale as volumes ramp.

Pitch Summary:
ASML also performed strongly, supported by its continued dominance in advanced lithography and solid operational execution. Rising demand for AI-related chips is pressuring customers to push into more advanced nodes and adopt EUV technology, where ASML has an effective monopoly. While the macro and geopolitical uncertainty has weighed on the shares in the past year, ASML's ability to monetize both new system shipments and its installed base, underpinned by long lead times and high technical barriers to entry, is why it remains a core holding.

BSD Analysis:
ASML’s EUV monopoly and long backlog provide structural visibility through AI demand cycles. Installed base services and incremental upgrades sustain recurring revenue. Valuation remains justified by earnings growth, high returns on capital, and unmatched technical moat.

Pitch Summary:
TSMC, the world's leading semiconductor foundry, performed strongly as demand for advanced chips powering artificial intelligence (AI) and high-performance computing drove growth. The company reported impressive second-quarter results, with revenue up nearly 40 per cent year on year and margins above 58%, underscoring its scale and pricing power. Progress on next-generation nodes and global fab expansion also impressed. With unrivalled technology leadership and a central role in enabling the AI era, TSMC remains exceptionally well-positioned for long-term growth.

BSD Analysis:
TSMC remains the cornerstone of the AI hardware stack. Capacity expansion at advanced nodes (3nm, 2nm) and cost leadership ensure durable margin advantage. Global fab diversification enhances geopolitical resilience. With 20–25% earnings CAGR visibility, valuation remains reasonable.

Pitch Summary:
Shopify reinforced its position as the operating system for modern commerce, with results showing broad-based growth and particularly strong momentum in Europe, where GMV rose over 40 per cent last quarter. This acceleration highlights the portability of its model beyond North America and the strength of its global value proposition. Larger brands are increasingly adopting Shopify's modular components, while smaller merchants benefit from its integrated stack that lowers friction and boosts conversion. By unifying online and offline channels through point-of-sale, Shopify is building a compounding ecosystem where scale, efficiency, and an expanding footprint reinforce one another, making it even harder to dislodge as merchants grow.

BSD Analysis:
Shopify’s international expansion and enterprise traction reinforce network effects. ARPU growth, margin leverage, and new vertical integration (logistics, POS) underpin compounding earnings power. With GMV and merchant solutions scaling, valuation offers asymmetric upside for long-term investors.

Pitch Summary:
Adyen, the global payments platform, has been held in the Fund since early 2020. Its low-cost single software stack enables merchants to accept transactions across online, mobile, and in-store channels. Adyen reported good first-half results; however, cautious guidance amid macro headwinds from new U.S tariffs and import rule changes weighed on near-term sentiment. While revenue growth of 20 per cent year-over-year was a little softer than market expectations, the results highlighted resilient profitability and cash generation alongside continued customer growth. We believe Adyen's market position and the counter-cyclical investments it has made will allow it to capitalize on future growth opportunities and underpin a compelling long-term growth case.

BSD Analysis:
Adyen’s unified commerce platform remains a high-quality compounder with expanding merchant adoption and superior margin profile. Short-term macro drag masks robust secular tailwinds from digital payment penetration and global e-commerce. With EBITDA margins >50% and net cash balance sheet, long-term earnings growth of 20%+ is sustainable.

Pitch Summary:
Spotify's shift from pure user growth to disciplined monetization is increasingly evident. With nearly 700 million monthly active users and generating €700 million in free cash flow last quarter, the platform is demonstrating improving economics with scale while investing in podcasts and audiobooks to broaden revenue streams. Personalization remains its core strength, driving engagement, pricing power, and a more efficient flywheel that benefits creators, users and Spotify alike. Despite strong user and subscriber growth, Spotify's shares were weaker this quarter on softer short-term profit guidance. Our recent meeting with Spotify management underscored our conviction in the company's ability to sustain margin expansion and compound value over the long term.

BSD Analysis:
Spotify’s economics are inflecting as ARPU growth and advertising monetization scale. Gross margin expansion from content leverage and AI-driven personalization improves operating efficiency. With accelerating FCF and a growing user base, valuation remains compelling for a long-duration compounding story.

Pitch Summary:
Leading emerging market consumer internet companies like MercadoLibre illustrate the scale of the opportunity to digitize consumption. The Latin American e-commerce and financial technology platform remains one of the largest positions in the Fund. While it detracted from performance during the quarter, it remains one of the leading contributors to performance over the last five years. Revenues continue to grow strongly as its decision to deepen free-shipping incentives in Brazil boosted gross merchandise volume (GMV). However, this squeezed margins, which weighed on the shares. We've seen this playbook before: near-term trade-offs that consolidate share, reinforce loyalty and ultimately strengthen the franchise to create long-term value.

BSD Analysis:
MercadoLibre continues to dominate Latin American e-commerce and fintech with accelerating GMV and resilient credit operations. Margin compression from shipping incentives is temporary; network effects and brand loyalty drive durable market share. With 20–25% revenue CAGR and improving operating leverage expected into 2026, the stock remains a high-conviction growth compounder.

