Investment Pitches

Pitch Summary:
Spotify is a leading global audio streaming franchise with 675 million monthly active users. We believe its position in the supply chain is solid given a secular trend of fragmentation in the music industry as well as internal product and pricing initiatives. Spotify reported another set of strong earnings results, including 10% growth in monthly active users and 15% revenue growth. A recent court ruling against Apple should also benefit Spotify as it can now offer direct subscription options and more competitive pricing by linking users to its website, which bypasses Apple’s 30% commission on in-app purchases. Spotify has already reported conversions from its free- to premium-tier service meaningfully increased among Apple users.

BSD Analysis:
Spotify is proving its business isn’t a low-margin streaming grind — it’s becoming the operating system for global audio. Price hikes are sticking, ad monetization is scaling, podcasting is no longer a money furnace, and the marketplace model is boosting margins. User engagement is massive, churn is low, and the company’s personalization engine remains industry-defining. As Spotify layers on advertising, creator tools, and AI-driven content discovery, its economics get better — not worse. This is premium infrastructure for the audio world.

Pitch Summary:
iRhythm develops and markets the Zio, a wearable patch that monitors irregular heartbeats. Its advanced technology is well positioned for broad adoption as doctors and insurers push for earlier detection of atrial fibrillation to prevent strokes. Shares climbed after strong earnings, with 20% revenue growth and gross margins rising to 69% thanks to scaling and efficiency gains. Management also raised its forward guidance.

BSD Analysis:
iRhythm is the category killer in ambulatory cardiac monitoring — a medtech disruptor replacing bulky Holter monitors with Zio patches that cardiologists and patients actually prefer. Reimbursement noise hurt sentiment, but adoption keeps climbing because Zio produces better data, faster diagnoses, and happier doctors. Margins are recovering as scale increases, and iRhythm still has a long runway as arrhythmia prevalence rises with aging demographics. Once pricing stabilizes, this business snaps back hard. It’s a premium clinical-data platform masquerading as a device company.

Pitch Summary:
Among our top Q2 contributors were Babcock International, iRhythm and Spotify. Babcock is the second-largest supplier to the UK Ministry of Defense and the leading supplier and servicer to critical programs and infrastructure, such as nuclear submarines, ships and shipyards. After a series of major asset disposals, Babcock is predominantly a defense company, owning critical infrastructure and the largest nuclear-capable workforce. Babcock has a unique competitive advantage that will enable it to benefit from increasing defense spending. As a result, the company is earning numerous opportunities outside the UK. Furthermore, new management has stabilized the company by improving the balance sheet and implementing plans to deal with troubled contracts. The upshot should be improving margins over the next few years. In June, the company reported strong results, with 11% revenue growth, 17% operating profit growth and a backlog expansion to £10.4 billion.

BSD Analysis:
Babcock International is a high-stakes, military-industrial turnaround story, where a newly disciplined management team has successfully converted a massive balance sheet risk into a cash-compounding powerhouse. The entire thesis is built on an irreplaceable defense and nuclear moat. After years of pain, the firm is now fully deleveraged—net debt excluding leases is down 80% to just $textsterling 56}$ million and net debt/EBITDA is a tiny 0.2x. This financial cleanup has unlocked the earnings engine, with Nuclear revenue soaring 14% and Group underlying operating profit up 19%. The future is secured by a $textsterling 9.9}$ billion contract backlog and structural tailwinds from geopolitical instability driving defense spending. Management is on track to hit its upgraded medium-term target of ≥9% operating margin and ≥80% cash conversion, while aggressively buying back shares with surplus free cash. The stock is poised for a major re-rating, trading at a discount despite its pivotal role in the UK's nuclear submarine fleet and civil decommissioning programs.

Pitch Summary:
Historically, during tectonic computing shifts, the best investments throughout the cycle have typically been the technology leaders—whether it was IBM during the mainframe era, Intel and Microsoft during the PC era, Apple and Qualcomm during the smartphone era, or Amazon and Microsoft during the cloud computing era. We don’t see much reason to stray from the playbook for the era of accelerated compute. The highest margin businesses in semiconductors are NVIDIA and Broadcom, which are the technology leaders for AI infrastructure and the compute and the networking layers. NVIDIA leads in system computing, while Broadcom leads in ethernet networking and custom ASIC design (helping to make hyperscaler capital expenditure more efficient and conversely freeing up more budget for NVIDIA). Both are considered pivotal to the AI infrastructure build-out. We see a catalyst-rich path for both, NVIDIA as it accelerates its product roadmap and scales out its rack-level ecosystem, and for Broadcom as it begins to ramp its new Tomahawk 6 switch and as it hits a projected inflection point in new customer ASIC ramps from 2026–2028.

BSD Analysis:
Broadcom is the custom silicon king in the AI infrastructure race, leveraging an unrivaled $110 billion backlog to drive exponential growth. The core thesis centers on its role as the key ASIC supplier to hyperscalers like Google, Meta, and the newly signed OpenAI, securing a massive $10 billion order that validates its dominance in XPU accelerators. This focus on custom silicon is a structural advantage, as ASICs are more power-efficient and lower the Total Cost of Ownership (TCO) for the massive inference workloads that drive real-world AI services. Broadcom expects its AI semiconductor revenue to exceed 60% growth in fiscal 2026, positioning it to capture a critical portion of AI CapEx. The company's lead in high-speed networking and the high-margin VMware software division provide a crucial, stable revenue base, fueling a world-class 42.4% Free Cash Flow (FCF) margin. Trading at a justified premium given its growth profile and robust 65% EBITDA margins, Broadcom remains an indispensable, high-quality compounder.

