Investment Pitches

Pitch Summary:
KB Financial Group was a contributor during the quarter. The South Korea-headquartered diversified bank’s stock price rose steadily throughout the period as it posted solid first-quarter results with buybacks and dividends tracking ahead of expectations, showing firm commitment to Korea’s corporate Value-Up program during turbulent times. In addition, capital generation was solid and net-interest margins were more resilient than they have been in previous rate-cut cycles. The managers believe governance in Korea is changing, so an inflection is warranted in the banks’ historically discounted book value trading multiples due to higher payouts and improved capital allocation.

BSD Analysis:
KB Financial offers a compelling mix of capital return, improving governance and discounted valuation relative to global banks. Participation in Korea’s Value-Up initiatives and stronger shareholder distributions should help close the gap between price and intrinsic value. Resilient NIMs and capital generation through a rate-cut cycle underscore the franchise’s earnings power. Risks include macro volatility, property-market exposure and regulatory shifts, but the risk/reward remains attractive at low price-to-book multiples.

Pitch Summary:
IQVIA was a contributor during the quarter. The U.S.-headquartered life sciences services and analytics company’s stock price rose following solid first-quarter 2025 results and an improved outlook. Management emphasized continued demand for data, analytics and technology solutions from biopharma clients as well as a healthy backlog in its contract research operations. The managers believe IQVIA remains well positioned to benefit from structural growth in outsourced clinical development and real-world evidence. They continue to view the company as an attractive compounder with strong competitive advantages and high switching costs.

BSD Analysis:
IQVIA sits at the intersection of data, software and services for pharma and biotech customers, underpinning a durable growth profile as R&D complexity increases. Its broad data assets and integrated technology stack create a sticky ecosystem that is difficult for competitors to replicate. Despite periodic biopharma funding cycles, long-term demand for outsourced clinical and evidence-generation services remains robust. Valuation reflects its quality and growth, but continued margin expansion and disciplined capital allocation can sustain attractive returns.

Pitch Summary:
ConocoPhillips was a contributor during the quarter as the U.S.-headquartered exploration and production company’s stock price advanced on solid first-quarter 2025 results. The company delivered strong production, disciplined capital spending and robust free cash flow generation despite a volatile commodity price backdrop. Management reiterated its commitment to returning a significant portion of cash flow to shareholders through dividends and buybacks while maintaining a strong balance sheet. The managers continue to view ConocoPhillips as a well-positioned low-cost producer with attractive assets and long-term inventory depth.

BSD Analysis:
ConocoPhillips offers leveraged but disciplined exposure to global oil and gas prices, with a competitive cost structure and diversified asset base. Management’s focus on capital efficiency and shareholder returns has translated into sizeable buybacks and a compelling cash return framework through the cycle. While energy prices are cyclical and sensitive to geopolitics and demand trends, the company’s balance sheet strength and inventory quality provide resilience. Longer term, energy-transition policy and ESG pressure remain key considerations, but COP’s free cash flow yield and capital discipline support a constructive view.

Pitch Summary:
Alphabet was a contributor during the quarter. The U.S.-headquartered global technology company’s stock price rose as it reported strong first-quarter 2025 results with solid revenue growth across Search, YouTube and Cloud while expanding operating margins. Management highlighted robust demand for AI-related products and services and continued discipline in expense management. The team believes Alphabet’s investments in artificial intelligence should support a long runway of innovation and monetization opportunities across its businesses. They continue to view Alphabet as an attractive compounder with a strong balance sheet and significant optionality.

BSD Analysis:
Alphabet remains a dominant player in search and digital advertising while rapidly scaling its cloud and AI platforms, giving it multiple engines of growth. Margin expansion alongside accelerating AI investment suggests meaningful operating leverage and strong capital allocation discipline. With substantial net cash, Alphabet can sustain heavy capex for AI infrastructure while still returning capital via buybacks. Regulatory and competitive risks around search and app stores persist, but the combination of scale, data and distribution still provides a wide moat.

