Investment Pitches

Pitch Summary:
Ryan Specialty Holdings (RYAN) is in the third category of perceived indirect AI risks. Ryan was founded by Pat Ryan, who also founded AON and turned it into the second largest insurance broker in the world. RYAN is one of three Excess and Surplus or E&S brokers that dominate the U.S. market. E&S is more complicated, specialized insurance that is sold to manage risks not adequately covered by the highly regulated admitted or standard insurance market. The E&S market is growing much faster than the admitted market and RYAN is gaining market share, so it has been growing at a solid double digit rate for many years. E&S and RYAN continue to gain market share, but the insurance market is inherently cyclical with regard to price. We are entering a soft market with price declines for certain segments, especially property. As a result, RYAN's growth is slowing in the short run and its stock price declined meaningfully in 2025. More recently, RYAN's stock price has declined meaningfully again on AI related fears. During the first quarter, OpenAI announced a partnership with Insurify, a privately held company using an app to sell auto insurance to consumers. They are adding AI functionality to the app. Most auto insurance is sold through the admitted market. RYAN does not sell any consumer auto insurance. RYAN mostly sells very complex E&S insurance for its clients, who include very large insurance companies. They trust RYAN to help them manage risks that can be as much as several hundred million dollars. We asked the CEO of one of these large insurance companies if they would consider using AI instead of an E&S broker such as RYAN to place these large, complex risks. The answer was an emphatic, "No." On the other hand, RYAN is using AI to lower costs and provide faster, better risk assessment by making its brokers more efficient. We believe that RYAN will benefit from AI as opposed to being harmed by it. We have been buying RYAN.

BSD Analysis:
Vulcan Value Partners presents a compelling investment case for Ryan Specialty Holdings, a dominant player in the specialized Excess & Surplus insurance brokerage market. Founded by insurance industry veteran Pat Ryan, RYAN operates in a niche requiring deep expertise to manage complex, high-value risks that standard insurance markets cannot adequately cover. The company has achieved consistent double-digit growth by gaining market share in the faster-growing E&S segment. While near-term growth faces headwinds from insurance pricing cycles, the manager argues that AI disruption fears are misplaced since RYAN's business involves highly complex, relationship-driven transactions worth hundreds of millions of dollars that require human expertise. Rather than being disrupted, RYAN is leveraging AI to enhance broker efficiency and risk assessment capabilities. Trading at discounted valuations due to cyclical concerns and AI fears, RYAN offers an opportunity to acquire a market-leading franchise in a specialized, growing segment with significant competitive advantages.

Pitch Summary:
Ares is in the second category. It is an alternative asset manager widely considered to be the leading private credit provider globally. Its value has compounded at double digit rates while we have owned it. Its stock price declined 6.2% last year and 31.6% during the first quarter on AI related fears. Specifically, bears are worried about its exposure to software companies and about clients allocating capital away from ARES because of AI related fears about that same software exposure. Let us dissect both related arguments. First, ARES exposure to software is a relatively small proportion of its portfolio. Second, its exposure is in credit, so ARES has the most senior position if the companies begin to struggle. Their loan to value ratio is approximately 37%. The companies are not struggling, and default rates are close to zero. The average duration of their loans is about three and a half years so they will get all of their money back or refinance relatively soon, before AI causes financial stress, if it ever does. ARES has been aware of AI risks for many years and has been very selective in the types of companies in which they invest. Assuming we are wrong and 15% of their software loans default we estimate it would only reduce the company's growth rate by 3% or 4% for one year and that ARES would continue to grow at a double digit rate. Second, ARES has a very impressive track record minimizing credit losses going back to the financial crisis. Most of the funds they manage are institutional, which provides stability. Their assets under management continue to grow nicely. Their primary "wealth channel" or "retail" related assets under management comes from ARCC, a business development company that acts like a closed end fund. Investors can sell ARCC's stock but they cannot force ARES to liquidate ARCC's loans. Bears have cited meaningful fund withdrawals at Blue Owl, a smaller ARES competitor that is much more retail oriented with less stable capital than ARES, as a reason to sell ARES. We looked at Blue Owl several years ago and decided it did not qualify for investment precisely because its structure is inferior compared to ARES. We believe that fears expressed by the bears are not supported by facts so that ARES' value is stable and that its stock price decline represents a compelling buying opportunity. We have been buying.

BSD Analysis:
Vulcan Value Partners makes a strong case for Ares Management Corporation as the leading global private credit provider trading at an attractive discount due to misplaced AI disruption fears. The manager systematically addresses bear concerns about software exposure, noting it represents a small portfolio proportion with senior credit positions at conservative 37% loan-to-value ratios and near-zero default rates. With average loan durations of 3.5 years, Ares maintains significant downside protection even in stressed scenarios. The fund's institutional client base provides capital stability, contrasting favorably with more retail-oriented competitors like Blue Owl. Ares has demonstrated exceptional credit discipline since the financial crisis while maintaining double-digit growth rates. The manager views current AI-related selling as creating an opportunity to acquire shares in a competitively advantaged alternative asset manager with stable value growth, strong fee-earning assets, and a proven track record of capital preservation.

