Investment Pitches

Pitch Summary:
Flutter Entertainment (NYSE:FLUT) is another high-quality compounder, contributing 1.8% to overall returns. Flutter’s US bookmaking business, operating under the FanDuel brand, continues to grow rapidly, while its more mature UK operations keep surprising to the upside. When the Fund first acquired Flutter in 2021, we believed it could outpace consensus growth expectations. As the market increasingly catches up, the position is likely to make way for others over time.

BSD Analysis:
FanDuel’s leading share in U.S. online sports betting and iGaming provides a powerful engine for top-line growth and operating leverage as state legalization expands. Internationally, Flutter’s diversified portfolio of brands and markets helps smooth regulatory and macro volatility. The company is increasingly converting revenue growth into free cash flow, which can be deployed to debt reduction and selective M&A. The NYSE listing has broadened its investor base and improved liquidity, helping narrow the valuation discount to U.S. gaming peers. Regulatory risk, taxation, and potential advertising restrictions remain key overhangs, but the structural growth in digital wagering supports a positive long-term view.

Pitch Summary:
MTU Aero Engines (XTRA:MTX) continued to surpass market expectations, adding 1.5% to Fund returns this year. With the GTF engine issues nearing resolution, the business has upgraded earnings forecasts multiple times over the past year. Combined with healthy end markets and a valuation that remains very attractive relative to its commercial aerospace peers, MTU continues to be a core Fund holding.

BSD Analysis:
MTU’s leverage to the high-margin engine aftermarket provides resilient cash flows and attractive long-term growth as global flight hours trend higher. Near-term noise around Pratt & Whitney GTF issues has weighed on sentiment, but compensation mechanisms and accelerated shop visits can bolster service revenue over time. The company maintains a strong balance sheet and disciplined capital allocation, supporting investment in next-generation technologies and shareholder returns. Valuation remains below many aerospace peers on forward P/E and EV/EBITDA metrics, despite comparable or better growth prospects. As GTF concerns abate and earnings revisions move higher, the stock has meaningful re-rating potential.

Pitch Summary:
After sitting on the watchlist for years, the April market selloff gave us the chance to buy Comfort Systems USA (NYSE:FIX) at an attractive price. It provides mechanical and heating, ventilation and air conditioning (HVAC) services across industrial and institutional markets. Comfort is especially well-positioned to benefit from the surge in data centre construction, where demand for large-scale, technically complex HVAC systems is growing rapidly. Few players have the national footprint, project expertise and local execution capacity that Comfort offers, making it a go-to contractor for mission-critical infrastructure builds. Since the April 2025 low, the share price has already risen about 80%, contributing 1.5% to Fund returns. While significant profits have been taken, Comfort Systems remains a high-quality operator in a structurally growing market, and a strong example of disciplined watchlist management paying off.

BSD Analysis:
Comfort’s core HVAC contracting business is gaining from secular trends in data center buildout, reshoring of manufacturing, and upgrades to energy-efficient systems. The company has historically generated solid returns on capital, supported by a disciplined acquisition strategy and strong project execution. With a robust backlog and growing mix of complex, higher-margin projects, earnings visibility has improved despite the cyclical nature of construction. The stock’s sharp rebound reflects improved expectations, but valuation remains reasonable versus its growth and margin profile. Key risks include project-cycle volatility and execution on large data center work, but the franchise’s scale and reputation offer a durable edge.

Pitch Summary:
Wise (LSE:WISE) contributed 1.4% to returns this year as it continued scaling its cross-border payments platform profitably. Wise operates one of the lowest-cost global money transfer networks, and its transparent pricing sells itself to individuals and small businesses. Over the past year, it onboarded nearly six million new customers and grew revenue by 15%, despite cutting take rates quite sharply. It also maintains strong operating margins—higher, in fact, than management considers ideal. Unlike many fintech peers, Wise is capital-light, generates free cash flow, and focuses on building long-term infrastructure targeting profitable growth rather than growth at any cost. That discipline is increasingly being recognised, not only in the numbers but also in the company’s plan to move its primary listing to the US. Management sees a disconnect between Wise’s global profile and the valuation discount applied by UK markets, and also sees large business opportunities in the US that could be accelerated by a local listing. The move reflects a broader trend: high-growth, globally relevant UK businesses looking for deeper capital markets and better peer comparisons. Wise is now the fourth such stock we’ve owned in recent years, and it’s been a productive pond.