Pitch Summary:
Capital One Financial was the top contributor during the quarter. The U.S.-headquartered consumer finance company’s stock price rose as it completed its acquisition of Discover Financial in May and reported solid first-quarter 2025 earnings headlined by broadly improving credit metrics. Management has identified over $2 billion of expense and revenue synergies from the merger, which it expects to realize over the next 24 months. The managers continue to view Capital One as a disciplined, tech-forward and well-capitalized company and look forward to seeing how the Discover acquisition adds value.

BSD Analysis:
Capital One is positioned to be a scaled leader in U.S. card and payments with the Discover acquisition, enhancing its network economics and data advantages. Improving credit trends and a robust capital position support the case for durable earnings power even as the cycle matures. If management executes on the identified cost and revenue synergies, mid-teens EPS growth over the next few years appears achievable, with upside from further digital penetration. Key risks include integration complexity, regulatory scrutiny around market power and potential credit normalization, but valuation still discounts a fair amount of macro uncertainty.

Pitch Summary:
Charles Schwab was a contributor during the quarter. The U.S.-headquartered investment banking and brokerage firm’s stock price rose relatively steadily throughout the period as it reported solid first-quarter 2025 earnings. The earnings were highlighted by net new assets, net interest margin and adjusted earnings per share (EPS), all besting consensus expectations. Management emphasized that Schwab should benefit from the current volatile market environment and is confident in achieving the high end of its EPS guidance for the year. The managers continue to believe Schwab is a best-in-class brokerage business with a long runway for future growth.

BSD Analysis:
Schwab remains a scaled, low-cost brokerage and wealth platform with powerful asset-gathering capabilities and significant operating leverage to higher client cash yields and equity markets. Strong net new asset inflows, resilient NIM and EPS upside versus expectations underscore the strength of its model despite industry pricing pressure and regulatory scrutiny. Robust capital generation supports ongoing buybacks and balance-sheet flexibility as it normalizes its interest-rate exposure post-2023 stresses. While deposit mix and rate sensitivity remain key watchpoints, Schwab’s franchise quality and secular shift toward self-directed and advised investing provide a compelling long-term runway.

Pitch Summary:
Some of the most well-defined AI experimentation we’ve seen thus far is at another Japanese holding, Shift, which was purchased last year. Shift is the leading provider of software-testing services in Japan, a country facing an acute shortage of IT engineers. Like many companies assisting others in their transition to AI, Shift has started by experimenting within its own business.

BSD Analysis:
SHIFT is a high-growth pure-play on the non-discretionary necessity of software quality, rapidly disrupting the legacy IT services market by applying scientific methodology to software testing. The entire thesis is that as enterprises rely more heavily on complex digital systems, the need for advanced, high-quality Software Test Planning and Design becomes absolutely mission-critical, translating into non-cyclical revenue for SHIFT. The company's competitive moat is its unique "SHIFT Method"—a standardized, scientific approach that leverages specialized, certified engineers to execute excellent test design and execution. SHIFT is aggressively capitalizing on the trend toward Agile and multi-device development, offering total support for quality-related services and improving quality while accelerating development speed. This focus on quality improvement and risk reduction in upstream phases ensures clients prevent excessive costs, making SHIFT an indispensable partner in system development and modernization. The stock is a leveraged bet on the acceleration of software complexity where the failure to execute flawless testing is simply no longer an option.

Pitch Summary:
AI’s benefits for smaller companies are hardly a US-only phenomenon. Far outside traditional IT hubs, in places such as Iga City, Mie Prefecture, Japan, for example, the technology is being used to speed factory production and improve quality controls in the production of eye drops and contact-lens solutions. Iga City is the home to Rohto Pharmaceutical’s “cyber-physical system”—a smart factory, where sensors and cameras monitor automated and semi-automated production equipment, then send the data they collect to the cloud for AI to analyze. The company, a new addition to the portfolio, is a leader in health and beauty, with a strong franchise in eye care, as well as a portfolio of skin- and lip-care products, acne treatments, deodorants, and antiseptic lotions. At a recent trade show in Osaka, Rohto showcased a pipeline of innovations in ophthalmology and regenerative medicine enabled by AI, such as a compact automated cell-culture system. It is also collaborating with Osaka University and SAI—a company that uses optical sensing technology to turn information from the physical world into digital data—on ways to use AI to predict diseases based on diagnostic eye-health readings.