Pitch Summary:
SAP is in the first category - software. We owned it a number of years ago. We also owned its primary competitor, Oracle. Since we sold it, it has not been discounted enough to be even remotely interesting until recently. During the first quarter, SAP reported double digit earnings growth in 2025, forecasted continued double digit earnings growth in 2026 and accelerating earnings growth in 2027. Its stock price declined 16% that day. We started buying it a couple of weeks later. SAP and Oracle both dominate Enterprise Resource Planning software or ERP. ERP is an extremely complex software system used by larger, complex companies to manage their core operations and coordinate activities across all functional areas. They enable managers to have the information they need across the organization to allocate resources, make real time decisions, and execute those decisions across multiple intertwined aspects of the business. For example, Mercedes-Benz Group uses SAP to coordinate its global operations – everything from supply chain management, inventory management, factory utilization optimization, and retooling, to sales and marketing forecasts, human resource management, compliance with regulations from multiple jurisdictions around the world, finance, budgeting, and financial reporting. The company could not produce audited financial statements without SAP's ERP system. Delta Airlines also uses SAP's ERP. I could describe the complexities of its global operations, but I am trying to write a letter instead of a book. Some have described trying to "rip out" an ERP system akin to attempting to remove the circulatory system from a human being. In other words, it is impossible. We have bought businesses at discounts because they were missing their quarterly projections due to the difficulty of implementing a new ERP system. ERP is a system of software, not a single product, operating across the enterprise, which creates a powerful network effect. It is extremely unlikely that a company would use AI to build and maintain its own software application for a specific part of an operation. However, if they did it would still have to communicate with and coordinate through the entire organization to be effective. How would it do so? It would have to use ERP. CEOs and AI leaders we have talked to tell us that ERP drives AI, not the other way around. We believe that SAP will be able to use AI to make its ERP systems more useful and therefore even more valuable to their customers.

BSD Analysis:
Vulcan Value Partners presents a compelling bull case for SAP SE, the global leader in enterprise resource planning (ERP) software. The fund manager argues that SAP's ERP systems are mission-critical infrastructure for large enterprises, making them virtually impossible to replace due to decades of embedded data, business processes, and customizations. With over 425,000 customers including 98 of the world's 100 largest companies, SAP enjoys exceptional competitive moats through switching costs and network effects. The investment thesis centers on AI disruption fears being overblown, as SAP's position as the system-of-record actually strengthens its competitive advantage in an AI-driven world. The manager believes ERP drives AI rather than being disrupted by it, positioning SAP to benefit from AI integration. Trading at a significant discount following AI-related sell-offs despite reporting double-digit earnings growth, SAP offers an attractive entry point into a competitively entrenched franchise with stable, growing cash flows.

Pitch Summary:
Ryan Specialty Holdings (RYAN) is in the third category of perceived indirect AI risks. Ryan was founded by Pat Ryan, who also founded AON and turned it into the second largest insurance broker in the world. RYAN is one of three Excess and Surplus or E&S brokers that dominate the U.S. market. E&S is more complicated, specialized insurance that is sold to manage risks not adequately covered by the highly regulated admitted or standard insurance market. The E&S market is growing much faster than the admitted market and RYAN is gaining market share, so it has been growing at a solid double digit rate for many years. E&S and RYAN continue to gain market share, but the insurance market is inherently cyclical with regard to price. We are entering a soft market with price declines for certain segments, especially property. As a result, RYAN's growth is slowing in the short run and its stock price declined meaningfully in 2025. More recently, RYAN's stock price has declined meaningfully again on AI related fears. During the first quarter, OpenAI announced a partnership with Insurify, a privately held company using an app to sell auto insurance to consumers. They are adding AI functionality to the app. Most auto insurance is sold through the admitted market. RYAN does not sell any consumer auto insurance. RYAN mostly sells very complex E&S insurance for its clients, who include very large insurance companies. They trust RYAN to help them manage risks that can be as much as several hundred million dollars. We asked the CEO of one of these large insurance companies if they would consider using AI instead of an E&S broker such as RYAN to place these large, complex risks. The answer was an emphatic, "No." On the other hand, RYAN is using AI to lower costs and provide faster, better risk assessment by making its brokers more efficient. We believe that RYAN will benefit from AI as opposed to being harmed by it. We have been buying RYAN.

BSD Analysis:
Vulcan Value Partners presents a compelling bull case for Ryan Specialty Holdings, emphasizing the company's dominant position in the Excess and Surplus (E&S) insurance brokerage market. Founded by Pat Ryan, who previously built AON into the second-largest insurance broker globally, RYAN is one of only three brokers that dominate the specialized E&S market in the United States. The fund highlights that E&S insurance addresses complex, specialized risks not covered by standard admitted markets, with RYAN managing risks worth hundreds of millions of dollars for large institutional clients. While acknowledging near-term headwinds from insurance market cyclicality and AI-related fears, Vulcan argues that AI disruption concerns are misplaced, noting that RYAN operates in complex commercial insurance rather than consumer auto insurance where AI partnerships are emerging. The manager conducted primary research with large insurance company CEOs who emphatically stated they would not use AI to replace E&S brokers for complex risk placement. Instead, Vulcan believes RYAN will benefit from AI by enhancing broker efficiency and risk assessment capabilities, making it an AI beneficiary rather than a disruption victim.

