Investment Pitches

Pitch Summary:
MidCap Financial Investment Corporation (MFIC) is currently trading at a significant discount to its net asset value (NAV), presenting a potential opportunity for investors. The company has maintained a high dividend yield of 11.17%, which is well-covered by its net investment income. However, the rising nonaccrual balance and the potential sale by its external manager, Apollo Global Management, pose risks. The company's NAV has been declining, which could indicate a value trap despite the attractive discount. The dividend was downsized earlier in the year, reflecting potential challenges in sustaining payouts. Overall, while the dividend is secure, the ongoing NAV weakness suggests a cautious approach.

BSD Analysis:
MFIC's financial health is under scrutiny due to its increasing nonaccrual loans, which have risen significantly compared to the previous year. This trend aligns with broader industry challenges faced by BDCs, as seen with peers like Blackstone Secured Lending Fund. The company's strategy of share repurchases has provided some support to its NAV, but not enough to offset losses from investments. The potential sale of MFIC by Apollo Global Management could lead to strategic shifts, impacting future performance. Investors should monitor the company's credit quality and leverage, as these factors will be crucial in determining its ability to maintain dividend payouts and recover its NAV.

Pitch Summary:
Fervo Energy is positioned to capitalize on the growing demand for clean energy, driven by its innovative approach to geothermal power. The company has secured significant agreements, including a major deal with Google for up to 3 GW of geothermal capacity. Fervo's modular GeoCluster approach allows for efficient scaling and cost management, making it attractive to high-credit offtakers. Despite current financial losses, the company's strong pipeline and strategic partnerships suggest a promising future. The recent advancements in drilling technology, such as MIT's MMW drilling, could further enhance Fervo's capabilities and reduce costs. Overall, Fervo's unique positioning in the geothermal sector and its strategic alliances make it a compelling investment opportunity.

BSD Analysis:
Fervo Energy's leadership, with backgrounds in oil and gas drilling, provides a strong foundation for overcoming the technical challenges of geothermal energy extraction. The company's focus on modular development and strategic partnerships with industry giants like Google and Southern California Edison highlight its potential to secure future business. While the upfront costs of geothermal energy remain high compared to solar and gas, the rapid advancements in AI-assisted science and drilling technology could accelerate cost reductions. The company's ability to secure non-dilutive financing and its healthy balance sheet further support its growth trajectory. However, the dependency on Google's capex and the nascent stage of the industry present risks that investors should consider.

Pitch Summary:
Gulf Keystone Petroleum (GKP) is navigating a challenging environment due to geopolitical tensions in the Kurdistan Region of Iraq, which have led to a temporary suspension of operations at its Shaikan field. Despite reaching a production peak of over 44,000 bopd in early 2026, the company has suspended its production guidance and capital expenditure plans. The company's long-term success is tied to the stability of agreements between the Kurdistan Regional Government and the federal Iraqi government, which remain fragile. While GKP has a debt-free balance sheet and declared a $12.5 million interim dividend, the risks associated with regional security and infrastructure volatility are significant. The company's ability to resume operations and secure consistent export payments will be crucial for its future performance.

BSD Analysis:
Gulf Keystone Petroleum's strategic position in the Shaikan field offers substantial reserves and potential for high margins. However, the company's exposure to geopolitical volatility and the fragile regional infrastructure poses significant risks. The recent operational suspension highlights the unpredictable nature of the environment in which GKP operates. The company's flexible cost base and liquidity are strengths, but the ongoing disputes over payment arrears and legal authority between regional and federal governments add layers of complexity. Investors should be cautious, as the potential for high returns is counterbalanced by the high-risk nature of the investment, akin to a lottery ticket.

Pitch Summary:
Takasago Tekko is trading at a low valuation of approximately 9.5x LTM earnings and 7.7x NTM earnings. The company owns valuable real estate, including the Itabashi Factory Land, which is conservatively valued at ¥8 billion but could be worth significantly more based on market comparisons. The company has been consistently profitable for over a decade and has reduced its net debt significantly, now holding net cash. Despite being under the radar and illiquid, the stock offers a 4% dividend yield, making it an attractive hold while waiting for potential value realization.