BSD Analysis:
Wise benefits from a structural shift toward low-cost digital cross-border payments, with its scale and proprietary infrastructure allowing it to undercut banks while still earning attractive margins. Strong customer growth, high engagement, and increasing adoption of multi-currency accounts support durable revenue visibility. The business converts a significant portion of revenue into free cash flow, which can fund product expansion and potentially shareholder returns over time. A US primary listing could broaden the investor base and close part of the valuation gap with faster-growing fintech peers. Regulatory risk and competition remain, but Wise’s unit economics and network effects provide a clear competitive edge.

Pitch Summary:
Japan’s labour market is also changing. A shrinking workforce, rising wages and a shift away from lifetime employment are pushing large corporations to modernise HR systems and embrace mid-career hiring. That’s creating a fertile environment for Visional (TSE:4194), an HR technology company offering platforms for recruitment and workforce management. Despite its short tenure in the portfolio, Visional has already made a meaningful contribution. Its two core platforms, BizReach (Japan’s leading direct recruiting site for high-income professionals) and HRMOS (a cloud-based HR suite), serve over 16,000 paying clients and are building a sticky ecosystem across HR workflows. It’s exactly the kind of capital-light, high-margin software business that we like. Growth has been consistent, margins strong, and management disciplined in reinvestment. For a business compounding earnings at around 20%, the valuation still looks undemanding. Visional has all the ingredients of a long-term compounder, and the broader structural tailwinds in Japan are only just beginning. Visional is now a top 10 holding in the Fund.

BSD Analysis:
Visional is levered to structural change in Japan’s labor market, where mid-career mobility and digital recruitment are replacing legacy hiring practices. Its dual-platform model combines high-value executive job matching with workflow software, creating data advantages and high switching costs for enterprise customers. Revenue growth north of 20% with strong gross margins suggests substantial operating leverage as the business scales. The balance sheet is robust, allowing continued investment in product and marketing without financial strain. While competition from global job platforms is a risk, local market understanding and regulatory familiarity provide meaningful advantages. Given its growth profile, the shares appear attractively valued relative to global HR tech peers.

Pitch Summary:
Two more of the Fund’s top contributors this year were Japanese software businesses benefiting from the country’s accelerating digital transformation. OBIC Business Consultants (JP:4733), a longer-term holding, is a conservative, highly profitable software company specialising in accounting and payroll solutions for small and mid-sized businesses. It added 1.0% to returns as it continued delivering steady, software-driven growth with strong margins. Shift (JP:3697), a newer addition, is Japan’s leading independent provider of software testing and quality assurance services. It’s a capital-light business scaling quickly in a fragmented market, and it contributed 1.1% to Fund performance before being sold.

BSD Analysis:
OBIC BC is a classic Japanese software compounder, with sticky customers, high switching costs, and a track record of stable double-digit operating margins. Its focus on mission-critical accounting and payroll systems for SMEs translates into low churn and recurring maintenance revenue. As Japanese corporates modernize IT infrastructure under governance and efficiency pressure, OBIC’s installed base can be upsold to newer modules and cloud-based offerings. The balance sheet is typically net cash and the company has a history of shareholder-friendly dividends, although buybacks have been modest. Valuation tends to be rich on traditional metrics, but the durability of cash flows and underpenetrated cloud migration justify a long-term premium.