Pitch Summary:
NVIDIA's Computing Architecture Is Helping Enable the Scale Up of Agentic AI NVIDIA’s new accelerated compute architectures have enabled the scale up of agentic AI by reducing the inferencing costs per token. The B200 and B300 introduce higher density high-bandwidth memory (HBM) to remove bottlenecks for large context windows. For context, the GB300 (which is currently in testing and in volume shipments to hyperscalers in 2H 2025) is almost 700X more efficient at inferencing than the Ampere chips that were in production in 2020–2021. NVIDIA’s management is emphasizing “lowest cost per inference token” as the design goal of new product launches. NVIDIA has demonstrated expertise in advancing the inferencing efficiency of its compute architecture, supported by an ambitious roadmap and accelerated product cadence that creates significant hurdles for competitors attempting to keep up. Following the debut of its Blackwell architecture in late 2024, the B300 (shipping in 2H 2025) is expected to deliver a 50% boost in inferencing efficiency with only a 10%–15% increase in system cost (ASP) versus the B200. This enhancement offers substantial performance-per-dollar advantages for hyperscalers building out large clusters over the next few years. The upcoming Vera-Rubin architecture in 2026 and Feynman in 2028 are both strategically designed to help optimize inferencing workloads, which we expect will further cement NVIDIA’s dominance. On top of the rapid hardware progress, NVIDIA's CUDA and TensorRT stack is also helping to boost inference throughput. “Rapid advancements in NVIDIA software algorithms boosted Hopper inference throughput by an incredible 5X in one year and cut time to first token by 5X,” stated NVIDIA CFO Colette Kress on the Q3 FY2025 earnings call.

BSD Analysis:
NVIDIA is the unassailable, high-margin kingmaker of the AI revolution, converting its technological dominance into a grotesque amount of cash flow. Its true moat is not just its GPUs, but the CUDA software ecosystem, which locks in every hyperscaler and AI lab with high switching costs that are virtually unbreachable. Bears continue to scream "AI bubble," but their argument is fundamentally flawed: the demand is sustained by the increasing complexity of models (like OpenAI's Q1 and Q3), which demand exponentially more compute intensity, confounding the "AI efficiency" bears. With triple-digit data center revenue growth and gross margins exceeding 70%, NVIDIA's premium valuation is utterly justified by its strategic position, cash generation, and multi-year backlog. The stock is a core holding for anyone looking for leveraged exposure to the trillions of dollars of value that AI is set to unlock.

Pitch Summary:
During the quarter we made a new investment in Informa PLC, the global leader in B2B live events. The company connects buyers and sellers in various industries, enabling business interactions, and disseminating knowledge across verticals. We believe Informa has built a strong, underappreciated moat around its core events business benefiting from network effects, scale, and process power since managing events with tens of thousands of attendees is not an easy endeavor. For example, some trade associations have reported incurring losses on their annual shows, while Informa enjoys ~30% margins. Well-run scale events build a brand and become "must-attend" franchises for industry participants. Informa owns and runs some of the most recognizable events globally, including the Monaco/Ft. Lauderdale Boat Shows, the Dubai Air Show, Cannes Lions, SuperReturn, BlackHat, and Money 20/20. The business has strong visibility and positive working capital dynamics. Often, next year's iteration of an event will be more than half pre-sold by the end of the current year's show, giving the company elevated levels of predictability and relatively low cyclicality. Informa has also carved out what we see as a generational opportunity in the Middle East, establishing JVs within both Saudi Arabia and the UAE. Attracting business travel is a core priority for both economies, and local governments are investing heavily in event venues that will support growth in B2B events for years to come. These JVs also allow Informa to bring new iterations of its existing and successful brands into the Middle East, underscored by Money 20/20 adding a Middle East show in Riyadh this fall. We expect more of Informa's marquee franchises to expand to the Middle East in short order. One insight we have derived from our investment in Live Nation and have applied here is that in a world that is becoming increasingly more digital, the value of high-quality live events should meaningfully increase to both exhibitors and attendees. We believe the company will accelerate revenue growth, particularly through its Middle East strategy, and compound earnings at a double-digit rate for many years, all while returning meaningful cash to shareholders through share repurchases and dividends and acting as the sole consolidator of the fragmented events industry. Despite these qualities, the stock trades at a mere 14x forward earnings multiple.

BSD Analysis:
Third Point's investment in Informa is based on the company's dominant position in B2B live events with an underappreciated competitive moat built on network effects, scale, and operational expertise. Informa operates marquee "must-attend" events like Monaco Boat Show, Dubai Air Show, and Money 20/20, generating 30% margins while competitors struggle with losses. The business model benefits from strong visibility with events typically more than half pre-sold by year-end, creating predictable cash flows and low cyclicality. The Middle East expansion through JVs in Saudi Arabia and UAE represents a generational growth opportunity, as both governments prioritize business travel and are investing heavily in event infrastructure. This geographic expansion allows Informa to leverage existing successful brands in new markets, as evidenced by Money 20/20's upcoming Riyadh show. The thesis is reinforced by the increasing value of high-quality live events in a digital world, drawing parallels to their Live Nation investment. Informa is positioned to accelerate revenue growth, compound earnings at double-digit rates, and act as the sole consolidator in the fragmented events industry while returning cash to shareholders. Despite these compelling fundamentals, the stock trades at only 14x forward earnings, suggesting significant undervaluation.