Pitch Summary:
Ares is in the second category. It is an alternative asset manager widely considered to be the leading private credit provider globally. Its value has compounded at double digit rates while we have owned it. Its stock price declined 6.2% last year and 31.6% during the first quarter on AI related fears. Specifically, bears are worried about its exposure to software companies and about clients allocating capital away from ARES because of AI related fears about that same software exposure. Let us dissect both related arguments. First, ARES exposure to software is a relatively small proportion of its portfolio. Second, its exposure is in credit, so ARES has the most senior position if the companies begin to struggle. Their loan to value ratio is approximately 37%. The companies are not struggling, and default rates are close to zero. The average duration of their loans is about three and a half years so they will get all of their money back or refinance relatively soon, before AI causes financial stress, if it ever does. ARES has been aware of AI risks for many years and has been very selective in the types of companies in which they invest. Assuming we are wrong and 15% of their software loans default we estimate it would only reduce the company's growth rate by 3% or 4% for one year and that ARES would continue to grow at a double digit rate. Second, ARES has a very impressive track record minimizing credit losses going back to the financial crisis. Most of the funds they manage are institutional, which provides stability. Their assets under management continue to grow nicely. Their primary "wealth channel" or "retail" related assets under management comes from ARCC, a business development company that acts like a closed end fund. Investors can sell ARCC's stock but they cannot force ARES to liquidate ARCC's loans. Bears have cited meaningful fund withdrawals at Blue Owl, a smaller ARES competitor that is much more retail oriented with less stable capital than ARES, as a reason to sell ARES. We looked at Blue Owl several years ago and decided it did not qualify for investment precisely because its structure is inferior compared to ARES. We believe that fears expressed by the bears are not supported by facts so that ARES' value is stable and that its stock price decline represents a compelling buying opportunity. We have been buying.

BSD Analysis:
Vulcan Value Partners makes a strong bull case for Ares Management Corporation, positioning it as the leading global private credit provider with a track record of double-digit value compounding. The fund addresses AI-related concerns head-on, arguing that bears are overestimating the risk to Ares' software exposure, which represents only a small portion of the portfolio. Critically, Ares holds senior credit positions with a conservative 37% loan-to-value ratio and near-zero default rates, providing significant downside protection. The manager emphasizes Ares' institutional client base and stable capital structure, contrasting it favorably with competitors like Blue Owl that have more volatile retail-oriented funding. Even in a stress scenario where 15% of software loans default, Vulcan estimates this would only reduce growth by 3-4% for one year while maintaining double-digit growth rates. The fund views the 31.6% first-quarter decline as creating an attractive buying opportunity for a high-quality alternative asset manager with strong competitive positioning and proven credit discipline.

Pitch Summary:
SAP is in the first category - software. We owned it a number of years ago. We also owned its primary competitor, Oracle. Since we sold it, it has not been discounted enough to be even remotely interesting until recently. During the first quarter, SAP reported double digit earnings growth in 2025, forecasted continued double digit earnings growth in 2026 and accelerating earnings growth in 2027. Its stock price declined 16% that day. We started buying it a couple of weeks later. SAP and Oracle both dominate Enterprise Resource Planning software or ERP. ERP is an extremely complex software system used by larger, complex companies to manage their core operations and coordinate activities across all functional areas. They enable managers to have the information they need across the organization to allocate resources, make real time decisions, and execute those decisions across multiple intertwined aspects of the business. For example, Mercedes-Benz Group uses SAP to coordinate its global operations – everything from supply chain management, inventory management, factory utilization optimization, and retooling, to sales and marketing forecasts, human resource management, compliance with regulations from multiple jurisdictions around the world, finance, budgeting, and financial reporting. The company could not produce audited financial statements without SAP's ERP system. Delta Airlines also uses SAP's ERP. I could describe the complexities of its global operations, but I am trying to write a letter instead of a book. Some have described trying to "rip out" an ERP system akin to attempting to remove the circulatory system from a human being. In other words, it is impossible. We have bought businesses at discounts because they were missing their quarterly projections due to the difficulty of implementing a new ERP system. ERP is a system of software, not a single product, operating across the enterprise, which creates a powerful network effect. It is extremely unlikely that a company would use AI to build and maintain its own software application for a specific part of an operation. However, if they did it would still have to communicate with and coordinate through the entire organization to be effective. How would it do so? It would have to use ERP. CEOs and AI leaders we have talked to tell us that ERP drives AI, not the other way around. We believe that SAP will be able to use AI to make its ERP systems more useful and therefore even more valuable to their customers.

BSD Analysis:
Vulcan Value Partners presents a compelling bull case for SAP SE, emphasizing the company's dominant position in the Enterprise Resource Planning (ERP) software market alongside Oracle. The fund manager highlights SAP's mission-critical role in global enterprises, noting that over 425,000 customers, including 98 of the world's 100 largest companies, rely on SAP's systems for core business operations. The investment thesis centers on SAP's competitive moat created by decades of embedded data, business processes, and customizations that make switching vendors extremely costly and disruptive. Despite reporting strong double-digit earnings growth and positive forward guidance, SAP's stock declined 16% on AI disruption fears, creating what Vulcan sees as an attractive entry point. The fund argues that rather than being disrupted by AI, SAP is positioned to benefit as the incumbent system-of-record, with AI agents requiring SAP's data and business context to function effectively. Vulcan believes SAP's investment in agentic AI solutions will enhance customer productivity and further entrench its competitive position.

Pitch Summary:
Ryan Specialty Holdings (RYAN) is in the third category of perceived indirect AI risks. Ryan was founded by Pat Ryan, who also founded AON and turned it into the second largest insurance broker in the world. RYAN is one of three Excess and Surplus or E&S brokers that dominate the U.S. market. E&S is more complicated, specialized insurance that is sold to manage risks not adequately covered by the highly regulated admitted or standard insurance market. The E&S market is growing much faster than the admitted market and RYAN is gaining market share, so it has been growing at a solid double digit rate for many years. E&S and RYAN continue to gain market share, but the insurance market is inherently cyclical with regard to price. We are entering a soft market with price declines for certain segments, especially property. As a result, RYAN's growth is slowing in the short run and its stock price declined meaningfully in 2025. More recently, RYAN's stock price has declined meaningfully again on AI related fears. During the first quarter, OpenAI announced a partnership with Insurify, a privately held company using an app to sell auto insurance to consumers. They are adding AI functionality to the app. Most auto insurance is sold through the admitted market. RYAN does not sell any consumer auto insurance. RYAN mostly sells very complex E&S insurance for its clients, who include very large insurance companies. They trust RYAN to help them manage risks that can be as much as several hundred million dollars. We asked the CEO of one of these large insurance companies if they would consider using AI instead of an E&S broker such as RYAN to place these large, complex risks. The answer was an emphatic, "No." On the other hand, RYAN is using AI to lower costs and provide faster, better risk assessment by making its brokers more efficient. We believe that RYAN will benefit from AI as opposed to being harmed by it. We have been buying RYAN.