BSD Analysis:
The Itabashi Factory Land is located in a prime logistics hub in Tokyo, with recent comparable transactions suggesting a much higher valuation than the conservative estimate used. The company's strategic location and the potential for redevelopment into a logistics facility present significant upside. However, the stock's illiquidity and the steel industry's historical value trap nature pose risks. The presence of major shareholders like Nippon Steel and Mitsui limits activist involvement, but their stake could also facilitate strategic real estate redevelopment. Overall, the undervaluation of the company's assets provides a compelling investment opportunity.

Pitch Summary:
Procter & Gamble (PG) is a pre-eminent global consumer products company whose share price has underperformed the overall market following tepid earnings growth since the Covid-19 "pantry loading" years. Earnings growth has been negatively affected by sluggish sales, very competitive pricing, and cost pressures from inflation and tariffs. PG remains an innovative company in our view, with best-in-class management that should continue to deliver solid, consistent earnings growth. We view the recent share weakness as an opportunity to invest in an industry leader at a very attractive price. At our initial purchase price of $140, PG traded at the lower end of its 10-year average P/E multiple and offered a 3.0% dividend yield. Like ADP, PG is a dividend aristocrat, having increased its dividend for over 68 years. Both ADP and PG should provide relatively stable earnings even in challenging economic environments.

BSD Analysis:
Matrix initiated a position in Procter & Gamble following underperformance driven by post-COVID normalization challenges. The company faces headwinds from sluggish sales growth, competitive pricing pressure, and elevated costs from inflation and tariffs. However, Matrix views these as temporary cyclical issues rather than structural problems, emphasizing P&G's innovation capabilities and best-in-class management team. At $140 per share, the stock trades at the lower end of its 10-year P/E range while offering a 3.0% dividend yield. P&G's 68-year dividend growth streak demonstrates exceptional capital allocation discipline and cash flow consistency. The fund manager believes this represents an opportunity to acquire a defensive consumer staples leader at an attractive valuation, with the expectation that earnings growth will normalize as current headwinds subside.

Pitch Summary:
Automatic Data Processing (ADP) is a leader in the business of administering payroll, group health insurance, business insurance, workers' comp plans, retirement plans, and compliance for large and small businesses. These administrative functions are critical to a business's operations, and the company has a very high client retention rate. The company's stock price has declined approximately 30% over the past year on concerns that artificial intelligence will disrupt its business and a slowing labor market. ADP has a long history of increasing earnings and dividends. At our initial purchase price of about $215, the shares were trading at the lower end of their historic P/E multiple, 18x forward earnings, and at the higher end of their dividend yield at 3.2%. ADP has increased its dividend for over 50 consecutive years. We believe the share price will rebound strongly when the company demonstrates that the fears about AI's disruption to its business are exaggerated.

BSD Analysis:
Matrix added ADP to the Dividend Income portfolio following a 30% decline driven by AI disruption fears and labor market concerns. The investment thesis rests on ADP's mission-critical business functions and exceptionally high client retention rates, suggesting strong competitive moats. The company's 50+ year dividend growth streak demonstrates consistent cash generation and shareholder-friendly capital allocation. At $215 per share, ADP trades at 18x forward earnings—the lower end of its historical range—while offering a 3.2% dividend yield at the higher end of its range. Matrix believes AI disruption fears are overblown given the sticky nature of payroll and HR administration services. The combination of defensive business characteristics, attractive valuation metrics, and dividend aristocrat status makes this an appealing defensive growth play for the current uncertain environment.