Pitch Summary:
During the quarter, we continued adding to a new long position in Casey's General Stores. At ~2,900 locations, Casey's is the third largest convenience store chain in the US by store count. More importantly, it is the fifth largest pizza chain in the country. It is a "boring" business to some, but there is an art to boring – we believe the returns and their consistency have been exceptional and stem from a quirky counter-positioning of the business. When a company chooses not to do the easy thing, it is often a powerful signal that something special is at work. Selling gas and cigarettes is easy. Selling fresh food at scale as successfully as Casey's is not. Figuring out food creates a powerful feedback loop – Casey's earns more profit dollars per visit, enabling them to price fuel at a discount to independent gas stations and pizza at a discount to competing QSRs. Consumers save on both purchases, and the result is a brand beloved by a loyal customer base, whose Net Promoter Scores look nothing like the rest of the industry. How has Casey's solved for food? We attribute their success to differentiated employee retention and approaching the business like a community-centric restaurant that consumers trust to feed their families. Annualized labor churn rates north of 100% have long plagued convenience stores – it is hard to retain employees, let alone incentivize them to sell perishables and run open air kitchens. Not so with Casey's. Their stores have 40% more staff than your typical gas station and they have used this as an opportunity to offer viable career paths on a store-by-store basis throughout rural America. We have eaten our fair share of Casey's brisket pizza, and in our store tours we were impressed by the consistency of quality and employee and customer loyalty that they have created at the store level. A recent test roll-out of chicken wings has seen high satisfaction scores and we believe the company is on its way to a system wide rollout of wings that has the potential to meaningfully increase sales densities. Casey's stock has performed well over the last ten years and is up over 30% this year alone; yet we believe the team from Des Moines is just getting started. The recent acquisition of 200 stores from Fike's marked their entrance into the South, and management has since commented that Texas alone could offer 2,000 more units (vs. today's national footprint of 2,900), reinforcing our belief that there are plenty of towns across the South that would love a Casey's. Our expectation is that this unit growth story is likely to play out more quickly than broadly expected given Casey's demonstrated ability to do accretive M&A. In the Fike's example, Casey's paid 11x headline EBITDA, but the pro forma multiple looks more like 7x when pizza is rolled out across the footprint. How many companies have the luxury of replicable, accretive M&A at EBITDA multiples that are half of its own trading levels? In Casey's we see a world class management team with a differentiated mousetrap and a decade of profitable growth ahead of them – whether they are labeled a restaurant or a gas station or a general store is semantics. As the company's slogan goes, "It's Not Crazy, it's Casey's!"

BSD Analysis:
Third Point's thesis on Casey's centers on its unique counter-positioning as a fresh food-focused convenience store chain that has solved the industry's fundamental labor and quality challenges. Casey's operates 2,900 locations and ranks as the fifth largest pizza chain in America, demonstrating its successful pivot from traditional convenience retail to food service. The company's competitive moat stems from superior employee retention (avoiding the industry's 100%+ annual churn) through 40% higher staffing levels and viable career paths in rural communities. This enables consistent food quality and customer loyalty reflected in industry-leading Net Promoter Scores. The food-first strategy creates a powerful economic flywheel where higher profit per visit allows Casey's to discount fuel and pizza prices, driving traffic and market share. Recent expansion into the South via the Fike's acquisition (200 stores) demonstrates management's ability to execute accretive M&A at attractive multiples - paying 11x EBITDA that drops to 7x post-pizza rollout. With Texas alone offering 2,000 potential new locations versus today's 2,900 national footprint, Casey's has a clear decade-long growth runway. The company's replicable M&A strategy at multiples half its trading level provides a sustainable competitive advantage in an otherwise fragmented industry.

Pitch Summary:
We initiated a position in Rocket Companies during the Second Quarter based on its transformative all-stock acquisition of Mr. Cooper. Rocket has been a persistent share gainer in the fragmented mortgage origination industry, with a 12% market share of refi originations and a 4% share of purchase originations. It has differentiated, industry-leading cost and time to originate, driven by its continuous reinvestment in technology and automation. While the average originator takes 45 days to close a refi loan, Rocket only takes 20 days – and that key metric continues to fall. In fact, over 50% of loans now close in less than 15 days. Mr. Cooper is the leading mortgage servicer, with 11% market share, making it over 50% larger than its next largest competitor. Much like Rocket in the origination space, Mr. Cooper has industry-leading cost-to-service that has fallen by ~50% over the last five years. These differentiated unit economics have allowed Mr. Cooper to be a primary beneficiary of MSR sales by cash-poor, subscale originators struggling to keep afloat in the current high-rate environment. We view the combination of Rocket and Mr. Cooper as a transformative, synergy-rich merger between two technology leaders in the otherwise parochial and cost inflationary mortgage industry. Combining the largest refi originator with the largest servicer will, we believe, enable pro forma Rocket to turn ecosystem unit economics on its head. Rather than an originator having to reacquire a customer in 5-7 years or a servicer having to reacquire the MSR, Mr. Cooper's servicing portfolio could feed Rocket's refi origination machine, leveraging Rocket's ~85% refi recapture rates which are already >3x the industry average. On top of this compelling combination, enter AI. Rocket has begun to realize the benefits of automating workflows – from income verification to document submission, to credit score verification – in ways that set it apart from others in the industry. De-bottlenecking these monotonous administrative chores should enable the company to improve both throughput (applications processed per officer) and conversion (applications that result in a mortgage) and pass through a portion to the end consumer to drive further market share gains.

BSD Analysis:
Third Point initiated a position in Rocket Companies based on its transformative acquisition of Mr. Cooper, creating a vertically integrated mortgage ecosystem. The thesis centers on combining the largest refi originator (Rocket, 12% market share) with the largest servicer (Mr. Cooper, 11% market share) to create powerful synergies. Rocket's technology-driven competitive advantage is evident in its 20-day loan closing time versus the industry average of 45 days, with over 50% of loans now closing in under 15 days. The merger enables a closed-loop system where Mr. Cooper's servicing portfolio feeds Rocket's origination machine, leveraging Rocket's exceptional 85% refi recapture rate that is 3x the industry average. AI automation across workflows from income verification to credit scoring should further improve throughput and conversion rates. The combination addresses the fragmented mortgage industry's cost inflation problem through superior unit economics, with Mr. Cooper's cost-to-service falling 50% over five years. This creates a sustainable competitive moat in an otherwise commoditized industry while positioning the combined entity to gain market share through superior customer experience and pricing.