BSD Analysis:
Vulcan Value Partners presents a compelling investment case for Ryan Specialty Holdings, founded by insurance industry veteran Pat Ryan who previously built AON into a global powerhouse. RYAN dominates the specialized Excess & Surplus insurance market, which handles complex risks beyond standard admitted market coverage and grows faster than traditional insurance segments. The manager argues that AI disruption fears are misplaced, as RYAN's business involves highly complex, specialized insurance placements worth hundreds of millions of dollars that require human expertise and relationships with major insurance companies. Unlike consumer auto insurance where AI applications may have relevance, E&S brokers like RYAN manage sophisticated risks that large insurers explicitly state they would not trust to AI systems. Instead, RYAN is leveraging AI to enhance broker efficiency and risk assessment capabilities. With the company gaining market share in a growing segment and trading at discounted valuations due to cyclical pricing pressures and misunderstood AI concerns, Vulcan sees an attractive entry point.

Pitch Summary:
Ares is in the second category. It is an alternative asset manager widely considered to be the leading private credit provider globally. Its value has compounded at double digit rates while we have owned it. Its stock price declined 6.2% last year and 31.6% during the first quarter on AI related fears. Specifically, bears are worried about its exposure to software companies and about clients allocating capital away from ARES because of AI related fears about that same software exposure. Let us dissect both related arguments. First, ARES exposure to software is a relatively small proportion of its portfolio. Second, its exposure is in credit, so ARES has the most senior position if the companies begin to struggle. Their loan to value ratio is approximately 37%. The companies are not struggling, and default rates are close to zero. The average duration of their loans is about three and a half years so they will get all of their money back or refinance relatively soon, before AI causes financial stress, if it ever does. ARES has been aware of AI risks for many years and has been very selective in the types of companies in which they invest. Assuming we are wrong and 15% of their software loans default we estimate it would only reduce the company's growth rate by 3% or 4% for one year and that ARES would continue to grow at a double digit rate. Second, ARES has a very impressive track record minimizing credit losses going back to the financial crisis. Most of the funds they manage are institutional, which provides stability. Their assets under management continue to grow nicely. Their primary "wealth channel" or "retail" related assets under management comes from ARCC, a business development company that acts like a closed end fund. Investors can sell ARCC's stock but they cannot force ARES to liquidate ARCC's loans. Bears have cited meaningful fund withdrawals at Blue Owl, a smaller ARES competitor that is much more retail oriented with less stable capital than ARES, as a reason to sell ARES. We looked at Blue Owl several years ago and decided it did not qualify for investment precisely because its structure is inferior compared to ARES. We believe that fears expressed by the bears are not supported by facts so that ARES' value is stable and that its stock price decline represents a compelling buying opportunity. We have been buying.

BSD Analysis:
Vulcan Value Partners makes a strong case for Ares Management as the leading global private credit provider trading at an attractive discount due to misplaced AI disruption fears. The manager systematically addresses bear concerns about software exposure, noting it represents a small portfolio proportion with senior credit positions at conservative 37% loan-to-value ratios and near-zero default rates. With average loan durations of 3.5 years, Ares maintains significant downside protection even in stressed scenarios. The fund highlights Ares' superior institutional capital base compared to retail-oriented competitors like Blue Owl, providing greater stability during market volatility. Ares has demonstrated exceptional credit discipline since the financial crisis while maintaining double-digit growth in assets under management. The manager views the 31.6% first-quarter decline as creating a compelling entry point for a high-quality alternative asset manager with stable value growth and strong competitive positioning in the expanding private credit market.

Pitch Summary:
SAP is in the first category - software. We owned it a number of years ago. We also owned its primary competitor, Oracle. Since we sold it, it has not been discounted enough to be even remotely interesting until recently. During the first quarter, SAP reported double digit earnings growth in 2025, forecasted continued double digit earnings growth in 2026 and accelerating earnings growth in 2027. Its stock price declined 16% that day. We started buying it a couple of weeks later. SAP and Oracle both dominate Enterprise Resource Planning software or ERP. ERP is an extremely complex software system used by larger, complex companies to manage their core operations and coordinate activities across all functional areas. They enable managers to have the information they need across the organization to allocate resources, make real time decisions, and execute those decisions across multiple intertwined aspects of the business. For example, Mercedes-Benz Group uses SAP to coordinate its global operations – everything from supply chain management, inventory management, factory utilization optimization, and retooling, to sales and marketing forecasts, human resource management, compliance with regulations from multiple jurisdictions around the world, finance, budgeting, and financial reporting. The company could not produce audited financial statements without SAP's ERP system. Delta Airlines also uses SAP's ERP. I could describe the complexities of its global operations, but I am trying to write a letter instead of a book. Some have described trying to "rip out" an ERP system akin to attempting to remove the circulatory system from a human being. In other words, it is impossible. We have bought businesses at discounts because they were missing their quarterly projections due to the difficulty of implementing a new ERP system. ERP is a system of software, not a single product, operating across the enterprise, which creates a powerful network effect. It is extremely unlikely that a company would use AI to build and maintain its own software application for a specific part of an operation. However, if they did it would still have to communicate with and coordinate through the entire organization to be effective. How would it do so? It would have to use ERP. CEOs and AI leaders we have talked to tell us that ERP drives AI, not the other way around. We believe that SAP will be able to use AI to make its ERP systems more useful and therefore even more valuable to their customers.