Pitch Summary:
We also started a partial position in Nike, a premier athletic shoe and sports apparel company. The company's share price has fallen sharply due to weak sales in China, a strategic misstep toward direct-to-consumer sales that has hurt long-standing relationships with wholesale partners, and competition from newer brands. After several years of poor results, the company brought in a new CEO in 2024 to repair its relationships with global retailers and restore its image as a sports-focused company. The company has cautioned that there are ongoing challenges from tariffs, consumers buying lower-cost alternatives, and high inventory levels. The stock is down more than 65% from its 2021 high of $179, as its earnings declined from $3.56 per share to an estimated $1.55 in the year ending 8/26. Our interest was piqued when we saw significant insider buying of stock at prices below $60. The stock has pulled back from our initial buys, and when cash is available, we expect to continue to slowly add to our position in the company. We believe the turnaround at Nike will take time, but the risk/reward at the current price is very attractive.

BSD Analysis:
Matrix initiated a position in Nike as a turnaround play following a dramatic 65% decline from 2021 highs. The company faces multiple headwinds including weak China sales, damaged wholesale relationships from direct-to-consumer strategy missteps, and increased competition from newer brands. Earnings have collapsed from $3.56 to an estimated $1.55 per share, reflecting operational challenges including tariff impacts and high inventory levels. However, the fund sees encouraging signs in the new CEO's efforts since 2024 to repair retailer relationships and refocus on sports positioning. Significant insider buying below $60 provided additional conviction for the investment thesis. Matrix acknowledges this is a long-term turnaround story requiring patience, but believes the current risk/reward profile is compelling given the brand's historical strength and new management's strategic direction.

Pitch Summary:
As mentioned above in our Q2 outlook, the software sector blew up in the quarter. After a careful review of the sector's leading companies, we initiated a small position in Intuit, a leading U.S. financial software and data-driven platform serving consumers, small businesses, and accounting/tax professionals. It is best known for its TurboTax business. Intuit's share price declined from over $800 in 2025 to the low $400's. We started our position near the end of the quarter at approximately $425 per share. AI poses a threat to some software businesses, but we believe Intuit has a loyal customer base and will adapt to technological change. The company has an "ecosystem" advantage: workflows embedded in customers' financial lives (tax, accounting, payroll, payments, credit/financial offers) are efficient and discourage switching to another system. At 17x forward earnings, we believe it is very attractively priced for a company that has grown its earnings at a double-digit rate.

BSD Analysis:
Matrix initiated a position in Intuit after the software sector experienced significant declines due to AI disruption fears. The fund manager views the 47% price drop from over $800 to the low $400s as creating an attractive entry point. The investment thesis centers on Intuit's ecosystem advantage, where integrated financial workflows create high switching costs for customers across tax, accounting, payroll, and payment services. At 17x forward earnings, the valuation appears compelling for a company with a history of double-digit earnings growth. The manager believes Intuit's loyal customer base and ability to adapt to technological change will help it navigate AI-related disruption better than peers. This represents a classic value opportunity where temporary sector fears have created a disconnect between price and intrinsic value.

Pitch Summary:
Procter & Gamble (PG) is a pre-eminent global consumer products company whose share price has underperformed the overall market following tepid earnings growth since the Covid-19 "pantry loading" years. Earnings growth has been negatively affected by sluggish sales, very competitive pricing, and cost pressures from inflation and tariffs. PG remains an innovative company in our view, with best-in-class management that should continue to deliver solid, consistent earnings growth. We view the recent share weakness as an opportunity to invest in an industry leader at a very attractive price. At our initial purchase price of $140, PG traded at the lower end of its 10-year average P/E multiple and offered a 3.0% dividend yield. Like ADP, PG is a dividend aristocrat, having increased its dividend for over 68 years. Both ADP and PG should provide relatively stable earnings even in challenging economic environments.

BSD Analysis:
Matrix initiated a position in Procter & Gamble at $140, capitalizing on underperformance following the post-COVID normalization period. The manager acknowledges near-term headwinds including sluggish sales growth, competitive pricing pressure, and elevated costs from inflation and tariffs that have weighed on earnings since the pantry-loading boom ended. However, Matrix emphasizes P&G's market-leading positions, innovation capabilities, and best-in-class management as foundations for long-term success. At the entry price, P&G trades at the lower end of its 10-year valuation range while offering a 3.0% dividend yield, creating an attractive risk-adjusted opportunity. The company's 68-year dividend growth streak demonstrates exceptional financial discipline and cash generation capabilities. Matrix views this as a defensive play that should deliver stable earnings growth even in challenging economic conditions. The investment thesis centers on P&G's brand portfolio strength and operational excellence eventually overcoming current margin pressures and competitive dynamics.