Pitch Summary:
Japanese software, in particular, has been fertile foraging ground. The country still lags global peers in cloud adoption, with many businesses relying on outdated infrastructure and legacy systems. As digitisation gathers pace and governance standards improve, the runway for high-margin, capital-light growth companies is expanding. Separately, the government is pushing hard on cashless payments, aiming to lift penetration to 80% from around 40% today, well below the 60-70% levels already reached in most Western markets. E-commerce is similarly underdeveloped, accounting for just 9% of retail sales versus 15% in the US and more than 25% in the UK. These structural shifts are creating multi-year tailwinds for a small but growing group of domestic software champions, including one of the Fund’s holdings, GMO Payment Gateway (JP:3769), a leading Japanese payments processor serving both online and offline businesses.

BSD Analysis:
GMO-PG sits squarely in the slipstream of Japan’s push toward cashless payments and e-commerce penetration, giving it a long runway for transaction volume growth. Its asset-light, high-margin model converts incremental revenue into strong free cash flow, supporting reinvestment and potential shareholder returns. With a dominant position among domestic online merchants and increasing omni-channel capabilities, competitive moats are deepening as scale advantages grow. The stock typically commands a premium multiple on EV/sales and EV/EBITDA, but that is justified by structurally higher growth and returns on capital relative to traditional financials. Key watchpoints include competitive pressure from global processors and regulatory shifts, but secular adoption trends remain a powerful tailwind.

Pitch Summary:
Pason Systems (TSX:PSI) detracted 1.5% as North American onshore rig counts declined through much of the year. This business, which provides instrumentation and data systems to the oil and gas drilling sector, remains highly cash generative and enjoys strong pricing power. But its sensitivity to rig counts and investment cycles was clear in 2025. While long-term demand for efficient wellsite automation hasn’t gone away, the cyclical downturn dragged on sentiment and earnings.

BSD Analysis:
Pason remains a high-margin, asset-light oilfield services name with strong competitive positioning in drilling data and analytics, and its cash generation through cycles has historically supported dividends and balance-sheet strength. The recent downturn in U.S. land rig activity is cyclical, not structural, and Pason’s exposure to efficiency-focused customers should allow it to participate early in any activity recovery. Its net cash balance sheet and modest capex needs mean free cash flow conversion is typically high, giving optionality for dividends, buybacks, or selective M&A. While earnings are volatile, the stock often trades at single-digit EV/EBITDA and mid-teens P/E at cycle troughs, which can be attractive entry points. Investors should watch rig count inflection and international expansion as key catalysts for a re-rating.

Pitch Summary:
Apparel retailer American Eagle operates two core brands: its namesake American Eagle (AE) brand and its Aerie brand. The company has survived multiple fashion cycles with proven cost flexibility and currently boasts the financial position to weather the ongoing disruption while returning capital to shareholders. Beyond the current environment, we expect its revenues and operating margins to grow over the next few years. Tariff uncertainty at the beginning of the year resulted in an attractive discount to our estimate of intrinsic value, providing us with an opportunity to establish a position.

BSD Analysis:
American Eagle is a mall-based apparel brand that has survived longer than most skeptics expected by staying relevant with younger consumers and leaning into denim and casualwear. The real gem is Aerie, its intimates and loungewear brand, which has been a standout growth engine. The company has done a decent job of managing inventory, cutting back on promotions when possible, and investing in digital. Fashion risk is always there, but American Eagle tends to avoid going too far out on trend limbs. Margins ebb and flow with traffic and discounting, yet the balance sheet is relatively solid. It’s not a secular growth rocket, but it’s far from dead mall baggage.

Pitch Summary:
Asure Software is a growing provider of cloud-based human capital management (HCM) solutions to primarily small- and medium-sized businesses in the US. Its platform helps organizations manage their workforces through integrated payroll, HR, tax management and benefits solutions. We believe the company should withstand any macroeconomic headwinds relatively well and is poised to generate near-term scale in its business, which should contribute to improved profitability and cash-flow generation. Further, Asure not only has the potential to generate attractive organic growth, but it could also position itself as an attractive acquisition target. Under the leadership of an experienced, motivated management team, we believe this is a high-quality, small and growing software-as-a-service company, trading at a compelling discount to our estimate of intrinsic value.