BSD Analysis:
Vulcan Value Partners presents a compelling bull case for SAP SE, the global leader in enterprise resource planning (ERP) software. The fund manager argues that SAP's ERP systems are mission-critical infrastructure for large enterprises, making them virtually impossible to replace due to embedded data, processes, and customizations spanning decades. With over 425,000 customers including 98 of the world's 100 largest companies, SAP enjoys exceptional competitive moats through switching costs and network effects. The investment thesis centers on AI disruption fears being overblown, as SAP's position as the system-of-record makes it essential for AI implementations rather than vulnerable to displacement. The manager believes SAP will benefit from AI by enhancing its ERP offerings and developing integrated agentic solutions. Trading at a significant discount following AI-related sell-offs despite reporting double-digit earnings growth, SAP represents what Vulcan considers a rare opportunity to acquire a world-class business with substantial margin of safety.

Pitch Summary:
The most significant news from our perspective is the Fund's latest investment - Amazon (down 9.8%). We have long admired Amazon. Its "Day 1" philosophy is quite remarkable, with an obsession to satisfy its customers, an eagerness to embrace external trends, and a propensity to make quick decisions. The business has expanded aggressively: CDs, electronics, toys in late 90s; market place in 2000; free 2-day shipping in 2005; AWS cloud in 2006; the Kindle in 2007; physical retail (WholeFoods) in 2017; and media with the acquisition of MGM in 2022. Relentlessly focused on the long-term, Amazon's growth has been fueled by its "Flywheel" effect: lower prices lead to more customers, which attracts more third-party sellers, allowing for greater economies of scale. It stands today as a serious player in AI and a leader in both logistics and cloud computing. It has far evolved from that humble online bookstore of 30 years ago. Since we tweaked our quality/value criteria a few years back we have seen it flutter in and out of our quantitative screen depending on its share price. For a few reasons, we think now is an appropriate time to buy. Let us explain. Our core holding in the technology platform space is Alphabet. It had a poor quarter (down 8.1%), but it has had a stellar run over the last 12 months (it returned 86.6%). A year ago its shares traded at a 12% discount to our valuation. Our valuation has increased since then, but with that share price rise, it now trades at a premium of 43%. On the other hand, Amazon traded at 30% premium to our valuation one year ago. Our valuation has also increased, but with its more modest share price increase (9.5%), that premium is now 17%. Some may question our buying at a price higher than our valuation. But our reasoning is that all valuations are subjective, and particularly so when it comes to technology businesses pursuing new endeavours with unknown payoffs. At the same time, despite the shares trading at a valuation premium, given their exciting prospects, we feel it makes sense for the Fund to maintain a reasonable (circa 10%) allocation to these types of businesses. We maintain that Alphabet is very well placed across the AI sphere. But Amazon offers a different base earnings stream and a supporting business with a more direct retail link. Funding an Amazon purchase with the partial sale of a more expensive (on our numbers) position, being Alphabet, enables us to more cheaply capture a broader range of potential AI benefits. Also, by doing so, we reduce the number of "greater than 5%" holdings which providing greater flexibility in managing the portfolio.

BSD Analysis:
The fund managers present a compelling case for Amazon as a strategic technology platform investment, emphasizing the company's remarkable "Day 1" philosophy and customer obsession that has driven aggressive expansion across multiple verticals. They highlight Amazon's evolution from an online bookstore to a diversified technology giant with leadership positions in AI, logistics, and cloud computing through AWS. The investment thesis centers on relative valuation attractiveness compared to Alphabet, with Amazon trading at a 17% premium to their valuation versus Alphabet's 43% premium. The managers view Amazon as offering complementary AI exposure with a different earnings base and more direct retail connectivity. Their "Flywheel" effect concept - where lower prices attract more customers and third-party sellers, creating economies of scale - demonstrates sustainable competitive advantages. The timing appears strategic, as the fund seeks to maintain approximately 10% allocation to technology platforms while optimizing valuation entry points. The diversification benefits and portfolio flexibility gained by reducing concentrated positions above 5% add tactical merit to this investment decision.

Pitch Summary:
TransUnion is one of the three leading credit bureaus in the US. Over 95,000 lending institutions self-report their consumer lending and payment data to TransUnion. That data is then aggregated as a credit report and credit score and sold back to lenders to evaluate the creditworthiness of borrowers. The combined revenue that the three credit bureaus generate from selling mission critical proprietary credit data accounts for just three basis points of total US household debt of $19 trillion. TransUnion has also used its existing data on consumers to expand into new verticals, including marketing, fraud, identity verification, insurance and tenant screening. The company has evolved from being solely a credit bureau to being a global data and analytics company. Depressed volumes in mortgage lending, as well as investor concerns over AI disruption, have weighed on the stock price, giving us an opportunity to own its shares. We believe that TransUnion will benefit from AI and that AI disruption fears are misplaced. TransUnion's non-public consumer data is proprietary, regulated, and highly sensitive. Therefore, it is impossible for a new entrant, using AI or any other method, to replicate. TransUnion's data and decisioning solutions are also embedded in lenders' workflows, making it costly for customers to switch. TransUnion historically has grown its organic revenues at a high single digit rate. The company has an attractive 30% operating profit margin, generates very high returns on capital, and produces strong free cash flow. They have been successfully deleveraging their balance sheet and are now placing a much greater emphasis on share buybacks. We have followed this business for many years and are happy to own it with a substantial margin of safety.