Pitch Summary:
The author argues that Monolithic Power Systems ($MPWR) is being overly penalized by the market despite accelerating exposure to AI-driven enterprise demand. They believe MPWR is poised to regain share at NVIDIA while benefiting from a rapidly growing ASIC power business, which could drive enterprise data revenues up 40–50% YoY in the back half. The author also sees early signs of stabilization in MPWR’s non-enterprise analog segments, which consensus appears to be discounting too harshly. Long-term, they view MPWR as a structural share gainer with an owner-operator culture and decades-long track record of taking share from peers like Texas Instruments. At ~$580/share, the stock is framed as pricing in an unrealistic loss of AI opportunity, with fair value estimated around $922. The author is cautiously adding, citing strong long-term tailwinds across AI, robotics, EVs, and power-intensive compute.

BSD Analysis:
The analog and power semiconductor industry structurally rewards execution, application-specific design wins, and long customer qualification cycles, favoring incumbents with deep system-level expertise. MPWR’s competitive position is strongest in high-performance power management for data center, AI, and ASIC applications, where efficiency and density are mission-critical and switching costs are high. Secular AI capex expansion supports sustained above-market growth, while diversification across hyperscaler and custom silicon customers reduces single-customer risk over time. Short-term sentiment has been pressured by peer results and fears of NVIDIA share loss, but multi-sourcing dynamics often expand total content rather than eliminate suppliers. The key risk is that non-AI analog demand remains weaker for longer, delaying operating leverage and justifying a lower multiple. However, consensus appears to embed conservative assumptions across both AI and legacy segments simultaneously. If enterprise data becomes a majority of revenue, MPWR’s growth and margin profile would warrant premium valuation versus traditional analog peers. In that scenario, current pricing understates the durability of MPWR’s long-term earnings power.

Actual Post Content:
I just get the sense that $MPWR will get some share of NVDA and they also have a very fast ASIC business, perhaps will actually grow faster than NVDA. I think both ASIC and NVDA will drive the enterprise segment to a beat this Q in perhaps over the next few quarters as AI capex appears to not be slowing down. I am sure this thesis applies to many other names but MPWR seems to not be optimistically reflecting this opportunity which I think it should. There's a possible bottoming out in their non enterprise Analog business as well. I like it here and think it's been a bit discarded. Cautious because of the $TXN results and some other analogs but overall I like the management and I like the LT story. The NT looks really strong and 2H pick-up from ASICs is growing by my estimation at 40-50% YoY. If this continues then the Enterprise Data segment is going to be 50% or more of the business in a few years. There is upside if they capture more $NVDA share than expected, and just as they lost share I feel that they could also capture it. MPWR's story is one of excellence and gradual market share wins over decades led by an owner operator. They have taken share from $TXN and others over years of execution. Even though they lost exclusivity in NVDA and had some hiccups, I feel that it's a little too penalizing at this valuation and consensus estimates are baking in a conservative growth rate for the non Enterprise Data segments. My range for fair value is 922/sh for 25% upside. I want to add more because the LT story with robots and EV's and AI chips is so strong and my general thought is that MPWR will likely be top market share in several growth end markets. Not adding too much though because of recent tepid results from a few competitors. Buying some $mpwr here. It's a gamble but estimating $nvda revs/profits roughly 15%. This move implies a full loss of $nvda. Given the many generations of partnership between these two companies, and the need for nvda to have multiple partners, this sell off seems overdone a bit. Buying some here. What am I missing on $MPWR? At 580/sh, it seems to be pricing a pretty steep discount on the non-AI segment and the AI segment. The company has demonstrated an ability to grow 1.5-2x faster than the industry, why exactly would all of this change just based on the edgewater report? Perhaps the stock was in decline prior to the edgewater report?

URL: https://x.com/Fierce__beast/status/1950574656336847077

Pitch Summary:
Alibaba is an archetypal "complexity discount" trade where the market over-focuses on China macro headwinds, ignoring the durability of its core e-commerce and cloud segments. The bull case targets a $300/ADS valuation within three years, driven by Taobao-Tmall Group (TTG) share stabilization and an inflection in Alibaba Cloud, which is currently dominating the Chinese AI infrastructure market.

BSD Analysis:
Alibaba is an archetypal “complexity discount” trade where the market anchors on China macro, prior governance scars, and messy non-core assets, while the two segments that matter—TTG and Cloud—quietly reassert durability. TTG’s bear case has been perpetual share bleed and margin compression, but the more plausible path is share stabilization plus take-rate expansion as Alibaba imports the Amazon ads/Prime playbook into an ultra-low starting take rate, turning platform power into monetization rather than just GMV. The current delivery subsidy war is a cyclical, self-limiting cash burn that likely fades as regulators lean against malinvestment, when it does, TTG earnings power should re-emerge and the multiple should stop pricing “permanent promo hell.” Cloud is the higher-quality asset: accelerating growth, rising margins, and a strategic moat in a geopolitically insulated market where foreign hyperscalers are de facto share donors. Net cash and ongoing buybacks provide real downside support while waiting for the SOTP to simplify in investors’ heads. The main risk is that competition keeps forcing structurally lower TTG profitability or Beijing policy reopens uncertainty, but the setup offers asymmetric rerating torque if Cloud growth and TTG monetization both stay on track.