Pitch Summary:
Automatic Data Processing (ADP) is a leader in the business of administering payroll, group health insurance, business insurance, workers' comp plans, retirement plans, and compliance for large and small businesses. These administrative functions are critical to a business's operations, and the company has a very high client retention rate. The company's stock price has declined approximately 30% over the past year on concerns that artificial intelligence will disrupt its business and a slowing labor market. ADP has a long history of increasing earnings and dividends. At our initial purchase price of about $215, the shares were trading at the lower end of their historic P/E multiple, 18x forward earnings, and at the higher end of their dividend yield at 3.2%. ADP has increased its dividend for over 50 consecutive years. We believe the share price will rebound strongly when the company demonstrates that the fears about AI's disruption to its business are exaggerated.

BSD Analysis:
Matrix initiated a position in ADP following a 30% decline driven by AI disruption fears and labor market concerns, viewing the selloff as creating an attractive entry point. The manager emphasizes ADP's mission-critical services including payroll, benefits administration, and compliance, which generate high client retention rates due to switching costs and operational importance. At $215 per share, ADP trades at 18x forward earnings, the lower end of its historical range, while offering a 3.2% dividend yield at the higher end of its range. The company's 50+ year dividend growth streak demonstrates financial stability and shareholder-friendly capital allocation. Matrix believes AI concerns are overblown given ADP's entrenched position in essential business functions and expects strong share price recovery when the company proves its resilience. The investment combines defensive characteristics through recession-resistant revenues with attractive valuation metrics. The thesis relies on ADP's competitive moat in business-critical services proving more durable than market fears suggest.

Pitch Summary:
We also started a partial position in Nike, a premier athletic shoe and sports apparel company. The company's share price has fallen sharply due to weak sales in China, a strategic misstep toward direct-to-consumer sales that has hurt long-standing relationships with wholesale partners, and competition from newer brands. After several years of poor results, the company brought in a new CEO in 2024 to repair its relationships with global retailers and restore its image as a sports-focused company. The company has cautioned that there are ongoing challenges from tariffs, consumers buying lower-cost alternatives, and high inventory levels. The stock is down more than 65% from its 2021 high of $179, as its earnings declined from $3.56 per share to an estimated $1.55 in the year ending 8/26. Our interest was piqued when we saw significant insider buying of stock at prices below $60. The stock has pulled back from our initial buys, and when cash is available, we expect to continue to slowly add to our position in the company. We believe the turnaround at Nike will take time, but the risk/reward at the current price is very attractive.

BSD Analysis:
Matrix initiated a position in Nike following a dramatic 65% decline from its 2021 peak of $179, with earnings falling from $3.56 to an estimated $1.55 per share. The manager views this as a classic turnaround opportunity, citing significant insider buying below $60 as a positive signal from management. Nike faces multiple headwinds including weak China sales, damaged wholesale relationships from its direct-to-consumer pivot, increased competition, tariff pressures, and elevated inventory levels. However, Matrix believes the new CEO appointed in 2024 can repair retailer relationships and refocus the brand on its sports heritage. The investment thesis relies on Nike's strong brand equity and global market position providing a foundation for recovery. At current depressed valuations, the risk/reward profile appears compelling despite acknowledging the turnaround will require time. Matrix plans to dollar-cost average into the position, demonstrating conviction in the long-term value proposition while managing execution risk.