BSD Analysis:
Vulcan's TransUnion thesis centers on the company's irreplaceable data assets and defensive market position. As one of three dominant credit bureaus, TransUnion benefits from a unique data network effect where 95,000 lending institutions contribute proprietary consumer data that cannot be replicated by AI or new entrants. The regulatory framework and sensitive nature of credit data create additional barriers to disruption. Beyond traditional credit reporting, TransUnion has successfully expanded into adjacent verticals like fraud prevention and identity verification, demonstrating the value of its data platform. The current weakness from mortgage volume declines and AI fears creates an opportunity to acquire shares in a business with 30% operating margins, high returns on capital, and strong free cash flow generation. The company's focus on deleveraging and increased share buybacks at depressed valuations enhances the risk-adjusted return profile for long-term investors.

Pitch Summary:
Ares is in the second category. It is an alternative asset manager widely considered to be the leading private credit provider globally. Its value has compounded at double digit rates while we have owned it. Its stock price declined 6.2% last year and 31.6% during the first quarter on AI related fears. Specifically, bears are worried about its exposure to software companies and about clients allocating capital away from ARES because of AI related fears about that same software exposure. Let us dissect both related arguments. First, ARES exposure to software is a relatively small proportion of its portfolio. Second, its exposure is in credit, so ARES has the most senior position if the companies begin to struggle. Their loan to value ratio is approximately 37%. The companies are not struggling, and default rates are close to zero. The average duration of their loans is about three and a half years so they will get all of their money back or refinance relatively soon, before AI causes financial stress, if it ever does. ARES has been aware of AI risks for many years and has been very selective in the types of companies in which they invest. Assuming we are wrong and 15% of their software loans default we estimate it would only reduce the company's growth rate by 3% or 4% for one year and that ARES would continue to grow at a double digit rate. Second, ARES has a very impressive track record minimizing credit losses going back to the financial crisis. Most of the funds they manage are institutional, which provides stability. Their assets under management continue to grow nicely. Their primary 'wealth channel' or 'retail' related assets under management comes from ARCC, a business development company that acts like a closed end fund. Investors can sell ARCC's stock but they cannot force ARES to liquidate ARCC's loans. Bears have cited meaningful fund withdrawals at Blue Owl, a smaller ARES competitor that is much more retail oriented with less stable capital than ARES, as a reason to sell ARES. We looked at Blue Owl several years ago and decided it did not qualify for investment precisely because its structure is inferior compared to ARES. We believe that fears expressed by the bears are not supported by facts so that ARES' value is stable and that its stock price decline represents a compelling buying opportunity. We have been buying.

BSD Analysis:
Vulcan's ARES thesis demonstrates how AI fears have created an attractive opportunity in a fundamentally sound business. As the leading global private credit provider, ARES has built a track record of double-digit value compounding with minimal credit losses since the financial crisis. The AI-related concerns appear overblown given that software exposure represents a small portfolio percentage, ARES holds senior credit positions with 37% loan-to-value ratios, and loan durations average 3.5 years. Even in a severe stress scenario with 15% software loan defaults, the impact would be manageable and temporary. ARES benefits from institutional capital stability, unlike more retail-oriented competitors experiencing withdrawals. The company's selective investment approach, proven credit discipline, and structural advantages through ARCC provide downside protection. The 31.6% first quarter decline creates an opportunity to acquire shares in a market-leading alternative asset manager at a significant discount to intrinsic value.

Pitch Summary:
Ryan Specialty Holdings (RYAN) is in the third category of perceived indirect AI risks. Ryan was founded by Pat Ryan, who also founded AON and turned it into the second largest insurance broker in the world. RYAN is one of three Excess and Surplus or E&S brokers that dominate the U.S. market. E&S is more complicated, specialized insurance that is sold to manage risks not adequately covered by the highly regulated admitted or standard insurance market. The E&S market is growing much faster than the admitted market and RYAN is gaining market share, so it has been growing at a solid double digit rate for many years. E&S and RYAN continue to gain market share, but the insurance market is inherently cyclical with regard to price. We are entering a soft market with price declines for certain segments, especially property. As a result, RYAN's growth is slowing in the short run and its stock price declined meaningfully in 2025. More recently, RYAN's stock price has declined meaningfully again on AI related fears. During the first quarter, OpenAI announced a partnership with Insurify, a privately held company using an app to sell auto insurance to consumers. They are adding AI functionality to the app. Most auto insurance is sold through the admitted market. RYAN does not sell any consumer auto insurance. RYAN mostly sells very complex E&S insurance for its clients, who include very large insurance companies. They trust RYAN to help them manage risks that can be as much as several hundred million dollars. We asked the CEO of one of these large insurance companies if they would consider using AI instead of an E&S broker such as RYAN to place these large, complex risks. The answer was an emphatic, 'No.' On the other hand, RYAN is using AI to lower costs and provide faster, better risk assessment by making its brokers more efficient. We believe that RYAN will benefit from AI as opposed to being harmed by it. We have been buying RYAN.

BSD Analysis:
Vulcan's RYAN thesis highlights the company's dominant position in the specialized Excess & Surplus insurance market, which handles complex risks not covered by standard insurance. Founded by the same entrepreneur who built AON into a global powerhouse, RYAN benefits from the structural growth of the E&S market and its own market share gains. The recent AI-driven selloff appears misplaced, as RYAN operates in highly complex commercial insurance requiring sophisticated risk assessment and relationships with major insurance companies. The OpenAI-Insurify partnership in consumer auto insurance is irrelevant to RYAN's business model focused on large commercial risks worth hundreds of millions. Instead of being disrupted, RYAN is leveraging AI to enhance broker efficiency and risk assessment capabilities. The cyclical softening in property insurance pricing creates near-term headwinds but doesn't alter the long-term structural advantages of the E&S market or RYAN's competitive position within it.