Pitch Summary:
Shoei is a dominant Japanese manufacturer of premium motorcycle helmets, holding an estimated 60% global share of the high-end market. The company is a high-quality niche compounder currently trading at a cyclical trough following the normalization of the post-COVID "outdoor boom." With fit-and-finish attributes that drive intense brand loyalty and ROICs historically ranging from 40% to 70%, Shoei is positioned for a significant re-rating as global inventories stabilize.

BSD Analysis:
Shoei represents a classic "quality mispriced" setup where a cyclical volume dip is being mistaken for structural decline. Despite a ~12% sales volume decline in FY 2025 due to channel destocking, the company’s pricing power remains a "margin machine," with net sales and operating income actually growing for the eighth consecutive year through 2024. The business model is anchored by vertically integrated Japanese manufacturing, which ensures quality control that low-cost competitors cannot replicate. As of January 2026, the global motorcycle helmet market is projected to expand at a 6.76% CAGR through 2034, with Shoei maintaining its "premium moat" even in a sluggish consumer environment. Valuation has compressed to ~16x P/E, a level inconsistent with a fortress balance sheet (net cash) and a management team that consistently raises wages (12 years running) and maintains a ~50% payout ratio. As destocking concludes, Shoei’s incremental margins will likely reassert, driving a multiple reversion toward historical averages and offering substantial upside for patient capital.

Pitch Summary:
A disappointing close to what was once an exciting investment, plagued by too many roadblocks along the way. Our initial investment in Sequoia should have been a simple thesis with the market capitalisation backed by a significant amount of cash following the Morrison divestment, and a short 3-5 year payback period for the remaining enterprise value. The simple way to achieve this was to return excess cash to shareholders by way of special dividend immediately following the sale, but ego got in the way causing further mediocre capital allocation.
The first of a string of problematic developments was the commencement of proceedings against Tim McGowen, the vendor of Informed Investor, inclusive of the business better known as ShareCafe. These proceedings sought the recovery of $3.5m from Tim arguing falsified information in breach of various warranties and provisions of the Share Purchase Deed. This ended up being a total waste of time and money that likely eroded further ShareCafe goodwill as months later the case was resolved with no admission of liability.
The second wave called an extraordinary general meeting led by Michael Glennon (Glennon Capital), Tony Jones, and Brent Jones (Founding family of Interprac) in an attempt to dethrone Garry Crole and other members of the board. The requisitionists asserted perhaps rightly that acquisitions and stock trading activity were destroying value. At the time I had a personal call with both Michael and Garry upon which neither side were fully convincing. I decided I was more fearful of the knock-on effect of Jones leaving Interprac and made a divestment prior to the meeting. Following a successful outcome for Garry I re-entered in a much smaller position.
The last is growing controversy with Interprac and the actions of a small minority of their authorised representatives, Venture Egg Financial Services, Miller Wealth Group, & Rhys Reilly. These AR’s were running a concerning sales tactic for the First Guardian Master Fund and Shield Master Fund which involved persuading Australians to set up an SMSF and invest a major part of their wealth within these funds. Some great reporting from the Australian reveals that client money also made its way without consent towards Euree, a recent minority investment made by Sequoia run by James Hird. Long story short, there was wrongdoing by a multitude of parties (the funds, trustees, ratings agency, platforms, licensee, advisers etc.) which ASIC is now investigating having also launched a large scale media campaign as of late.
The whole story smells a lot like Dixon advisory collapse that occurred just a few years ago. This involved the setup of SMSFs for clients which invested into the US Masters Residential Property fund which also happened to lose money. In a stroke of unethical genius E&P placed their Dixon subsidiary into administration early and transferred the majority of their advice business across the other license, dodging significant liability and eventually shifting it onto the industry through the compensation scheme of last resort (CSLR). There is recent precedent that the CSLR may cover the bill for a good portion of the recent collapse too and even imitation with Libertas.
In the interest of space Sequoia was one of our smallest holdings and the combination of potential liability and perennial mismanagement that has led to cumulative reported losses since our investment have weighed on me, leading to capital re-allocation. Fortunately our time with Sequoia yielded a positive 12% IRR and added 2.2c to our unit price. It is not often our decisions get immediate feedback having avoided a drawdown later in the month as another telling article claiming that the Shield Master Fund lent the Morrison settlement to get it across the line.

BSD Analysis:
Sequoia is building an integrated platform for Australian financial advisers, blending dealer services, investment products, compliance, and wealth management tools. As advisers leave the big banks, independent licensees like Sequoia are gaining share. The company’s diversified revenue streams help absorb volatility in any single segment. Execution on acquisitions and integration will determine margin expansion. Regulatory uncertainty remains a risk but also fuels the migration toward independent networks. Sequoia is a small but growing platform in a structurally shifting wealth ecosystem. If scaled properly, operating leverage could be significant.

Pitch Summary:
FSA is an acronym for “Fox Symes Australia”, derived from their long-held position as Australia’s largest provider of personal insolvency services. In the years since COVID-19, this market has dried up considerably and FSA has leaned heavily into non-conforming lending, amplified through the acquisition of Azora Finance in 2021, a small area of the market with more credit risk that requires balancing higher yet competitive lending rates with good underwriting.
The company was founded in early 2000 and has three executive directors all appointed near inception. Tim Maher (34% shareholder) has a background in banking at ANZ and in an accounting firm as a still registered CPA (Alan Kohler did a great interview with Tim back in 2017). Deborah Southon (10%) has experience in government and community services. Cellina Chen (1%) is the current CFO and holds a fellowship with CPA Australia. Stewardship under these individuals has proven to be conservative having never reported a loss as a listed company.

