Investment Pitches

Pitch Summary:
Vertex Pharmaceuticals, founded in 1989, is a global biopharmaceutical company with deep expertise in protein and genetic science and a focus on specialty markets. The company is the leader in creating therapies for patients suffering from cystic fibrosis (CF), with five currently approved CF treatments, and the company is building out its capabilities to address related diseases that lever its core expertise in biology and medicinal chemistry. A fund holding since June 2021, Vertex reported quarterly results that were fundamentally solid but below consensus expectation for revenues and profitability. Sales were negatively impacted by counterfeiting in Russia estimated to lower sales by $100 million in the period. The company paused a trial for CF patients not producing CFTR proteins, but other pipeline programs continue to advance positively. Quarterly revenue of $2.5 billion rose 3% year over year, driven by penetration of Trikafta and early contributions from Alyftrek, its newest CF therapy. Alyftrek, approved in December 2024, improves cell function, requires once-daily dosing, and extends patent protection beyond 2040. New launches like Casgevy (gene therapy for sickle cell) and Journavx (non-opioid pain therapy) are progressing well. Elevated investment compresses margins, but the long-term model remains strong. Vertex’s dominant CF franchise is expected to grow mid-single digits, while pipeline advancements in gene-editing, pain, kidney disease, and type-1 diabetes support low-double-digit revenue growth long term. We believe the shares underestimate the defensibility of the CF portfolio and the long-term value of the pipeline, trading at a significant discount to intrinsic value.

BSD Analysis:
Vertex sits in the enviable position of owning the cystic fibrosis space while building multiple new pillars in gene editing, pain, and metabolic disease. The CF franchise is recurring, high-margin, and still expanding geographically, which funds an aggressive but disciplined R&D budget. Vertex’s culture is unusually focused on de-risked, high-value assets rather than spraying capital across dozens of low-probability projects. The recent gene-editing successes show it can step into new modalities without losing that discipline. The bear case is concentration, but each new approval outside CF chips away at that narrative. Cash on the balance sheet gives it essentially no funding risk. It’s one of the best combinations of growth, profitability, and scientific credibility you can find in large-cap biotech.

Pitch Summary:
Yum China is the largest restaurant company in China, operating over 16,000 restaurants primarily under the KFC and Pizza Hut brands. A fund holding since the fourth quarter of 2016, Yum China reported solid quarterly financial results that were better than expected for same-store-sales growth and restaurant margins and again reflected record net new store openings. Economic conditions remained challenging, with consumers becoming more value-conscious, but the company demonstrated strong operational execution. At KFC, reported system sales rose 3%. Same-store sales were flat as 4% transaction growth was offset by lower ticket prices. The company opened 295 net new KFC units, with cash payback periods of roughly two years. Pizza Hut also saw improving traction, with transaction growth of 17% and strong reception for its value-oriented Wow model. Across both major brands, the company shows continued strong unit growth potential, with penetration still low versus developed markets. Loyalty programs exceeded 540 million members, accounting for 66% of sales. Margins improved 100 basis points QoQ to 18.6% from efficiency gains. The company continues to expand store formats, invest in new concepts like Lavazza, and increase growth in lower-tier cities. We believe the company remains undervalued relative to long-term unit growth potential, margin expansion, and rising restaurant demand in China.

BSD Analysis:
Yum China is the China-localized engine behind KFC, Pizza Hut, and other concepts, with a footprint that looks more like a utility than a restaurant chain at this point. It’s a leveraged play on Chinese middle-class consumption, snacking, and delivery culture across both big cities and lower-tier markets. The business has proven remarkably resilient through waves of lockdowns, food-safety cycles, and macro noise. The real story is margin management and digital: delivery, mobile ordering, and loyalty all give Yum China a data-driven edge. Franchise and store economics are solid, but currency and policy will always add volatility. If you can stomach that, you’re getting a high-ROIC consumer platform that still has runway to densify. It’s one of the cleaner ways to own Chinese consumption without betting on a single category fad.