Pitch Summary:
James Fisher, a 175-year-old engineering services company, operates across 18 countries serving energy, renewables, and defense sectors. FY2024 sales were £438m, EBITDA £51m, EBIT £29.5m, and ROCE 8.2%. The company became over-leveraged due to poor acquisitions, but new leadership has restructured into three divisions, disposed of £56m in assets, and aims for margin recovery to 10% and ROCE of 15%. Current valuation (~4.5× EBITDA, 0.6× EV/Sales) implies over 200% upside to normalized 10× EBITDA. :contentReference[oaicite:2]{index=2}

BSD Analysis:
Fisher’s balance sheet repair and managerial reset mark an inflection point. Margin normalization and asset sales underpin rerating potential. Exposure to defense and renewables adds resilience.

Pitch Summary:
Flowtech Fluidpower operates across 16 locations with 500+ employees and 75,000 products in stock. FY2024 sales were £112m with a gross margin of 38.2%, EBITDA of £15.9m, and net debt of £15m. The company’s operating margin remains low (2.5%) but has a target of mid-teens as operational and digital restructuring programs complete. Chairman Roger McDowell and CEO Mike England are executing a transformation plan, aiming for EBITDA >£18m and EV/Sales re-rating to 1.3× from 0.5×. With Harwood and affiliates owning ~30%, the firm has strong shareholder alignment. :contentReference[oaicite:1]{index=1}

BSD Analysis:
Flowtech’s operational overhaul and leadership upgrade provide a clear path to margin recovery. Improved digital systems, deleveraging, and consolidation opportunities could triple equity value. Its small-cap valuation gap and insider ownership create asymmetric upside.

Pitch Summary:
Vanquis Banking, formerly Provident Financial, serves approximately 1.7 million customers and holds a 15% share of the UK non-prime credit market. The company’s turnaround is led by a new management team addressing legacy cost structures, accounting provisions, and complaints-related expenses. With Tier 1 capital at 18.8%, deposits of £2.4bn, and a NIM of 18.4%, the bank is well-capitalized. The management has targeted £60m in cost reductions (upgraded by £15m, with a further £20m expected by 2026) and projects ROTE to recover to “mid-teens” by 2027. The shares trade at 0.5× book value with a 10%+ dividend yield, implying more than 100% upside as profitability normalizes. :contentReference[oaicite:0]{index=0}

BSD Analysis:
Vanquis represents a classic deep-value turnaround. With new leadership, structural cost cuts, and high-margin lending to underserved consumers, earnings normalization could drive a rerating to 1× P/B. Deposit funding and regulatory capital strength reduce tail risk. Execution and liability management remain key catalysts.

Pitch Summary:
LKQ underperformed in the third quarter as the North American collision repair market failed to stabilize. The company faced weaker volumes amid inflation-driven repair cost increases and slower vehicle miles traveled. RS Value Team exited the position, citing persistent industry headwinds and the impact of new tariffs on imported parts.

BSD Analysis:
Despite its market-leading distribution scale, LKQ’s exposure to cyclical insurance and repair dynamics limits near-term upside. Inflationary pressures on repair costs and tariffs on imported parts raise uncertainty around margins. Management’s discipline and cost control may cushion downside, but without clear volume recovery, risk-adjusted returns appear constrained. The exit reflects a prudent reallocation toward higher-quality names with visible catalysts.

Pitch Summary:
Valero Energy produced strong returns in the third quarter as it optimized operations and benefited from U.S. natural gas cost advantages. The firm’s disciplined capital allocation, focus on return on invested capital (ROIC), and refinery efficiency underpin sustainable free cash flow generation. RS Value Team maintains a positive outlook, citing structural advantages in refining economics and shareholder-friendly capital policies.

BSD Analysis:
Valero’s integration of renewable diesel production and low-cost feedstock access supports competitive margin expansion. U.S. natural gas provides a durable cost edge versus international refiners, and the closure of high-cost capacity globally further boosts profitability. With $11B+ annual FCF and a shareholder return yield exceeding 10%, the company remains a value leader in energy. Its focus on decarbonization via renewable fuels enhances ESG positioning while sustaining attractive returns.

Pitch Summary:
Elevance Health shares rose as investors reassessed the sector’s outlook following UnitedHealth’s regulatory issues. The company’s disciplined pricing, net cash balance sheet, and integrated PBM model (Carelon) underpin strong execution. Management expects EPS to normalize toward $34–$40 per share as Medicare margins recover in 2026. :contentReference[oaicite:9]{index=9}

BSD Analysis:
Elevance’s conservative underwriting, integrated PBM, and capital-light business model create sustainable competitive advantages. Industry repricing in Medicare and Medicaid should restore profitability and catalyze EPS recovery. With double-digit ROIC, steady buybacks, and potential market share gains from UNH, ELV offers a defensive growth compounder profile with 30–40% upside over the medium term.