BSD Analysis:
Rohto is a dominant, high-quality consumer health compounder that is dramatically expanding its presence in high-growth global markets, moving beyond its traditional Japanese eye care base. The core thesis is a structural shift toward global growth, with the company seeing particularly strong demand and sales acceleration in Asia and North America. This momentum is driving record-breaking revenues, hitting ¥250 billion for FY 2024 (a 10% YoY increase), primarily fueled by its high-margin eye care and skincare segments. The firm operates with a relentless focus on innovation, launching over 15 new products in 2023 and sustaining a steady Return on Equity (ROE) of 15%. Rohto's long history (125 years) and commitment to quality (ISO 9001 certified) provide an unassailable brand moat in over 15 countries. This combination of consistent double-digit revenue growth, disciplined innovation, and expanding global market share makes Rohto a stable, high-quality play in the resilient consumer health sector.

Pitch Summary:
For example, while Alten is focused on engineering services for the auto industry (a factor that has contributed to recent pressure on the stock), Reply is strong in Europe and industries such as gaming. Bechtle is a leader in Germany and neighboring German-speaking countries, with expertise in helping companies navigate equipment-replacement cycles. Globant, though based in Argentina, primarily works with companies in the US and Europe. Globant is also doing something that none of the others are. In June, it introduced AI Pods, a subscription-based toolkit that gives clients access to its proprietary AI model and capabilities. It is a way to both monetize its AI agents and prevent AI from upending its billing practices. It’s too early to assess the success of AI Pods, but over time, the subscription-model approach may support more profitable long-term growth. The stock price adequately reflects the risks; we added to our holding in Globant this quarter.

BSD Analysis:
Globant is an aggressively punished digital transformation specialist whose current stock price (down ∼73%) is a gross over-penalization for a temporary growth slowdown, not a structural failure. The core thesis is a massive valuation arbitrage driven by a current conservative revenue growth forecast of only 1.3% for FY 2025, which severely under-represents the underlying demand for its high-value AI and digital services. The true signal lies in the profitability and pipeline: the company is maintaining a strong Non-IFRS Adjusted Operating Margin of at least 15.0%, which is superior to many peers. Furthermore, its sales pipeline hit an all-time high of $3.7 billion in Q2 2025 (up 25% YoY), confirming strong underlying demand for its differentiated AI offerings. The conservative guidance simply hides the slow ramp-up of the AI business, creating a powerful entry point before the pipeline converts to realized revenue. Analysts see significant implied upside (roughly 83% from current levels) as the market recognizes the operational efficiency and the inevitable conversion of its AI and digital product focus.

Pitch Summary:
For example, one of the more immediate consequences of businesses and government entities increasingly trusting AI with their data is security risk. An area of cybersecurity that may see greater demand because of AI is a niche known as identity and access management, which is Israel-based CyberArk’s specialty. Humans who access an organization’s computer systems are assigned digital identities, which include their login credentials and define what parts of the system they have permission to access. Computer hardware and software also have digital identities—called “machine identities”—which must be protected. Securing human and machine identities involves managing various digital mechanisms, such as application programming interfaces (APIs), which are sets of rules that allow one software to talk to another; digital certificates, which act like virtual identification cards with embedded signatures; and electronic keys that grant access to specific data or functions. CyberArk’s software platform helps organizations manage digital identities and monitor them for suspicious or unauthorized activity. This is important because AI is creating a new class of machine identities in the form of autonomous and semi-autonomous AI “agents” capable of performing tasks and making decisions previously handled by humans. Already, the number of machine identities is on the rise: according to CyberArk, organizations on its platform had about 40 machine identities for every human identity last year—a ratio that has since doubled. CyberArk is also poised to benefit from the proliferation of so-called containers and microservices widely used by AI developers. Containers package everything an app needs to run (code, tools, libraries), while microservices focus on discrete functions such as authentication. The company also developed a suite of AI-powered tools called CORA AI that helps its identity-security platform analyze user behavior, detect risky activity, generate audit reports, and provide its clients actionable insights. Management has been a good steward of capital, using the company’s strong balance sheet and free cash flow to invest in products and strategic partnerships that position CyberArk to meet the security challenges created by AI.