Before we discuss lending, it is worthwhile discussing the reasons for this decline in personal insolvency, observe the below data from the Australian Financial Security Authority (AFSA):

[Chart referenced on page 5]

This decline has been consistent since 2009 and relief has come to Australians from not only a prolonged period of loose credit, but two catalysts in particular. The first, was changes to the Bankruptcy Act in 2017 which introduced regulation of debt agreement administrators. The second, further debt agreement reforms in 2019. Despite turmoil during COVID-19, many creditors loosened collections enforcement and the government provided major financial support in the form of Jobkeeper and Cash Flow Boost, incentives which were administered by accountants like myself. Whilst household stress remains high, FSA seems to simply view their services business as a potential corollary of distress, rather than a main focus since they placed services in hibernation during COVID-19. Below you will see the changing profit mix over time.

[Profit table reproduced in the file]

Moving onto the lending business, the company has shifted focus to a rapid expansion of their loan book, on track to having doubled it between 2021 and 2025 almost entirely from fixed-rate lending. This has not translated to the bottom line due to rising interest rates impacting the margin on their loans, the particulars being fixed-rate loans written at lower rates early on and elevated losses/arrears across the board as creditors nationwide tighten collections once more.
As mentioned previously, FSA operates predominately in the non-conforming loan market (ie. borrowers who can’t borrow from a bank), but, has recently moved toward originating near-prime loans for cars. Similarly, asset finance origination is mostly higher risk sole-traders that want to buy equipment with interesting products such as a no-doc product for businesses that have had an ABN for >2 years and a documented process for 6-24 months.
More than half of the loan pools are fixed-rate loans, with a weighted average lease expiry of 3.5 years. Do the date math and you will see that the company should be on track to start seeing rapid operational gearing starting in fiscal year 2026 provided that rates either stabilize or better yet, continue to fall as seen recently. There has also been a $250m securitisation consisting of predominantly asset finance loans issued to fixed income investors. Of crucial importance to shareholders is that all (except a sliver of unsecured personal loans) warehouse facilities are non-recourse in nature and secured against tangible assets being homes, cars, and equipment.

[Loan pool table reproduced in the file]

For reasons outlined above, Hurdle Rate expects to benefit from operational leverage in the short to medium term along with accompanying growth in fully-franked dividends. If the market ascribes additional value, great! Although based on our purchase price I don’t think we need it to do well if margins expand and loan pools continue to grow. The company has their own target of achieving loan pools of $1.3b, profit of $25m, and an ROE in excess of 25%.

BSD Analysis:
FSA Group is a specialist Australian financial-services firm focused on debt solutions, personal insolvency, and lending. Its countercyclical components — debt agreements and insolvency — provide revenue stability in downturns. The lending segment adds growth but increases credit risk, requiring disciplined underwriting. Regulatory frameworks can shift quickly, but FSA has decades of experience navigating policy changes. Cash flow is typically strong due to low capital intensity. The business is unique, niche, and often misunderstood by generalists. It’s a hybrid countercyclical financial that benefits when economic stress rises.

Pitch Summary:
First quarter results were once again weak on the surface, but an accelerated transition from license to subscription revenues has continued to dilute revenue growth. Revenue grew 4% on the same quarter last year noting that software subscriptions added ¥529m in new revenue relative to ¥680m lost software installation revenue. The latter if sold under one-off purchase contracts would be several fold higher. Recurring revenue continues to grow into a greater proportion of the business and will yield improved margins once the transition slows.
On a profitability basis the company has invested in recruiting a significant number of new graduates in the quarter which has increased expenses leading to lower profit. A deliberate choice constituting an upfront investment.

BSD Analysis:
MJS provides accounting, tax, and ERP software for Japanese SMEs and accounting firms — a niche with exceptionally sticky demand. Japan’s slow adoption of cloud software creates a long runway for modernization, and MJS is well positioned to capture that shift. The company’s distribution through tax accountants forms a powerful channel moat. Recurring revenue continues rising as customers migrate to subscription models. Margins are healthy, and the balance sheet is rock solid. Growth is steady, predictable, and rooted in essential business processes. MJS is a classic Japanese software compounder hiding in plain sight.

Pitch Summary:
Unaudited results revealed slight outperformance of guidance with revenue and pre-tax profit up 13% and 30% respectively. Critically, the adviser base increased by 4% (3.5% organic) in the financial year and FUM within the iQ portfolios increased by 40% noting that the IconIQ wealth and super platforms are still in the early days of commercialisation.

BSD Analysis:
Centrepoint Alliance provides licensing, compliance, and business services to Australia’s financial-advisory community, benefiting from regulatory complexity that pushes advisers toward professional networks. The company’s recurring revenue model offers visibility and defensiveness. Growth comes from adviser recruitment and deeper monetization of existing practices. Regulatory shifts remain the biggest risk but also drive consolidation — which Centrepoint can exploit. Operating leverage should improve as scale increases. The business generates strong cash relative to its size. This is a consolidation and compliance infrastructure play inside wealth management.

Pitch Summary:
The strategy consulting business reported 1st half revenue growth of 35% (17% organic) with consistent margins. With its recent uplisting to the main market of the LSE it is well positioned to attract greater interest from institutional investors. The company comments that “The Board remains confident that results for full year FY 2025 will be in line with market expectations” which implies quite significant margin contraction compared to the prior year. Given their history of exceeding expectations, this could merely be management of expectations given economic uncertainty around tariffs and the like, which may impact client service necessitation.