Pitch Summary:
China-based Trip.com (TCOM), formerly known as Ctrip, is the world’s largest global travel platforms. Founded in 1999, the company offers a comprehensive, integrated platform on which travelers can make arrangements for lodging, transportation, packaged tours and other related services, including online advertising and financial services, as well as providing corporate travel management services. China-related travel accounts for over 85% of revenue, but Trip.com is available in 24 languages and 35 local currencies while Skyscanner is available in over 50 countries and over 35 languages. A holding in the fund since the first quarter of 2020, Trip.com reported quarterly financial results that were fundamentally strong and above consensus expectations for revenue, adjusted operating profit, and earnings per share. Year-over-year revenue growth of 16% reflected continued recovery of the China travel market, increased demand for international travel, and strong performance of the company’s global brands. Cross-border flight capacity recovered to 83% of pre-pandemic levels, with expectations to reach 90% by year-end. Travel booking on the company’s international OTA platform rose 60% year over year, especially in the Asia-Pacific region. The company increased sales and marketing investment by 30% to support expansion of global brands, causing margin compression, but EBITDA margins of 31% still exceeded expectations. Trip.com maintains a strong balance sheet with $17.9 billion in cash and investments versus $2.8 billion in debt. We believe the company is well positioned to benefit from secular growth in China travel and international tourism recovery. We believe shares trade at a significant discount to intrinsic value given conservative market expectations for revenue and cash flow.

BSD Analysis:
Trip.com is the backbone of Chinese and outbound Asian travel, owning brands like Ctrip and Skyscanner with deep relationships across airlines and hotels. The China travel recovery is messy and policy-dependent, but structurally the desire to travel is not going back in the box. Trip’s scale gives it bargaining power and data advantages in a market where smaller OTAs have been squeezed. International diversification via Skyscanner and overseas partnerships gives it more levers than a purely domestic player. Regulatory and macro risk in China will always cast a shadow, and that’s exactly why the stock can get mispriced. If you believe in the long-term normalization of travel flows, Trip is the central tollbooth. You just have to be comfortable holding something that headlines will regularly try to scare you out of.

Pitch Summary:
Oracle is a leader in the enterprise software market with a strong market position in database, infrastructure and application software, and cloud-based software and services. We believe the company’s competitive advantages include its large and experienced direct sales force, a founder-driven management team that reinvests relentlessly to maintain a leading intellectual property (IP) portfolio and differentiated product suite, and a large installed base of clients with high switching costs where it consistently achieves renewal and retention rates in the mid-90% range. We believe Oracle is well positioned to benefit from the continuing growth in data storage and enterprise application software, as well as the shift to cloud-based solutions. A fund holding since inception, Oracle reported strong quarterly financial results that were above management guidance and consensus expectations on most measures, including remaining performance obligation (RPO) bookings. As a result, the company expects revenue growth to accelerate and raised its guidance to at least 16% revenue growth in its 2026 fiscal year, driven by cloud growth in excess of 40%. Oracle is the world leader in its largest business segment, enterprise database software used in customer on-premise IT environments. However, the company continues to focus on transitioning its business from a traditional on-premise, up-front software licensing and maintenance revenue model to a cloud computing subscription-based model where software revenue is recognized over the life of the client’s contract. During the period, Oracle grew its cloud revenues, now representing a low-40s percentage of total revenues, 27% year over year and saw total revenue growth inflect upward, consistent with long-term expectations. Adjusted EBIT of $5 billion rose 4% year over year and was above consensus despite a decline in margins. Operating cash flow of $20.8 billion represented 36% of revenues, though free cash flow was negative for the quarter due to elevated capex for cloud infrastructure. We believe Oracle remains a structurally attractive business trading below intrinsic value as subscription mix increases and cloud scale drives further margin expansion.

BSD Analysis:
Oracle is the enterprise software cockroach that refuses to die—and, lately, refuses to stop growing. The legacy database and maintenance business still throws off huge cash, but the cloud business is finally hitting scale with Oracle Cloud Infrastructure and Fusion apps. Cerner gives it a big anchor in healthcare data, which is strategically valuable as digital health and AI workloads expand. Oracle’s cloud pitch isn’t “we’re biggest”; it’s “we run your heavy, mission-critical workloads better and cheaper,” and that’s resonating with certain customers. The company’s AI partnerships and database integration give it surprising relevance in a market that once wrote it off as legacy. Debt is chunky but manageable given cash generation. This is a classic re-rating story where perception as a dinosaur lags reality of a business that’s quietly found a second act.