BSD Analysis:
Asure is a small-cap HR and payroll software provider targeting small and mid-sized businesses. It competes in a crowded space but focuses on compliance-heavy niches like tax credits and time tracking where expertise matters. The company has grown via acquisitions and organic efforts, building a broader suite over time. The challenge is balancing integration and innovation while keeping churn low. If Asure can deepen its relationships and cross-sell more modules, margins and growth can both improve. This is a classic small SaaS story: a lot of operating leverage if they get it right, a lot of competition if they do not. Sizing and time horizon matter.

Pitch Summary:
Strawberry Fields REIT is a skilled nursing and health care facilities-focused REIT with a simple business model: it owns skilled nursing facilities under long-term leases with modest annual rent increases. Looking forward, we expect skilled nursing to benefit from a growing population of individuals aged 80 and above in the US. Although the company is small, it has a solid balance sheet with retained free cash flow for acquisitions. We anticipate that it should be able to grow steadily in the period ahead while improving its equity and debt cost of capital and driving operating efficiency. While we acknowledge material cuts to Medicaid funding could pose a risk, we believe the longer-term outlook and the current valuation are sufficiently attractive to warrant a position.

BSD Analysis:
Strawberry Fields is a small healthcare REIT focused mainly on skilled nursing and similar facilities, often in secondary and tertiary markets. It collects rent from operators who themselves face labor, reimbursement, and regulatory pressures. That makes underwriting tenant quality and lease structures absolutely critical. When things go well, the REIT enjoys steady, inflation-linked cash flows from high-yielding assets. When they go badly, property-level stress and operator failures can create real headaches. This is not a pristine, trophy-asset REIT; it’s a higher-yield, higher-risk vehicle. Any position here should reflect the complexity of the skilled nursing ecosystem.

Pitch Summary:
Fortune Brands Innovations is a leading manufacturer of building products — including kitchen and bathroom faucets, entry doors and others — for both the new single-family housing construction and the repair and remodeling markets. We expect the repair and remodeling market to recover in the period ahead, supported by structural tailwinds including aging housing stock, high home equity levels and a growing trend toward homeowners’ choosing to remain in their homes as they age. With its portfolio of top brands and exposure to new adjacencies — such as residential water-leak detection by Flo by Moen, one of its brands — we believe Fortune Brands is well-positioned to outperform its end markets. We consequently capitalized on a current valuation that we believe meaningfully undervalues the company’s long-term growth potential and initiated a position in Q2.

BSD Analysis:
Fortune Brands is a focused home and security products company, with exposure to doors, cabinets, plumbing fixtures, and related categories. Housing turnover and renovation cycles drive the top line, which means it can be cyclical. But the company leans into brands and innovation that allow for pricing power when demand is there. Recent portfolio moves have simplified the business and sharpened focus on higher-margin, more differentiated segments. As rates eventually normalize and housing activity picks up, Fortune Brands is well-placed to benefit. In the meantime, cost control and mix management are key. It’s a classic “better house in a rough neighborhood” play within housing-related stocks.

Pitch Summary:
AZZ is a leading North American metal coating solutions provider that we believe is poised to capitalize on multiple secular drivers — including infrastructure development, manufacturing reshoring and material conversion. We also believe AZZ should benefit from the trend toward de-verticalization, whereby functions and services previously performed by vertically integrated companies are separated to allow companies to operate more efficiently while relying on partners. As shares traded during the quarter at an attractive discount to our estimate of intrinsic value, we capitalized on the opportunity to initiate a position.

BSD Analysis:
AZZ provides galvanizing and coating services, along with electrical systems and components, primarily for infrastructure and industrial end markets. Hot-dip galvanizing is a classic picks-and-shovels business for metal structures needing corrosion protection. As infrastructure spending and grid investments ramp, AZZ’s services and products become more in demand. The company has been reshaping its portfolio to focus on higher-margin, more defensible businesses. Cycles in industrial capex still matter, but the structural need to maintain and upgrade infrastructure gives a decent baseline. AZZ is not a high-flyer, but it’s a solid way to play the less glamorous side of infrastructure growth.