Pitch Summary:
We believe that ServiceNow is also one of the best businesses in the world. ServiceNow automates workflows in large and complex enterprises. Their platform sits on top of all of an enterprise's data and systems of record. This very unique and enviable position allows ServiceNow to orchestrate and automate work across departments, enterprise wide. To use an analogy, if a large enterprise is an airport, and its multiple software applications are planes, ServiceNow is the control tower coordinating all of these planes/applications. The company has grown from its roots in IT and now has very large businesses in sales and service, HR, finance, supply chain, operations, and security, as well as in industry specific verticals like Financial Services, Healthcare, and Government. ServiceNow grew revenue 21%, adjusted EBIT 28%, and free cash flow per share 33% in 2025. This growth at scale puts ServiceNow in elite company. Despite the strong performance, the stock is down approximately 40% year to date and 60% since the beginning of 2025. The company has been on our MVP list for over 5 years and has compounded its value at an incredible rate over that period. It has never been materially discounted until recently. We are thrilled to be able to own this wonderful business with a substantial margin of safety. Bears fear that ServiceNow will be disrupted by AI. We believe that AI makes ServiceNow's platform better. ServiceNow has long been the best, most trusted, workflow automation vendor. By embedding AI into their existing workflows and providing needed context, execution infrastructure, and governance for AI agents, they are enabling their customers to accelerate automation and generate a real ROI on their investments. The company has significant domain expertise, data, and distribution advantages. The company is very well managed, has a net cash balance sheet, produces significant free cash flow, and is accelerating share repurchases at what we believe is a significant discount to intrinsic value.

BSD Analysis:
Vulcan's ServiceNow thesis centers on the company's unique position as the enterprise workflow orchestration platform that sits above all other systems. The airport control tower analogy effectively illustrates ServiceNow's critical coordinating role across complex enterprise operations. With 21% revenue growth, 28% EBIT growth, and 33% free cash flow per share growth in 2025, the company demonstrates exceptional execution at scale. The 60% stock decline since early 2025 despite strong fundamentals creates an attractive entry point for a business that has compounded value consistently. Rather than being disrupted by AI, Vulcan argues ServiceNow is positioned to be enhanced by it, leveraging its existing workflow automation expertise to provide AI governance and execution infrastructure. The company's net cash position, strong free cash flow generation, and accelerated share buybacks at discounted levels provide additional downside protection while the market reassesses AI disruption risks.

Pitch Summary:
SAP SE is the global leader in enterprise resource planning (ERP) software, which serves as the operating system for many of the world's largest companies. SAP's software manages many functions across an organization, including financial accounting, supply chains, customer relationships, human capital, and procurement. SAP and Oracle dominate the global ERP market. We have owned both businesses in the past and we are thrilled to have the opportunity to own SAP again with a substantial margin of safety. We believe SAP is one of the best businesses in the world. They have over 425,000 customers, including 98 of the 100 largest companies globally. SAP's ERP solutions often have decades of embedded data, business processes, and software customizations. It is extremely rare for companies to switch ERP vendors due to the cost, time, and disruption risk that switching creates, particularly for large, global enterprises that make up SAP's core customer base. SAP's stock price is down significantly due to concerns about AI disruption. SAP is the system-of-record for its customers. All their business data, context, and business logic sits within SAP. AI-enabled agents do not work without this data and business context. Customers would be taking on significant risk by using AI to recreate business processes that SAP already handles well. SAP's core customers are global businesses with enormous complexity, thousands of employees, and a vast web of customers, suppliers, and distribution networks, in addition to many different tax and regulatory jurisdictions. The time and difficulty to replicate all this using AI is enormous. SAP is currently investing in agentic AI solutions that enable their customers to be more productive. As the incumbent with a broad array of software solutions, SAP is in a superior position to develop AI agents that work effectively across an organization in an integrated fashion. Even if SAP's customers adopt third party AI agents instead of SAP's agentic agents, we believe that SAP will still benefit. The ERP system drives AI. Any enhancement to the ERP system increases its value which makes SAP even more competitively entrenched. Either way, we believe that SAP will ultimately be an AI beneficiary, helping to make themselves more efficient internally while also creating more value for their customers.

BSD Analysis:
Vulcan presents a compelling bull case for SAP based on its dominant position in enterprise resource planning software. The manager argues that SAP's competitive moat is exceptionally wide, with over 425,000 customers including 98 of the world's 100 largest companies. The switching costs are enormous due to decades of embedded data, customizations, and business processes that would be extremely costly and risky to replace. While AI disruption fears have pressured the stock, Vulcan contends that SAP is actually positioned to benefit from AI rather than be disrupted by it. As the system-of-record containing all customer data and business logic, SAP is essential for AI agents to function effectively. The company is investing in its own AI solutions while maintaining its role as the foundational platform that drives AI implementations. This defensive positioning combined with AI-driven value creation opportunities suggests SAP could emerge stronger from the current technology transition.