Pitch Summary:
MercadoLibre is the largest online commerce platform in Latin America. The company offers its users an ecosystem of six integrated e-commerce services that include its marketplace, payment and fintech solutions, shipping and logistics, advertising, classified listings, and merchant web services. In its most recent fiscal year, commerce and related services accounted for approximately 59% of net revenue, while payments and fintech solutions accounted for approximately 41%. The company operates in 18 countries representing the vast majority of Latin American GDP, and its 218 million active users, last disclosed in 2023, represented over 45% of the region’s estimated 480 million total internet users. We believe MercadoLibre benefits from strong and sustainable competitive advantages that include its network and ecosystem, brand, and understanding of local markets that collectively contribute to its leadership position in each market it serves. With continued growth in internet access, increasing availability of credit, and the company’s continuing investments to improve the ease and convenience of transacting online, we believe MercadoLibre remains well positioned for sustained growth over the next decade, driven by the secular growth of e-commerce across Latin America. A fund holding since inception, MercadoLibre reported strong quarterly financial results that were above consensus expectations for gross merchandise volume (GMV), revenue, operating income, and earnings per share. The company continues to execute well and gained market share in e-commerce, payments, and financial services. Despite remaining in a period of elevated investment spending, the company also showed improvements in operating profits that were materially above consensus expectations. Since 2019, the company’s GMV has increased by approximately 3.5 times, reflecting the high value proposition to consumers, and the company continues to invest in providing better selection, price, and service. For the quarter, net revenue of $5.9 billion grew by 64% year over year in constant currency. Commerce revenue of $3.3 billion rose 57% year over year. GMV of $13.3 billion rose approximately 40% year over year on a constant currency basis, driven by strong growth in Brazil and Mexico and improving performance in Argentina. Commerce revenue also benefited from continued growth in its advertising business, which grew 50% year over year in constant currency. Fintech revenue of $2.6 billion grew 73% in constant currency, driven by strong growth in merchant acquiring and credit services. Total platform payment volumes increased by 72% to $58 billion. The company also reported that its emerging asset management business now has $11.2 billion in assets under management, which grew 103% year over year. We believe MercadoLibre continues to have an attractive financial model which has been impacted by elevated investment cycles intended to strengthen the company’s ecosystem and long-term competitive positioning. Reported operating margins of 13% rose 70 basis points year-over-year and have improved materially over the past few years from the low-to-mid single digits. Margins benefited from operating leverage in sales, marketing, and product development. Management has demonstrated its long-term focus and commitment to investing everywhere needed to add value for users, including greater selection, frictionless payment options, and reduced cost and increased speed of delivery. In its commerce business, the company opened six new fulfilment centers in the latter half of 2024 and anticipates opening more by 2025. We believe current market price embeds expectations for revenue and cash flow growth well below our long-term assumptions. As a result, shares trade at a significant discount to intrinsic value and represent a compelling reward-to-risk opportunity.

BSD Analysis:
MELI is the operating system of Latin American e-commerce and fintech, with marketplace, payments, credit, and logistics all feeding each other in a virtuous loop. Mercado Pago has outgrown its origins as a checkout button and is now a proper financial super-app in many markets. The logistics network gives MELI Amazon-style control over delivery times, which is gold in countries where infrastructure is anything but smooth. Macro volatility is a feature of the region, but MELI keeps compounding through currency noise and political drama. Competition is real, yet nobody matches MELI’s full-stack approach from payments to fulfillment. Margins are rising even as they reinvest heavily, which is not something you often see in emerging-market platforms. This is one of the very few EM names you can genuinely call a long-term compounder.