Pitch Summary:
ODFL was added as a new position, reflecting confidence in its dominant market share and superior profitability within the LTL trucking industry. With 20% operating margins and a net cash balance sheet, ODFL’s pricing power and reinvestment discipline provide a sustainable advantage. Management’s strategy of investing through cycles has solidified its moat and earnings consistency. :contentReference[oaicite:8]{index=8}

BSD Analysis:
ODFL’s disciplined reinvestment model, asset network density, and pricing premium drive enduring shareholder value. Its ability to invest countercyclically reinforces market leadership, while scale efficiencies enhance ROIC. As the freight cycle recovers, operating leverage and share gains should fuel compounding earnings and robust FCF generation.

Pitch Summary:
Alphabet’s stock gained 41% as its Gemini AI app surpassed ChatGPT in downloads and its Tensor Processing Chips became a credible alternative to NVIDIA GPUs in data centers. The company’s diversified AI ecosystem and ad growth underpin accelerating revenue and profit expansion. :contentReference[oaicite:7]{index=7}

BSD Analysis:
Alphabet’s vertical integration in AI infrastructure—from chips to cloud and consumer apps—creates unmatched synergy. Its expanding hardware footprint, scalable models, and cost discipline position it as both an AI platform and productivity enabler. Strong FCF, advertising resilience, and cloud profitability sustain long-term double-digit compounding.

Pitch Summary:
Micron surged 36% in Q3, extending its year-to-date gains to 99%. Investors increasingly recognize Micron’s dominant position in supplying high-bandwidth memory (HBM) chips critical for AI computing. Stronger pricing and capacity expansion underpin robust profit momentum, with AI demand driving multi-year growth visibility. :contentReference[oaicite:6]{index=6}

BSD Analysis:
Micron’s HBM leadership and exposure to AI-driven workloads position it as a cyclical compounder. Its balance sheet strength, capacity investment, and improving pricing environment suggest operating leverage into FY26. As AI inference adoption broadens, Micron’s normalized earnings could exceed prior peaks, supporting rerating potential.

Pitch Summary:
Our Payments Technology basket is composed of businesses with exceptional long-term upside potential. Built on modern technology stacks and led by forward-thinking management teams, these businesses are steadily taking share from legacy incumbents while also benefiting from secular growth in digital transactions and the tailwinds of inflation. We purchased more PayPal and Shift4 at attractive valuations.

BSD Analysis:
Shift4’s differentiated end-to-end payments platform and rapid market share gains in hospitality and e-commerce support long-term compounding. With strong FCF growth, expanding margins, and high-ROI vertical integration, FOUR’s risk/reward remains compelling.

Pitch Summary:
Our Payments Technology basket is composed of businesses with exceptional long-term upside potential. These are enduring investments that should be evaluated over years, not quarters, as their value compounds gradually through innovation and scale. Built on modern technology stacks and led by forward-thinking management teams, these businesses are steadily taking share from legacy incumbents (by helping their customers, both businesses and consumers, operate and transact more efficiently, rapidly, and affordably) while also benefiting from secular growth in digital transactions and the tailwinds of inflation. We purchased more PayPal and Shift4 at attractive valuations.

BSD Analysis:
PayPal’s strategic refocus on core payments, cost discipline, and margin expansion potential underpins long-term upside. While short-term growth has slowed, increasing checkout adoption, Venmo monetization, and efficiency initiatives position the company well. Trading at a discounted P/E with stable FCF generation, PYPL remains a quality compounder in fintech.

Pitch Summary:
Westgold (Long +56%) performed strongly during the quarter as the gold price surged (+17%), driven by widening fiscal deficits, U.S. dollar devaluation, and global rate cuts. Post quarter-end, Westgold released a 3-year outlook projecting production growth from ~325koz in FY25 to ~470koz in FY28, transforming it into a mid-tier producer of scale. The company is upgrading its portfolio, prioritizing scalable operations and increased exploration, which should enhance cost efficiency and earnings resilience.

BSD Analysis:
Westgold’s strong performance this quarter reflects both a supportive macro backdrop for gold and the company’s rapidly improving operational profile. The surge in gold prices, fueled by widening fiscal deficits, a weaker U.S. dollar, and global rate cuts, has materially strengthened cash generation across the sector — and Westgold is one of the more leveraged beneficiaries. Post–quarter-end, the company issued a three-year outlook projecting production rising from roughly 325,000 ounces in FY25 to about 470,000 ounces in FY28, effectively elevating it into the ranks of mid-tier producers. This scale transition matters: larger producers typically enjoy better cost efficiency, steadier margins, and higher investor visibility. Westgold is simultaneously upgrading its asset base, prioritizing operations with meaningful expansion potential and allocating more capital to exploration to extend mine life and improve grade profiles. These initiatives should drive a structurally lower cost curve and enhance earnings resilience even if gold prices normalize. With rising production, improving operational quality, and a favorable macro tailwind, Westgold enters a multi-year period where both volume and price can expand its cash-flow generation.