BSD Analysis:
CyberArk is the undisputed, mission-critical leader in Identity Security, commanding a premium because its Privileged Access Management (PAM) platform is the ultimate defense against the most devastating cyberattacks. The entire thesis is built on its successful transition to a SaaS-based, AI-powered Identity Security Platform, offering clients massive operational efficiencies and cost reduction by eliminating infrastructure and operational overhead. This cloud-centric model is driving accelerating Annual Recurring Revenue (ARR) and high-quality subscription growth. CyberArk's moat is its specialized focus on securing privileged credentials (passwords, SSH keys, tokens) and establishing zero standing privileges—the highest-risk vector for attacks. The shift toward Agentic AI technology and the growing threat of quantum computing necessitate an immediate pivot to advanced identity security solutions, cementing CyberArk's role as an essential, non-discretionary software vendor. This is a core security software position that generates superior margins and provides vital protection against identity-related cyberattacks.

Pitch Summary:
We initiated a position in Boston Scientific, a leading medical device company specializing in stroke prevention for patients with atrial fibrillation. The recent U.S. Food and Drug Administration’s approval of a breakthrough heart rhythm device, along with continued momentum in stroke reduction products, position Boston Scientific for potential accelerated growth.

BSD Analysis:
Boston Scientific is a diversified medical device leader with strong momentum across cardiovascular, neuromodulation, and minimally invasive therapies. Its pipeline productivity has been impressive, with new products consistently gaining share and driving above-market growth. The company’s exposure to high-acuity, non-elective procedures gives it resilience even in macro slowdowns. Margin expansion continues as mix shifts toward higher-value cardiology and electrophysiology products. M&A remains a strategic weapon, and Boston Sci has a strong record of integrating tuck-ins. Regulatory hurdles exist, but execution has been excellent. It’s a high-quality medtech compounder with sustained innovation velocity.

Pitch Summary:
We initiated a position in Shopify, a global leader in e-commerce platforms that enables merchants to sell seamlessly online, in-store, and across social channels. Shopify’s intuitive, all-in-one platform supports rapid merchant growth and international expansion. With a strong track record of innovation, improving profitability, and a robust recurring revenue base, Shopify is potentially positioned to capture significant opportunity in the expanding global e-commerce market.

BSD Analysis:
Shopify remains the backbone of independent e-commerce, powering a massive global merchant base with tools that rival enterprise-grade systems. The company’s exit from logistics was painful but refocused the model on high-margin software and payments. Shopify’s monetization engine — subscription fees, payments, and merchant services — keeps compounding as GMV grows. The ecosystem advantage is huge: developers, apps, and thousands of partners make Shopify incredibly sticky. Competition from Amazon is real, but Shopify enables merchants to diversify away from marketplaces and own their brands. Profitability improvements show a more mature business emerging. Shopify is still one of the most powerful leverage plays on global retail digitization.

Pitch Summary:
During the quarter, we initiated a position in HubSpot, a leading, cloud-based customer relationship management (“CRM”) platform known for rapid innovation and strong growth. HubSpot has consistently expanded its customer base and increased adoption across marketing, sales, service, and content management. By moving beyond small and mid-sized businesses to attract larger enterprises, and with its user-friendly, all-in-one platform, HubSpot stands out as a compelling alternative to legacy CRM systems.

BSD Analysis:
HubSpot is the dominant CRM platform for SMBs, and its product expansion into service, operations, and commerce has made it a multi-hub ecosystem rather than just a marketing tool. Its go-to-market engine is among the best in SaaS, balancing freemium reach with scalable enterprise upmarket moves. International adoption keeps building as SMB digitization accelerates globally. HubSpot benefits from strong net retention as customers layer on more hubs over time. Competition from Salesforce exists, but Salesforce is too heavyweight for HubSpot’s core segments. The company continues to show margin improvement even while investing aggressively. This is a durable SaaS compounder with years of runway.