Pitch Summary:
UTZ Brands is the largest independent pure-play salty snack food company in the US with a portfolio including potato chips, pretzels, cheese snacks and others. Its popular brands include Utz, Zapp’s, On the Border and Boulder Canyon. The company operates in a historically attractive segment with top-line growth potential. Further, its geographic distribution expansion supports growth even as some food categories have softened recently, and it has an attractive margin-expansion opportunity via supply chain optimization and earnings-improvement potential via debt reduction. Given UTZ’s attractive positioning relative to its peer group and historically, as well as relative to the inherently stable and growing snack-food sector, we capitalized on the opportunity to introduce a position to a high-quality company trading at an attractive discount.

BSD Analysis:
UTZ is a pure-play salty snack company riding the shift toward branded, flavor-forward chips and pretzels. The category is growing faster than many other packaged foods, and UTZ has carved out strong regional positions it’s now taking national. Distribution gains and innovation are the key drivers, supported by strategic partnerships with big retailers. Input cost inflation has pressured margins at times, but UTZ has shown it can manage pricing and mix over a full cycle. The balance sheet is not spotless, yet the underlying cash generation is decent. If management keeps executing the “from regional favorite to national brand” playbook, there’s room for multiple and earnings expansion. This is a snack story with real legs, not a tired legacy brand.

Pitch Summary:
Insperity provides human resources (HR) and business solutions primarily to US-based small- and mid-sized businesses. Shares were pressured in the quarter as higher-than-expected health care costs impacted the company’s insurance book, and the company’s worksite employee count grew at a tepid rate. Our confidence in the company’s execution across multiple fronts — including its Workday partnership, ability to grow worksite employees, manage its health insurance book of business and improve margins — has increasingly weakened. Further, the potential for AI disruption is a longer-term risk to Insperity’s worksite employee base. With these factors pressuring the share price and limited visibility into a meaningful turnaround over the course of our investment horizon, we exited our position during the quarter, redeploying the proceeds to more attractive risk-reward opportunities.

BSD Analysis:
Insperity remains one of the most resilient ways to play the U.S. SMB economy, offering outsourced HR, benefits, and compliance services that small firms struggle to handle alone. Its professional employer model creates sticky relationships and recurring fees, making customer churn extremely low. The wildcard is always healthcare claims — medical loss variability can swing margins even when the core business is fine. Over a full cycle, though, Insperity’s pricing discipline and scale allow it to normalize those fluctuations. The company continues to add value through tech-enabled services while preserving the high-touch model clients appreciate. As regulation gets more complicated, SMBs increasingly turn to outsourced solutions rather than juggling point tools. Insperity isn’t glamorous, but it’s a quietly compounding services business in a category competitors can’t easily commoditize.

Pitch Summary:
Ducommun is a critical Tier 1 and Tier 2 supplier of advanced material aerostructures and electrical components to the defense and commercial markets. Shares rose in the quarter as the company is experiencing and expects continued strength as aerospace original equipment production grows. Further, the demand outlook among its customers remains robust, and while commercial volumes have been pressured amid ongoing destocking, management anticipates growth should accelerate in the medium term, which should, in turn, contribute to margin expansion in the period ahead.

BSD Analysis:
Ducommun is a small-cap aerospace and defense manufacturer making structural components, electronics, and engineered systems. It wins by being sticky in programs that last for years, often as a sole or key supplier. As commercial aerospace recovers and defense budgets remain robust, Ducommun has a multi-year backlog to work through. Operational execution and margin improvement are the key levers, as the company integrates past acquisitions and streamlines plants. The balance sheet is manageable for its size, and management has been pushing toward higher-value, more engineered products. Liquidity is not huge, so the stock can move hard on news. It’s a classic under-the-radar supplier leveraged to long-cycle aerospace and defense.

Pitch Summary:
Nuclear fuel and services provider Centrus Energy is well-positioned to benefit from the revitalization of nuclear energy industry growth following four executive orders issued by President Trump in May, which many have cited as the most pro-nuclear actions of the last 50 years. Centrus’s position as a nuclear fuel broker with burgeoning enrichment capabilities makes it an essential company for our domestic energy independence.