Pitch Summary:
After a careful review of the sector's leading companies, we initiated a small position in Intuit, a leading U.S. financial software and data-driven platform serving consumers, small businesses, and accounting/tax professionals. It is best known for its TurboTax business. Intuit's share price declined from over $800 in 2025 to the low $400's. We started our position near the end of the quarter at approximately $425 per share. AI poses a threat to some software businesses, but we believe Intuit has a loyal customer base and will adapt to technological change. The company has an "ecosystem" advantage: workflows embedded in customers' financial lives (tax, accounting, payroll, payments, credit/financial offers) are efficient and discourage switching to another system. At 17x forward earnings, we believe it is very attractively priced for a company that has grown its earnings at a double-digit rate.

BSD Analysis:
Matrix initiated a position in Intuit following a significant 47% decline from over $800 to the low $400s, viewing the selloff as an overreaction to AI disruption fears in the software sector. The manager emphasizes Intuit's competitive moat through its integrated ecosystem of financial services that creates high switching costs for customers across tax, accounting, payroll, and payment workflows. At 17x forward earnings, the valuation appears attractive for a company with a history of double-digit earnings growth. The thesis centers on Intuit's loyal customer base and ability to adapt to technological change, particularly AI integration. Matrix believes the market has oversold quality software companies, creating compelling entry points. The purchase near $425 represents a contrarian bet on the company's resilience and long-term growth prospects. The manager's confidence in Intuit's ecosystem advantages and pricing power supports the bullish stance despite near-term AI headwinds.

Pitch Summary:
U-Haul Holding Company detracted from performance, but we saw evidence of the value of U-Haul's large self-storage business late in the first quarter. Public Storage announced the acquisition of the number five competitor, National Storage Affiliates, both self-storage real estate investment trusts (REITs). U-Haul does not break out detailed financials for its trucking versus its self-storage business. Applying the valuation methodology of the National Storage acquisition to U-Haul's self-storage business suggests that all of U-Haul's market capitalization can be attributed to the self-storage business, not counting the truck rental business that is synonymous with "U-Haul." The company continues to invest cash flow like business owners with a long-term perspective.

BSD Analysis:
The manager presents a compelling sum-of-the-parts valuation thesis for U-Haul based on hidden value in its self-storage operations. The investment case was validated by Public Storage's acquisition of National Storage Affiliates, providing a market-based valuation benchmark for self-storage assets. Applying comparable transaction multiples to U-Haul's self-storage business suggests the entire market capitalization is attributable to storage alone, essentially making the iconic truck rental business free. This represents a classic hidden asset situation where the market fails to properly value U-Haul's diversified business model. The manager appreciates management's long-term capital allocation approach and owner-operator mentality in reinvesting cash flows. The lack of segment reporting creates an information asymmetry that sophisticated investors can exploit. Recent underperformance provides an attractive entry point for a business with two distinct value drivers. The 2.55% portfolio weighting reflects meaningful conviction in this sum-of-the-parts opportunity with significant upside potential from asset recognition.

Pitch Summary:
Fox Corporation was another detractor in the first quarter after a period of strong share price performance. We have been a long-term investor in this company with the strong competitive position of Fox News which is focused on the conservative viewership segment of the market, its Fox Sports business and its Tubi business—a "free TV" business that is benefitting from the long-term shift away from cable television.

BSD Analysis:
The manager presents a long-term bullish thesis on Fox Corporation based on differentiated content assets and secular streaming trends. The investment centers on Fox News' dominant position in the conservative viewership segment, providing a defensible niche with loyal audience demographics. Fox Sports adds valuable live content that remains resilient to cord-cutting trends due to its appointment viewing nature. The Tubi "free TV" business represents a strategic growth driver positioned to benefit from the structural shift away from traditional cable television toward streaming platforms. The manager's long-term investment approach suggests confidence in Fox's ability to navigate media industry disruption through its focused content strategy. Recent underperformance follows a period of strong gains, indicating normal volatility rather than fundamental deterioration. The 2.59% portfolio weighting reflects meaningful conviction in the media transformation thesis. This represents a value-oriented media play with multiple content franchises and exposure to streaming growth trends.