Pitch Summary:
Founded in 1997, Netflix is one of the world’s leading internet entertainment platforms and a pioneer of subscription video on demand (SVOD), which it first launched in 2007. Today the company is a global leader with over 300 million paid subscribers, out of what we estimate is a total addressable market of one billion households outside of China, who access TV series, movies, mobile games, and other entertainment content across a wide variety of genres, languages, and devices. The company has subscribers in over 190 countries, with an estimated global audience in excess of 700 million, and generates almost 60% of its revenue from outside of North America. We believe Netflix’s strong and sustainable competitive advantages include its focus, scale, brand, and a large installed base of clients that are protected by high barriers to entry. As a pioneer in SVOD, Netflix has amassed a subscriber base that we estimate to represent just under 40% of all SVOD subscribers globally and approximately 50% of the industry revenue share of the leading global providers. The company’s strong brand is reflected in both its premium pricing versus peers and mid-single-digit growth in average revenue per user over the past five years. Over the past decade, Netflix has invested over $120 billion in content and amassed an estimated over 14,000 hours of original content, which is estimated to represent just under two times the next five largest streaming competitors combined. Of course, it is not just the quantity, but quality of the content that matters. Over this same period, Netflix received over 1000 Emmy nominations and had 218 wins. The company has captured the first or second spot in total Emmy Awards during the past six years, which we believe reflects the quality of its content. We believe the ability to create and acquire high quality content, based on cumulative knowledge and insights attained from its large installed base of subscribers, has contributed to very high barriers to entry. A fund holding since the first quarter of 2022, Netflix reported quarterly financial results that were strong and above management guidance and consensus expectations for revenue, operating margins, free cash flow, and earnings per share. The company also provided guidance for the current quarter that was above consensus expectations, but maintained its full-year outlook for key metrics. Quarterly revenue of $10.5 billion rose 16% in constant currency, driven by higher subscription and ad revenue, both of which benefited from membership growth and pricing gains. The company recently increased prices in the US, UK, and Argentina, and announced it would be increasing prices in France. The company also successfully rolled out an internal ad tech platform in the US and transitioned off a partner platform. The company anticipates rolling out this platform to all its ad markets over the next several months, which is expected to contribute to better measurement and targeting, as well as enabling new ad formats and expanded programmatic capabilities. While the company stopped reporting subscriber numbers beginning in 2025, it did highlight its regionally specific approach to growing user engagement and market share. Citing the UK as emblematic of its approach, it reported that its share of UK TV time rose to 9% from 8% in the prior-year quarter, behind only local media providers BBC and ITV, whose share includes both linear and streaming programing. The company believes that paid sharing and its ad-supported pricing plan, which was initially rolled out in 12 markets in November 2022, will further broaden its addressable subscriber base and has contributed to accelerating revenue growth and greater monetization per user. The company previously commented that the paid-sharing initiative was resulting in better-than-expected retention and conversion of borrowing households into full paying members. We believe Netflix has an attractive and improving financial model. Operating income of $3.3 billion rose 27% year over year on margins of 32% that expanded by 400 basis points over the prior-year quarter. Free cash flow of $2.7 billion rose 29% from the prior-year quarter and represented 26% of total revenue. Long-term debt to equity of 58% declined from 62% in the prior-year period. The company’s balance sheet continues to improve, with long-term debt to equity declining from over 200% in 2019. We believe SVOD will continue to benefit from a secular shift from linear television to streaming entertainment due to growing global penetration of broadband internet connections, the proliferation of internet-connected devices, and consumers’ desire for on-demand personalized entertainment at prices that are generally significantly below paid TV. As a leading provider of SVOD, we believe Netflix will take its share of global consumer entertainment spending from about 3% today to approximately 5% over our long-term investment horizon, contributing to low-double-digit growth in revenue. We expect substantial recent investments in content will moderate, and we believe the company will benefit from higher gross margins as its content library is leveraged over a growing global subscriber base. We recently increased our longer-term projected operating margins for Netflix, driven by our expectation of greater scale benefits, and we now expect Netflix to generate longer-term operating margins in the mid-30% range, up from approximately 30%, previously. As a result, we expect both operating profits and free cash flow will grow faster than revenues, in the mid-teens. We believe current market expectations substantially underestimate the strength of Netflix’s business model and its ability to generate sustainable growth in free cash flow over our long-term investment horizon. As a result, we believe the shares trade at a significant discount to our estimate of intrinsic value and can offer a compelling reward-to-risk opportunity.

BSD Analysis:
Netflix has fully graduated from “subscriber growth story” to “global media cash machine” with an ad tier and password crackdown that both hit the P&L in a good way. Its real edge isn’t just content; it’s the data loop that tells Netflix what to make, where, and for whom, across 190+ countries. Rivals are still bleeding or restructuring, while Netflix is already in margin-max mode. Ads open up a whole new pool of price-sensitive users and ARPU expansion without blowing up the user experience. The risk is always that content spend gets undisciplined or that the arms race escalates, but Netflix has been surprisingly sober compared to legacy studios. This is now the de facto global TV network with better economics than almost any media peer. You’re paying for both scale and discipline—and right now, they’re delivering both.

Pitch Summary:
Redox was another detractor for the period, delivering mixed results amid a challenging operating backdrop. Encouragingly, volumes grew 13% in the first half despite softer macroeconomic conditions, reflecting continued market share gains. That said, profitability came under pressure due to higher employee and transport costs, while the US operations -- still in their early phase -- remain somewhat uneven, with larger customer orders contributing to lumpiness. The founding family-led management continues to execute well, strengthening supplier relationships with the likes of Dow and Viva Energy, while selectively pursuing bolt-on acquisitions, such as Molekulis, to broaden its addressable market. Looking forward, we believe Redox is well positioned following what we view as a one-off cost reset. With a clearer view of the full-year cost base, we expect operating leverage to improve over time. Importantly, the pricing environment has stabilised, providing a better platform for volume growth to drive top-line momentum. At 14.3x forward earnings and with 10% of its market capitalisation in net cash, the valuation is undemanding. With expectations now more balanced, we’ve taken the opportunity to modestly increase our holding.

BSD Analysis:
Redox is a chemicals and ingredients distributor—an unsexy business that can still be very profitable when scale and relationships are right. The company benefits from deep supplier ties, broad customer coverage, and logistics capability across Australia and beyond. Distribution can look commoditized, but service quality, reliability, and technical support create stickiness, especially in regulated end markets. Margin risk shows up when competition intensifies or when inventory and FX dynamics move against you. The upside comes from operational leverage and category expansion into higher-value specialty products. If Redox continues professionalizing and scaling, it can compound steadily. It’s a “boring but cash-flow” story with execution as the main driver.