Pitch Summary:
RLH was introduced to Airo Group in early 2024 as the company was pursuing a SPAC transaction. Both the SPAC and Airo were actively seeking capital. We were impressed by Airo’s fundamentals — the company was EBITDA-positive, operating in a highly thematic sector (military-grade drones), and led by a capable management team. After conducting due diligence, we concluded that Airo could service debt on a standalone basis and that the SPAC merger had a high likelihood of closing. In the first quarter of 2024, RLH, alongside a group of co-investors we introduced, invested in both the SPAC sponsor and Airo directly through a structured bridge loan. RLH’s speed in conducting diligence, ability to quickly fund, and deep capital markets knowledge made us the right partner for a complex and time-sensitive transaction. By August 2024, Airo was prepared to complete its SPAC transaction. However, due to unfavorable market conditions, the capital raise fell short of expectations. After discussions with management, Airo pivoted toward a traditional IPO, which we believed would better reflect the company’s value and raise more capital. As part of this pivot, we restructured our investment to include incremental economics — additional equity consideration and interest — to reflect the added duration and complexity. In June 2025, Airo completed its IPO, raising $69 million in a deal led by Cantor Fitzgerald and BTIG. The offering priced at $10 and was well received, with shares rising 140% in the first day of trading. The decision to delay and pursue a regular-way IPO ultimately maximized value for all stakeholders. As of July 22, 2025, based on the current trading price of $23.84, RLH generated a total net return of 322% and a net multiple on invested capital (MOIC) of 4.2x. Please note that our shares are subject to a six-month lockup and are marked using a conservative liquidity discount.

BSD Analysis:
Cameco is the unassailable, vertically integrated nuclear fuel cycle powerhouse, poised for a massive, structural earnings inflection driven by the global nuclear renaissance and supply tightening. The company's technological and resource dominance is unchallengeable, spanning mining (tier-one assets) to fuel services and its stake in Westinghouse. This dominance is translating to massive profitability, with Gross Margin expanding to 36.3% by late 2025, driven by higher prices from long-term, fixed-price contracts. The stock is a high-conviction bet on the multi-decade supercycle in nuclear power, secured by a fortress balance sheet with a minimal 0.15 Debt-to-Equity ratio and $779 million in cash.

Pitch Summary:
Consumer staples were middle of the pack, as Greencore Group was among the top 10 contributors, offset by Nomad Foods and Barry Callebaut, which languished in the bottom 10. U.K.-based Greencore advanced as ingredient and packaging inflation eased, lifting operating margins. The company announced two long-term sandwich and salad contracts with major U.K. grocers, while also making a bid for Bakkavor.

BSD Analysis:
Greencore is a deep-value, high-leverage turnaround play that is the undisputed market leader in the non-cyclical, high-volume UK convenience food sector. The entire investment thesis is a leveraged bet on a massive, synergistic acquisition: the company is finalizing the recommended acquisition of Bakkavor Group plc, which will create a £4 billion revenue giant with unparalleled scale and market dominance. The company has already completed a rigorous internal stabilization, driving Adjusted Operating Profit up 28.9% and reducing its balance sheet risk, with Net Debt-to-EBITDA at a low 0.4x. The merger is expected to deliver annual run-rate pre-tax cost synergies of at least £80 million by the third year, creating a clear arbitrage opportunity as the combined entity is severely undervalued. Greencore is a high-conviction bet on successful post-merger integration, where the realized synergies will force a major re-rating of the stock.

Pitch Summary:
SK Hynix Inc. was the top overall portfolio contributor, capitalizing on its leadership in high-bandwidth memory (HBM) chips and disciplined DRAM supply. The South Korean semiconductor supplier had record-breaking first-quarter results, highlighted by a 323% year-over-year surge in net profit and an operating margin of 42%.