BSD Analysis:
Centrus is a niche but increasingly interesting player in the nuclear fuel supply chain, especially around advanced enrichment capabilities. As governments wake up to the need for secure, non-Russian uranium enrichment, Centrus’ technology and capacity become more strategically valuable. The company has a mix of legacy contracts and newer, higher-value work tied to advanced fuels. The business is small and policy-sensitive, which means earnings can be volatile and dependent on government behavior. But if nuclear power gets real political tailwinds, Centrus is one of the few ways to play the fuel side directly. This is not a widows-and-orphans stock, but the optionality is significant.

Pitch Summary:
FTI Consulting provides business advisory services to manage change, mitigate risk and resolve disputes. It has a robust, balanced services lineup spanning procyclical (e.g., M&A advisory work), countercyclical (e.g., restructuring advisory) and acyclical (e.g., forensic accounting and litigation consulting) engagements. The company has improved its scale, geographic reach and service breadth over the past decade or so as the CEO and management team have successfully seeded and grown service areas and geographies while generally reorienting the company’s culture toward organic growth. Near-term disruptions over the past several quarters — which we believe will prove to be largely noise in the long term — gave us an opportunity to initiate a position in what we consider a healthy, solid business run by a capable management team at a compelling price.

BSD Analysis:
FTI is the consulting firm that thrives when things go wrong — restructurings, disputes, investigations, and corporate crises. Its work is highly specialized, high-margin, and in constant global demand as regulation tightens and litigation grows more complex. The model is lean and people-intensive, but utilization stays strong because FTI operates in areas where in-house teams are rarely equipped. Unlike strategy consultants, FTI is plugged into the messiest, most time-sensitive problems, giving it steady pricing power. Results can be lumpy, but the long-term trajectory is upward because corporate complexity never reverses. The balance sheet is clean, capital returns are disciplined, and the brand is strong in every segment it plays in. FTI is a quiet, professional beneficiary of global disorder.

Pitch Summary:
Shares of industrial distributor WESCO rose amid a solid demand environment, particularly among data center customers. Long term, we expect WESCO to leverage its significant scale advantage to capture market share and improve margins. Further, the company is well-positioned to benefit from several secular tailwinds aside from data centers — all factors which the market has not yet fully appreciated.

BSD Analysis:
WESCO has turned itself into a critical infrastructure distributor powering the electrification, automation, and data-center build-out cycles. The Anixter acquisition transformed the company from a basic industrial wholesaler into a scale leader across electrical, utility, and communications networks. That scale shows up in better supplier terms, larger project wins, and deeper technical expertise. Secular trends like grid hardening, EV charging, and hyperscale data centers mean WESCO’s end-markets are more resilient than old-school industrial cycles. Integration has been smoother than expected, with margins steadily improving as synergies roll through. It’s still a cyclical business, but the mix now skews toward essential infrastructure rather than purely discretionary capex. WESCO is becoming a strategic partner to modernization efforts across the economy.

Pitch Summary:
On an individual holdings’ basis, top contributors to return in Q2 included Red Rock Resorts and WESCO. Red Rock Resorts, a casino operator controlling over half the Las Vegas locals market, has demonstrated the resilience of its business model via a strong start to the year. Coming into Q2, the valuation was attractive — and investors responded accordingly, giving a boost to shares.

BSD Analysis:
Red Rock is essentially the house casino operator for the fast-growing Las Vegas suburbs, a market with far better demographics and loyalty dynamics than the tourist-driven Strip. The company has leaned into premium locals properties where recurring visitation matters more than big-spend tourists, creating a more stable revenue base. New developments like Durango show Red Rock’s ability to build high-return assets without stretching the balance sheet. Population growth and high-income migration into the Vegas Valley are long-term demand tailwinds. The moat here is geographic and cultural — locals genuinely prefer Red Rock’s properties and reward them with repeat traffic. The company consistently returns capital and maintains disciplined expansion. It’s not a global gaming brand, but it’s one of the cleanest regional gaming stories with real structural growth.