Pitch Summary:
While near-term financial performance has been poor -- gross profit declined 29% in the first half of FY25 -- sentiment has also been weighed down by ongoing macroeconomic uncertainty and the potential impacts of tariffs. However, we continue to see a bright future ahead for the business. Dante's position as the leading digital audio protocol continues to strengthen, with the number of products on Dante now at 12.7x the nearest competitor. This dominance is underpinned by more original equipment manufacturers (OEMs) designing, developing and shipping Dante-enabled products. ... Add to this the early traction in video -- with over 60 OEMs and 116 products -- and encouraging progress in software, and we see multiple avenues for the business' long-term growth. The recent acquisition of Iris Studio an AI-powered, cloud-based camera control platform alongside key hires with deep domain expertise, has emphasised a strategic push into these emerging opportunities. With 14% of its market capitalisation in cash post-acquisition, we believe the business is well placed to navigate the current environment... All while the business is selling at its cheapest multiple since listing, despite being more entrenched and at greater scale.

BSD Analysis:
Audinate powers Dante, the de facto standard for digital audio networking across professional AV, broadcast, and live events. Standards businesses are beautiful when they win because ecosystems form around them—hardware partners, installers, and end users all reinforce adoption. The opportunity is expanding Dante into adjacent markets like video and broader AV control, increasing content per installation. The risk is that supply-chain disruptions and capex cycles in pro AV can create demand swings. Another risk is incumbents pushing alternatives, though displacing an embedded standard is harder than it sounds. If Audinate executes, it can be a “toll collector” on modern AV connectivity. The stock will track sentiment on growth, but the platform logic is strong.

Pitch Summary:
Pro Medicus delivered another strong year as it further cemented its leadership in radiology imaging through best-in-class cloud-enabled technology, disciplined execution, and a premium product that continues to capture a healthy share of the value it's adding. The company continued its run of exceptional financial performance; over the past five years, it has grown revenues at an average rate of 26%, and earnings at an average annual rate of 31%, per year. For the most recent half year, the business generated net profit margins at a very impressive 53%. Add to this, the growing optionality in the platform exemplified by the landmark A$170 million, 10-year contract signed with UCHealth in July 2025. ... The shift toward longer 10-year contracts, compared to the historical 5-7 year norm, underscores deepening customer loyalty. ... We heavily reduced our position during the year as the market pulled forward many years of expected strong growth into the prevailing share price. We continue to manage the position size in light of the elevated market price, balancing it with our mantra to 'let winners run'.

BSD Analysis:
Pro Medicus is a rare healthcare software name with true pricing power, built on premium radiology imaging workflow that hospitals rely on every day. Its product quality and performance matter because imaging volumes are huge and downtime is unacceptable, which creates genuine switching costs. The move to cloud and enterprise-wide imaging solutions is a tailwind, and Pro Medicus is winning large, sticky contracts. The business is asset-light with very high margins, which is why the valuation is often uncomfortable—yet it stays uncomfortable because execution is so consistent. The risk is concentration in large deals and the possibility that competition becomes more aggressive on price. But hospitals don’t like ripping out core imaging systems unless they have to. This is a best-in-class niche software compounder.

Pitch Summary:
Our investment in Pinnacle Investment Management delivered strong results over FY25, underpinned by growth in multiple areas. The company has been attracting strong net inflows (27% organic growth at the half year) and generating strong returns within many existing affiliates (net profit was up 151% at the half year), but it was the acceleration of new businesses that stood out. Standing up new affiliates with proven teams has been the leading playbook for much of Pinnacle's success to date, and the launch of Life Cycle Investment Partners in the UK during the year has shown similar early success. ... In terms of acquisitions, the company has historically been more conservative in pulling the trigger, but after years of patience and discipline, Pinnacle raised $450 million in late 2024 and simultaneously acquired stakes in VSS Capital Partners in New York, and Pacific Asset Management in the U.K. ... With growing global reach and a cashed-up balance sheet, Pinnacle has the scale and funding to support global distribution across a large, diversified product and client set. We remain positive on the outlook given the company's capital allocation and execution track record.

BSD Analysis:
Pinnacle is a distribution and seed-capital platform for boutique asset managers, effectively monetizing talent without needing to run every strategy itself. The appeal is diversification: multiple affiliates, multiple products, and fee streams tied to AUM growth over time. When markets rise, Pinnacle benefits from both performance fees and inflows; when markets fall, operating leverage cuts the other way. The key risk is that active management is a competitive, reputation-driven business where a few bad years can trigger outflows. Pinnacle’s edge is finding and backing skilled teams early, then scaling them via distribution and operational support. If it keeps adding high-quality affiliates, it can compound in a way traditional single-strategy managers struggle to match. It’s a platform bet on alpha talent plus distribution.