BSD Analysis:
Elixirr is a high-performance consulting firm positioned as a challenger to traditional global consultancies, focusing on strategy, digital transformation, and innovation. It wins by being faster, more entrepreneurial, and less bureaucratic. Growth has been exceptional, both organically and through small, bolt-on acquisitions. Margins remain strong due to premium pricing and lean structure. Client relationships deepen quickly because Elixirr often works on high-impact transformation projects. The company scales by adding expert partners rather than building bloated pyramids. This is a sleek consulting growth story with an impressive execution record.

Pitch Summary:
I had the pleasure of speaking with Shrutisha Morris for the first time in July. I came out of that meeting having bedded in respect for what Shru has to offer the business.
Perhaps of most importance is that Shru has brought in a fresh commercial view to the business which has materialised in several ways already. Take for example, the company has always been underrepresented in certain areas and has only just recently embraced collaboration with partners in return for a share of revenue. In June the company started referring work to a “well-known” tax business which should bring a nice source of referral revenue to the group.
The full year report was very pleasing, marking a return to what I would consider normal M&A volumes measured over a whole year, despite being concentrated in October due to vendor behaviour to ‘beat the budget’. DR Solicitors contributes remarkably well to revenue, profit, and capital efficiency after stripping out intangible assets.

“We constantly seek to buy new businesses that meet three criteria. First, they must earn good returns on the net tangible capital required in their operation.”
~ Warren Buffett, Berkshire Hathaway 2019 Shareholder Letter

In thousands of GBP

DSW DR Solicitors Combined
Network Revenue 24,418 1,426 25,844
License Income 3,539 844 4,383
Revenue Share 14.5% 59.2% 17.0%
Net Profit 636 348 984
Segment Tangible Equity 2,897 166 3,063
Return on Tangible Equity* 22.0% 503.1% 32.1%

* ROTE for DR Solicitors has been annualised

The key difference to each model is that DR is responsible for sourcing work for its consultant lawyers and bills it on their behalf. By comparison, DSW supports partners to scale their client base and bills them (not clients) quarterly. Whilst the profitability of DR is huge, client acquisition is centralised and unless they can expand this beyond the reach of vendors (Nils Christiansen & Daphne Robertson) there may be limits to how scalable DR can be in comparison to DSW. In our conversation, Shru noted that she was about to appoint a rainmaker to drive delivery for the DR business and take the pressure off Daphne to generate workflow.
Shru told me the rationale on the acquisition of DR was predominately to acquire an established legal platform which will allow them to continue with consultants but also allow for the future appointment of legal licensees more in line with their traditional model, addressing scalability.
Looking out, results still exclude 7 months worth of DR operations which will contribute meaningfully to 2026 results, and an Autumn budget may bring rise to another period of buoyancy in the M&A market keeping productivity strong in the corporate finance part of the business. Recruitment will continue to be my primary focus for long-running value creation, but, value is contingent on maintaining a lean cost base and continuing to use capital wisely.

BSD Analysis:
DSW Capital operates a network-based professional services model in corporate finance, tax, and accounting, leveraging a capital-light franchise approach. Its consultants operate with autonomy, creating strong incentives and scalability. The firm benefits from the shift toward flexible, decentralized professional services platforms. Economic cycles influence deal volumes, but the model remains structurally profitable. Cash generation is strong due to minimal capex. Execution depends heavily on partner recruitment and retention. This is a boutique professional-services compounder with attractive economics.

Pitch Summary:
During the quarter we made a new investment in Informa PLC, the global leader in B2B live events. The company connects buyers and sellers in various industries, enabling business interactions, and disseminating knowledge across verticals. We believe Informa has built a strong, underappreciated moat around its core events business benefiting from network effects, scale, and process power since managing events with tens of thousands of attendees is not an easy endeavor. For example, some trade associations have reported incurring losses on their annual shows, while Informa enjoys ~30% margins. Well-run scale events build a brand and become "must-attend" franchises for industry participants. Informa owns and runs some of the most recognizable events globally, including the Monaco/Ft. Lauderdale Boat Shows, the Dubai Air Show, Cannes Lions, SuperReturn, BlackHat, and Money 20/20. The business has strong visibility and positive working capital dynamics. Often, next year's iteration of an event will be more than half pre-sold by the end of the current year's show, giving the company elevated levels of predictability and relatively low cyclicality. Informa has also carved out what we see as a generational opportunity in the Middle East, establishing JVs within both Saudi Arabia and the UAE. Attracting business travel is a core priority for both economies, and local governments are investing heavily in event venues that will support growth in B2B events for years to come. These JVs also allow Informa to bring new iterations of its existing and successful brands into the Middle East, underscored by Money 20/20 adding a Middle East show in Riyadh this fall. We expect more of Informa's marquee franchises to expand to the Middle East in short order. One insight we have derived from our investment in Live Nation and have applied here is that in a world that is becoming increasingly more digital, the value of high-quality live events should meaningfully increase to both exhibitors and attendees. We believe the company will accelerate revenue growth, particularly through its Middle East strategy, and compound earnings at a double-digit rate for many years, all while returning meaningful cash to shareholders through share repurchases and dividends and acting as the sole consolidator of the fragmented events industry. Despite these qualities, the stock trades at a mere 14x forward earnings multiple.

BSD Analysis:
Informa is a high-quality, high-margin B2B services giant whose stock is a conviction bet on the secular growth of specialist human connection and data monetization. The core thesis is driven by the post-pandemic resurgence of its Live B2B Events, which delivered 8.5% underlying revenue growth in H1 2025. The company's unique moat is its ability to own and monetize niche, essential B2B brands (like Money 20/20) across global growth markets (India, UAE, Saudi Arabia). This is generating exceptional profitability: the Adjusted Operating Margin hit 28.4% in H1 2025, underpinned by strong underlying growth and ongoing AI Data Licencing Agreements. Informa is a high-conviction play on the non-cyclical, structural need for professional knowledge and connectivity.