BSD Analysis:
Jazz remains a focused specialty-pharma operator with a stable sleep-disorder franchise and an emerging oncology engine. Its mix of orphan drugs and targeted therapies gives it pricing durability. The key challenge is navigating the post-Xyrem landscape while scaling newer assets. Cash flow is solid enough to support pipeline development. Partnerships help de-risk R&D. Jazz isn’t a moonshot biotech — it’s a durable, cash-generative operator. Upside comes from executing on oncology and neurology expansion.

Pitch Summary:
Elsewhere in industrials, Japanese trading house Marubeni Corp. reported good earnings and stable guidance, while diversifying with the addition of a pharma platform. The company also announced a significant share buyback program, signaling management’s confidence in Marubeni’s value and commitment to shareholder returns.

BSD Analysis:
Marubeni is a modernized sogo shosha — a diversified Japanese trading house that has quietly transformed into a disciplined global capital allocator. The company’s exposure spans food, energy, commodities, infrastructure, and consumer assets, giving it a unique blend of cyclicality and stability. Unlike earlier eras, Marubeni now prioritizes ROE, portfolio optimization, and shareholder returns, making it far more investor-friendly. Commodity cycles still drive earnings swings, but structural improvements in governance and capital allocation have raised baseline profitability. Its global footprint positions it well for energy-transition projects, resource bottlenecks, and emerging-market capex. Marubeni’s valuation typically trades below intrinsic quality due to conglomerate complexity — which is exactly where the opportunity lies. It’s a diversified industrial-financial operator built for the next decade, not the last one.

Pitch Summary:
Health care holdings detracted most from portfolio performance. UnitedHealth Group’s stock dropped to multi-year lows due to a sharp spike in medical costs and the company’s withdrawal of its full-year guidance. The surprise resignation of CEO Andrew Witty and his replacement by former CEO Stephen Hemsley further rattled the market. Ongoing regulatory scrutiny, including a Department of Justice investigation into Medicare Advantage billing practices, added to the negative sentiment surrounding the stock.

BSD Analysis:
UnitedHealth’s dual-engine model — insurance scale plus Optum’s healthcare services — makes it the most powerful profit generator in U.S. healthcare. Optum’s move into physician groups and advanced analytics creates operating leverage others can’t match. Managed care is politically sensitive, but UNH has survived every regulatory storm intact. Cash generation is astonishingly consistent. The business gets better with scale, not worse. It’s the anchor stock for healthcare exposure. Hard to beat, harder to replace.

Pitch Summary:
Consumer staples were middle of the pack, as Greencore Group was among the top 10 contributors, offset by Barry Callebaut and Tyson Foods, which languished in the bottom 10. U.K.-based Greencore advanced as ingredient and packaging inflation eased, lifting operating margins. The company announced two long-term sandwich and salad contracts with major U.K. grocers, while also making a bid for Bakkavor.

BSD Analysis:
Greencore is the UK’s largest producer of convenience foods and ready-made meals, supplying major grocers and foodservice players. It operates in a low-margin, high-volume world, where efficiency is everything. Recent turnaround progress has stabilized margins and rebuilt investor confidence. Cost inflation remains a challenge, but pricing actions and operational improvements are sticking. Demand for convenience food remains resilient even in weak macro conditions. Greencore is a grind-it-out operator with real self-help upside. Underappreciated and improving.

Pitch Summary:
SK Hynix Inc. was the top overall portfolio contributor, capitalizing on its leadership in high-bandwidth memory (HBM) chips and disciplined DRAM supply. The South Korean semiconductor supplier had record-breaking first-quarter results, highlighted by a 323% year-over-year surge in net profit and an operating margin of 42%.

BSD Analysis:
SK hynix is one of the global leaders in memory — DRAM and NAND — and the prime beneficiary of AI-driven HBM (high-bandwidth memory) demand. HBM is the hottest component in the AI supply chain, and SK hynix has a real technological lead. Memory is cyclical, but the AI supercycle is rewriting the demand curve. Margins swing wildly, but up-cycles are explosively profitable. Capex is heavy but necessary to defend share. SK hynix is high-beta AI infrastructure. This cycle could be one of the strongest in memory history.