Pitch Summary:
Catapult had a standout year on a number of fronts, and as our highest weighted position for seven months of the year, it contributed heavily to the Fund's return. To recap, Catapult delivered a step change in profitability; annual contract revenue grew 18% to exceed US$100 million, while operating margins tripled to 13%, as incremental profit margins reached 65%, propelling the company into its second consecutive year of free cash flow positivity. ... Adoption of its wearables continues to grow as more teams familiarise themselves with the technology, while video is scaling even faster as teams embrace both solutions. The technology is now a core part of elite sport and has become indispensable for many professional teams. That growing reliance is reflected in the numbers, with Catapult retaining 96% of its annual contract revenue - a figure that increases to 99% for customers using both wearables and video. ... The business is selling for 7.5x enterprise value to sales, which is undemanding against the growth, high retention and strong incremental profitability of the business.

BSD Analysis:
Catapult sells sports performance analytics—wearables, video, and data platforms used by pro teams to optimize training, reduce injuries, and gain competitive edges. The market is niche but global, and once a club builds workflows around Catapult data, churn tends to be low. The company’s challenge is expanding beyond elite teams into broader tiers without diluting brand and margins. Profitability hinges on scaling software revenue and controlling hardware costs and customer acquisition spend. There’s also a “budget cycle” risk: teams will spend, but not irrationally, and renewals depend on demonstrated value. If Catapult keeps moving up the stack into higher-margin software and video analytics, the model improves materially. This is a “category builder” that can work if it stays disciplined.

Pitch Summary:
Our exit from TechnologyOne was different from the other positions we sold during the year. In this case, the business had performed well and our investment thesis largely played out as expected. However, the valuation had become stretched. While we are generally reluctant to exit high-quality businesses on valuation grounds alone, we felt the capital could be better deployed in other opportunities. TechnologyOne remains a well-run, resilient business, and we will continue to closely follow its progress relative to the prevailing share price.

BSD Analysis:
Technology One is an Australian vertical software compounder selling mission-critical ERP-style systems into government, education, and enterprise customers. Those customers have long sales cycles, but once implemented, switching is painful, creating sticky recurring revenue. The company’s push toward SaaS has improved revenue quality and margin visibility, even if the transition phase can mask growth at times. Its niche focus is a feature, not a bug: it dominates specific segments rather than fighting global giants everywhere. Execution risk is mainly around implementations and keeping product innovation ahead of customer needs. The upside is steady expansion of ARR and operating leverage as SaaS scales. It’s not exciting, but it’s consistently effective—exactly what long-term software investing is supposed to be.

Pitch Summary:
We also exited our position in ARB during the year. While we continue to admire the company's strong brand, capable management team, long-term capital allocation track record and considered approach to international growth, we see the business facing a tougher macroeconomic environment and ongoing uncertainty around the impact of global tariffs given they are moving physical goods across borders. To management's credit, they have navigated these challenges well to date. However, we ultimately did not find the risk-reward compelling enough to continue holding the position and chose to reallocate capital to other higher-conviction opportunities.

BSD Analysis:
ARB is a premium brand in 4x4 accessories, and it benefits from a customer base that spends on capability and lifestyle, not just utility. The company’s moat is brand trust, product breadth, and distribution—people don’t want cheap gear when they’re hours from help off-road. Growth is tied to vehicle sales and the outdoor recreation cycle, but ARB has historically held up well because the installed base keeps upgrading. FX and input costs can pressure margins, especially with global manufacturing and export exposure. The bigger opportunity is continued international expansion, particularly in North America, where the addressable market is large. The risk is that demand normalizes after strong cycles and inventory builds up. ARB is a quality consumer-industrial hybrid with real brand equity.

Pitch Summary:
Alphabet did meaningfully underperform our average portfolio return as concerns that it's near monopolistic position in Search... could be eroded by new Artificial Intelligence (Al) alternatives like ChatGPT and Perplexity. When it comes to the potential risks Al poses to the dominance of search, our view is a balanced one. No doubt uncertainty has increased but we believe Alphabet remains well positioned through its massive user distribution (9 products with over 1 billion users each) and long-standing investments and leadership in Al... Alphabet is innovating fast and has already successfully rolled out their own Al powered search function, Al Overviews. ... Management has noted that Al Overviews are monetising at the same rate as regular Search ads... With a relatively undemanding valuation of less than 20x forward earnings, we still believe the risk/reward for Alphabet is attractive. That said, it would be remiss not to acknowledge that the future dominance of Search is less certain today than it was a few years ago... As such, we rightsized our position on strength earlier this year.