Pitch Summary:
FP Newspapers (FP) is a tiny $5m microcap company that flies under the radar. FP owns 49% of a partnership that owns the leading newspaper in Canada's 6th largest town, Winnipeg, called the Winnipeg Free Press and some other smaller news outlets. FP was formerly an income tax trust for Canadian tax purposes that owned securities issued by a limited partnership that itself owned a few Canadian newspapers. Due to the implementation of the SIFT tax in the early 2010s in Canada, the trust ownership structure lost its tax advantage and FP then converted into a corporation to own the limited partnership and went off the TSX on to the smaller TSX Venture Exchange. This current structure is in place today and shareholders of FP own 49% of the limited partnership. Newspapers make most of their money from advertising and circulation (actual sale of the paper). The rise of the internet and digital advertising has resulted in attention and advertising dollars moving online and away from papers, which has resulted in the industry declining over the past few decades. You can see the steady decline in FP's total revenues over the last few years: However, the Winnipeg Free Press is extremely embedded in the 803,000 residents of Winnipeg with 46% of Winnipeg adults reading the Free Press on a weekly basis. And the breakdown of the revenue numbers tell that. While print advertising has declined most years, circulation revenue has remained extremely resilient. Even with the decline in overall revenues, FP manages to maintain a reliable $6m - $7m of EBITDA per year. In 2022 management decided to invest in a printing press that they would move from New Jersey to Winnipeg for $10m using debt financing, only to abandon the project in 2023. Since that time revenue has continued to decrease but the free cash flow of the business has remained flat and has been used to pay off the debt. With a stock price of $0.70 and shares outstanding of 6.9m, FP has a $4.8m market cap. The underlying partnership has net cash of 2m after having paid down all its debt and just did $6m EBITDA for 2025. Without taking account for the net cash, the look through EV/EBITDA is 2x. FP owns the building it operates in and based on conservative property tax records could be worth $22m. Taking FP's 49% share of that would value the company double its current market cap. This hidden asset provides significant downside protection and there is a potential catalyst on the horizon of management putting some of that cash build up to work for shareholders. Believe it or not there are still buyers for these types of assets. Just last year the DallaNews Corporation decided to sell its building and then right after there was a bidding war for the operating business. A logical acquirer of FP in my eyes would be Torstar Corporation, which owns a collection of Canadian newspapers in some mid-sized Canadian towns. While I don't think the business needs to be sold to do well from here, it does show there is demand for these declining niche assets. FP is cheap today for a few reasons: They use the equity accounting method for its main asset which makes it hard to screen for as a quick glance or view of the financial statements won't tell the whole story. The building FP operates out of is measured at its historical cost $5m market cap makes it too small and illiquid for most funds to own It doesn't own the underlying newspaper asset 100% outright but just shy of control at 49% Buying into a declining newspaper company is not very enticing to most investors Questionable past capital allocation that resulted in a large one-time write off of $8m right after deciding to make a significant investment in a printing press

BSD Analysis:
The manager presents FP Newspapers as a deeply undervalued microcap opportunity trading at an attractive 2x EV/EBITDA multiple. The investment thesis centers on a significant hidden asset - the company's real estate worth approximately $22 million, of which FP's 49% share would double the current market cap and provide substantial downside protection. Despite industry headwinds, the Winnipeg Free Press maintains strong local market penetration with 46% weekly readership among Winnipeg adults, and circulation revenues have proven remarkably resilient even as print advertising declines. The company generates reliable $6-7 million annual EBITDA and has strengthened its balance sheet by paying down debt with free cash flow. The manager identifies multiple reasons for the current undervaluation, including complex equity accounting that obscures value, the sub-control 49% ownership structure, and general investor aversion to declining newspaper assets. A potential acquisition by Torstar Corporation or similar consolidator could serve as a catalyst, with recent industry transactions demonstrating continued buyer interest in niche newspaper assets. The combination of extreme valuation discount, hidden real estate value, and potential for capital allocation improvements creates an asymmetric risk-reward profile despite the secular industry decline.

Pitch Summary:
Uber is another. While many investors remain focused on long-term fears surrounding autonomous vehicles, we believe the market is underappreciating the strength of the company's current business, its growing cash flow generation, and the potentially valuable role it could play in a future dominated by autonomous vehicles.

BSD Analysis:
Boyar Research takes a contrarian bullish view on Uber, arguing the market is overly focused on autonomous vehicle disruption risks while overlooking the company's current business fundamentals. The firm highlights Uber's strengthening cash flow generation and robust operational performance as underappreciated by investors fixated on long-term technological threats. Rather than viewing autonomous vehicles as purely disruptive, Boyar suggests Uber could play a valuable role in an AV-dominated future, potentially as a platform operator or fleet manager. This positioning reflects confidence in Uber's platform economics and network effects, which could translate into competitive advantages even as the underlying transportation technology evolves. The investment thesis centers on the market's myopic focus on distant risks while ignoring improving near-term fundamentals and potential strategic value in future mobility ecosystems. Boyar views current pricing as attractive given the disconnect between operational strength and market perception.

Pitch Summary:
That disconnect between price and value is one reason we continue to find compelling opportunities outside the market's most crowded trades. Madison Square Garden Sports is one example. The company owns the New York Knicks and the New York Rangers, two of the most valuable sports franchises in the world, yet we believe the public market continues to value those assets far below what they would command in a private market transaction.

BSD Analysis:
Boyar Research presents Madison Square Garden Sports as a classic sum-of-the-parts value opportunity, arguing the public market significantly undervalues the company's premier sports assets. The firm emphasizes that MSGS owns two of the world's most valuable franchises—the New York Knicks and Rangers—which they believe would command substantially higher valuations in private market transactions. This represents a clear disconnect between public market pricing and intrinsic asset value. The pitch positions MSGS as an alternative to the market's crowded quality trades, offering exposure to scarce, trophy assets in major media markets. The investment thesis relies on the eventual convergence of public market valuation with private market asset values. Boyar views this as an opportunity to own premier sports franchises at a meaningful discount to their true worth, leveraging the inefficiency between public and private market valuations for unique, irreplaceable assets.