Pitch Summary:
During the quarter, we continued adding to a new long position in Casey's General Stores. At ~2,900 locations, Casey's is the third largest convenience store chain in the US by store count. More importantly, it is the fifth largest pizza chain in the country. It is a "boring" business to some, but there is an art to boring - we believe the returns and their consistency have been exceptional and stem from a quirky counter-positioning of the business. When a company chooses not to do the easy thing, it is often a powerful signal that something special is at work. Selling gas and cigarettes is easy. Selling fresh food at scale as successfully as Casey's is not. Figuring out food creates a powerful feedback loop - Casey's earns more profit dollars per visit, enabling them to price fuel at a discount to independent gas stations and pizza at a discount to competing QSRs. Consumers save on both purchases, and the result is a brand beloved by a loyal customer base, whose Net Promoter Scores look nothing like the rest of the industry. How has Casey's solved for food? We attribute their success to differentiated employee retention and approaching the business like a community-centric restaurant that consumers trust to feed their families. Annualized labor churn rates north of 100% have long plagued convenience stores it is hard to retain employees, let alone incentivize them to sell perishables and run open air kitchens. Not so with Casey's. Their stores have 40% more staff than your typical gas station and they have used this as an opportunity to offer viable career paths on a store-by-store basis throughout rural America. We have eaten our fair share of Casey's brisket pizza, and in our store tours we were impressed by the consistency of quality and employee and customer loyalty that they have created at the store level. A recent test roll-out of chicken wings has seen high satisfaction scores and we believe the company is on its way to a system wide rollout of wings that has the potential to meaningfully increase sales densities. Casey's stock has performed well over the last ten years and is up over 30% this year alone; yet we believe the team from Des Moines is just getting started. The recent acquisition of 200 stores from Fike's marked their entrance into the South, and management has since commented that Texas alone could offer 2,000 more units (vs. today's national footprint of 2,900), reinforcing our belief that there are plenty of towns across the South that would love a Casey's. Our expectation is that this unit growth story is likely to play out more quickly than broadly expected given Casey's demonstrated ability to do accretive M&A. In the Fike's example, Casey's paid 11x headline EBITDA, but the pro forma multiple looks more like 7x when pizza is rolled out across the footprint. How many companies have the luxury of replicable, accretive M&A at EBITDA multiples that are half of its own trading levels? In Casey's we see a world class management team with a differentiated mousetrap and a decade of profitable growth ahead of them - whether they are labeled a restaurant or a gas station or a general store is semantics.

BSD Analysis:
Casey's is an unassailable, high-growth convenience store giant whose stock is a conviction bet on its dominant rural position and its high-margin food-service strategy. The core thesis is driven by its Inside Sales segment—which includes high-margin prepared food and dispensed beverages—which is the engine for profit dollar growth, driving an impressive ∼41.2% Inside Margin. The company is executing a ruthless growth plan, adding a record 270 stores in FY2025, the largest expansion in its history, and is on track to add 500 new stores by FY2026. This disciplined expansion and successful shift to high-margin food offerings is translating to the bottom line, with EBITDA hitting $1.2 billion and management targeting 8%–10% annual growth. Casey's is a high-quality compounder leveraging its rural focus and superior execution to deliver outsized returns.

Pitch Summary:
We initiated a position in Rocket Companies during the Second Quarter based on its transformative all-stock acquisition of Mr. Cooper. Rocket has been a persistent share gainer in the fragmented mortgage origination industry, with a 12% market share of refi originations and a 4% share of purchase originations. It has differentiated, industry-leading cost and time to originate, driven by its continuous reinvestment in technology and automation. While the average originator takes 45 days to close a refi loan, Rocket only takes 20 days and that key metric continues to fall. In fact, over 50% of loans now close in less than 15 days. Mr. Cooper is the leading mortgage servicer, with 11% market share, making it over 50% larger than its next largest competitor. Much like Rocket in the origination space, Mr. Cooper has industry-leading cost-to-service that has fallen by ~50% over the last five years. These differentiated unit economics have allowed Mr. Cooper to be a primary beneficiary of MSR sales by cash-poor, subscale originators struggling to keep afloat in the current high-rate environment. We view the combination of Rocket and Mr. Cooper as a transformative, synergy-rich merger between two technology leaders in the otherwise parochial and cost inflationary mortgage industry. Combining the largest refi originator with the largest servicer will, we believe, enable pro forma Rocket to turn ecosystem unit economics on its head. Rather than an originator having to reacquire a customer in 5-7 years or a servicer having to reacquire the MSR, Mr. Cooper's servicing portfolio could feed Rocket's refi origination machine, leveraging Rocket's ~85% refi recapture rates which are already >3x the industry average. On top of this compelling combination, enter AI. Rocket has begun to realize the benefits of automating workflows - from income verification to document submission, to credit score verification - in ways that set it apart from others in the industry. De-bottlenecking these monotonous administrative chores should enable the company to improve both throughput (applications processed per officer) and conversion (applications that result in a mortgage) and pass through a portion to the end consumer to drive further market share gains.

BSD Analysis:
Rocket Companies is a high-beta, high-risk mortgage technology pure-play whose stock is a leveraged bet on the eventual, inevitable decline in interest rates. The core moat is its status as a non-bank mortgage origination leader, leveraging its Rocket Mortgage brand and proprietary technology to capture market share. The company's stock is currently trading at a steep discount, penalized by the cyclical low in mortgage origination volume. Rocket is a high-conviction bet that its operating leverage will drive a massive earnings inflection the moment interest rates fall and refinancing volumes surge.