BSD Analysis:
Alphabet is still a cash machine built on Search, but the real debate is whether AI changes the shape of that machine or just upgrades it. The company’s distribution advantage is ridiculous—billions of daily queries, Android, Chrome, YouTube—and distribution usually wins technology transitions. Cloud has matured into a real profit contributor, giving Alphabet a second engine beyond ads. YouTube remains underappreciated as both a cultural platform and a monetization engine as TV budgets keep migrating. The risk is regulatory pressure and the possibility that AI-native interfaces nibble at query volume or pricing. But Alphabet has the compute, talent, and data to compete aggressively in AI without betting the company. If AI increases overall digital engagement, Alphabet is positioned to monetize it from multiple angles.

Pitch Summary:
The Fund’s largest position, Latin American e-commerce leader MercadoLibre, was our second largest contributor. The company continued its long track record of impressive growth with net revenues growing 38% year-on-year to US$22.4 billion while operating margins came in at a healthy 12.9%. Its primary marketplace business gained market share across all key regions – namely Brazil, Argentina and Mexico – and the platform now boasts 67 million unique active buyers, up 25% year-on-year. Notably, despite their scale, the growth rate in active buyers saw a marked acceleration over the year and is now at its highest level since early 2021. Another positive development during the year was the significant macroeconomic improvement in Argentina – MercadoLibre’s second largest market. It’s no secret that the country has faced persistent economic challenges, however, there are initial signs the dramatic reforms implemented by Javier Milei’s new administration are working. For instance, monthly inflation has dropped from a staggering 25.5% in December 2023 to as low as 1.5% in May 2025. In turn MercadoLibre has seen a marked improvement in its Argentinian business. As of the most recent quarter, items sold soared 52% year-on-year while fintech delivered 119% revenue growth in U.S. dollar terms, close to 4x the prior quarter’s growth rate.

BSD Analysis:
MercadoLibre is the closest thing Latin America has to a full-stack internet infrastructure company—commerce, logistics, payments, and increasingly credit. The moat is the network: sellers, buyers, shipping, and fintech all reinforce each other, making it harder for rivals to compete without burning cash. Payments is the hidden engine, expanding beyond marketplace transactions into everyday financial services. Inflation and FX volatility are constant in the region, but MELI has historically navigated those cycles better than most by pricing dynamically and staying essential. The company’s logistics build-out is expensive, yet it’s also what turns a marketplace into a defensible platform. The risk is regulatory and credit exposure as fintech grows, plus competitive intensity in key markets. If you want emerging market growth with real execution, MELI is still the gold standard.

Pitch Summary:
Southeast Asia’s leading e-commerce platform, Sea Limited, was our largest contributor for the year as the company delivered an impressive combination of accelerating growth and improving profitability. At a group level, revenue rose 30% year-on-year to US$17.9 billion and operating income saw a material turnaround from a US$38.8 million loss to a US$875.2 million profit. Its core e-commerce platform, Shopee, emerged stronger following a period of elevated marketing investment, which drove higher order volumes, improved take rates, and an acceleration in top-line growth. Notably, regulatory pressures in Indonesia have abated, and competition across the region has moderated, with peers now taking a more rational approach to take rates, paving the way for a more favourable industry structure going forward. Beyond e-commerce, Sea’s digital financial services business (Monee) and digital gaming platform (Garena) also performed well. Monee saw its loan book grow 77% year-on-year while simultaneously improving the proportion of non-performing loans, which contributed to revenue growth of 44% to US$2.7 billion. For Garena, although reported revenue declined slightly, it was encouraging to see bookings increase 51% year-on-year, supported by stabilising engagement and improved monetisation. Overall, it was a very positive year, and we remain patient holders. Whilst not as well-known as some global peers, Sea continues to benefit from the steady shift toward online retail and digital services across a region where e-commerce penetration remains in its early stages and below global averages.

BSD Analysis:
Sea is a three-headed beast: e-commerce, digital entertainment, and fintech, all operating in highly competitive emerging markets. The bull case is that management has proven it can pivot from growth-at-all-costs to profitability, especially in e-commerce. Its fintech arm is strategically valuable because payments and credit deepen ecosystem lock-in and raise take rates over time. The bear case is brutal competition, subsidy wars, and the fact that Southeast Asia is not an easy region to dominate consistently. Execution matters quarter to quarter, and the stock will punish any margin backsliding. If Sea keeps balancing growth with discipline, it can grow into a much larger earnings base. If it loses focus, it becomes an expensive collection of battles.

Pitch Summary:
Finally, the ‘healing’ process within the U.S. used car market has taken longer than we anticipated. Pricing appears to be stabilizing, but the market remains short on late model year vehicles (i.e., ‘younger’ used cars), which CarMax typically traffics in. Auto market dynamics suggest this supply constraint should improve in the coming years as more cars come off leases, and in the interim, we believe CarMax’s brand has not been impaired. We continue to monitor developments closely and size the position accordingly.

BSD Analysis:
CarMax is the scaled, branded player in used auto retail, built around trust, inventory depth, and a standardized buying experience. The near-term story is cyclical pressure from higher interest rates, tighter credit, and normalization of used vehicle pricing after pandemic distortions. Long term, CarMax’s omni-channel model and reconditioning scale give it structural advantages that smaller dealers struggle to replicate. Financing and servicing add margin opportunities, though credit quality and funding costs matter in tougher cycles. Inventory management is the key execution variable — when pricing resets are mishandled, earnings get hit fast. As affordability remains a challenge for new vehicles, demand for used cars stays structurally supported. CarMax is best viewed as a high-quality operator waiting for a more favorable auto and credit cycle to unlock its earnings power.

Pitch Summary:
HEICO Corporation, a midcap aerospace parts and services company, is the Fund’s second-largest holding and top performer for the quarter. HEICO’s flight services group continues to post strong growth despite travel volumes flattening out from the post-Covid recovery.

BSD Analysis:
HEICO is the unassailable, high-growth aerospace component and electronics oligopolist whose stock is a conviction bet on the long-term, high-margin aerospace MRO supercycle. The core moat is its dominance in providing PMA (Parts Manufacturer Approval) parts and specialized electronics (under its Flight Support Group and Electronic Technologies Group). This PMA strategy allows HEICO to sell high-quality, lower-cost parts that break the OEM monopoly, driving superior margins and revenue growth. The stock is a high-quality compounder, leveraging its unique regulatory advantage and disciplined M&A to deliver predictable, superior earnings.

Pitch Summary:
Revenue in the financial year to March 2025 was up 6%, but more importantly, management’s profit measure increased 33% and the business is generating cash. Operations have been tightened up, with a few skydiving locations closed. None of that helped Experience Co’s share price. It fell 26% during the year and hurt returns by 1.2%. The business ran a strategic review in mid-2024, which attracted some interest but didn’t result in a deal. That interest may well return now that the financial performance is improving.

BSD Analysis:
Experience Co offers operationally improving exposure to tourism recovery, with tighter cost control and stronger profitability despite only modest top-line growth. Management’s willingness to close underperforming sites and run a strategic review signals a focus on value creation rather than empire building. The disconnect between improving fundamentals and a falling share price suggests sentiment rather than earnings is driving the weakness. Should inbound tourism continue to normalise and another strategic bidder emerge, the equity could see a sharp rerating from depressed levels. Key risks include macro shocks to travel demand and execution on remaining sites, but current cash generation provides a margin of safety.

Pitch Summary:
MotorCycle Holdings (MTO) has staged a sharp turnaround, too. To be fair, it was never performing as poorly as the share price suggested. When a fund liquidation collided with a lack of liquidity in the stock, it traded down to $1 per share just prior to the start of the financial year, and we were able to secure a line of stock at less than that. Operationally, the business stabilised during the year and re-emerged with stronger momentum. Net profit rose 43% in the first half of the 2025 financial year. The wholesale distribution of CF Moto motorcycles continues to outperform, driven by growing brand appeal and new models. Then, on the second-last day of the financial year, the company announced a highly strategic acquisition: a set of dealerships bought out of the administration wreckage of its largest rival, Peter Stevens Motorcycles. The economics are attractive, and the deal moves the business to an estimated 20% share of the Australian new motorcycle sales market. It’s a meaningful shift in industry structure, and the company is emerging as the clear consolidator. The stock ended the year above $3 a share and contributed 3.5% to the Fund’s performance.

BSD Analysis:
Motorcycle Holdings now appears to be a scale consolidator in a fragmented dealership market, with the distressed acquisition of Peter Stevens assets materially boosting market share. The CF Moto distribution relationship provides a strong growth engine as brand penetration and product breadth expand. Earnings growth is being driven by both organic improvement and accretive M&A, with significant operating leverage at current volumes. The earlier share-price collapse reflected technical selling rather than fundamentals, leaving room for a sharp rerating as profitability recovered. Key risks include integration of acquired dealerships and exposure to discretionary consumer spending, but the industrial logic of consolidation is compelling.