Pitch Summary:
Microsoft was a detractor in the first quarter, but the investment remains a core holding in the portfolio. The "SaaSmaggedon" market reaction hit a broad array of software companies including Microsoft. While we agree that some software players' products and business models may be significantly impacted by the capabilities demonstrated by Claude and other agentic models, we believe that Microsoft is well-positioned across cloud infrastructure, enterprise software, gaming, and its ownership of LinkedIn.

BSD Analysis:
The manager maintains a bullish long-term view on Microsoft despite near-term headwinds from AI disruption concerns affecting the broader software sector. The "SaaSmaggedon" market reaction reflects investor fears about AI agents potentially displacing traditional software business models, creating temporary valuation pressure. However, the manager differentiates Microsoft from more vulnerable software companies based on its diversified platform approach across multiple business lines. The investment thesis emphasizes Microsoft's defensive positioning through cloud infrastructure dominance, enterprise software franchise, gaming assets, and LinkedIn's professional network moat. The manager acknowledges AI disruption risks while expressing confidence that Microsoft's scale and platform breadth provide competitive advantages. The 2.83% portfolio weighting and "core holding" designation indicate sustained conviction despite recent underperformance. This represents a quality growth investment with multiple revenue streams and strong competitive positioning in the evolving AI landscape.

Pitch Summary:
The energy companies in the portfolio contributed strongly to performance in the quarter: Canadian Natural Resources Limited (CNQ), ConocoPhillips Company, Diamondback Energy, and EOG Resources, Inc. All were beneficiaries of the oil price shocks associated with the conflict in the Middle East. We initially invested in CNQ in 2021 when energy company valuations had suffered through the COVID-19 crisis. Environmental, social, and governance (ESG) initiatives also weighed on market sentiment about the sector. In 2022 we added the other energy names at a time when the market cap of the entire sector was a fraction of the total market. These energy investments were designed in part to serve as a natural hedge in the face of geopolitical risks should they arise.

BSD Analysis:
The manager presents a strategic value investment thesis on Canadian Natural Resources, emphasizing contrarian timing and risk hedging benefits. The initial investment in CNQ was made in 2021 during severe sector distress from COVID-19 impacts and ESG headwinds when valuations were deeply depressed. The manager expanded energy exposure in 2022 when the entire sector's market capitalization was historically low relative to broader markets. The investment serves a dual purpose as both a value opportunity and a natural hedge against geopolitical risks and oil price volatility. Recent performance validates the contrarian approach, with CNQ and other energy holdings benefiting from Middle East conflict-driven oil price increases. The 9.66% portfolio weighting as the second-largest holding demonstrates high conviction in the energy thesis. This represents classic value investing discipline of buying quality assets during periods of maximum pessimism and structural undervaluation.

Pitch Summary:
Samsung Electronics continued its strong share price performance in the first quarter after having been a substantial drag on returns. Samsung's memory business remains among the top three players in the industry alongside SK Hynix and Micron Technology, Inc. The artificial intelligence (AI) infrastructure buildout has provided a secular tailwind to the historically cyclical memory chip market. Memory has become one of the key bottlenecks in the system, and the capacity constraints among the leaders in this segment are driving up prices for memory chips. High Bandwidth Memory (HBM) chips are core to the AI ecosystem, as are dynamic random-access memory (DRAM) and NAND chips which can be found in cars, phones, tablets, laptops, home appliances, and a vast array of other end products. Samsung has achieved prominent design wins in its foundry business as well—most notably with Tesla, Inc., Qualcomm, and Nvidia.

BSD Analysis:
The manager presents a bullish thesis on Samsung Electronics based on its dominant position in the memory semiconductor market and exposure to AI infrastructure growth. Samsung is positioned as one of the top three memory players globally, benefiting from secular AI tailwinds that are driving capacity constraints and pricing power. The investment thesis centers on Samsung's critical role in the AI ecosystem through HBM, DRAM, and NAND chips across multiple end markets. The manager highlights Samsung's foundry business success with major design wins from Tesla, Qualcomm, and Nvidia as additional value drivers. This represents a turnaround story where Samsung has recovered from being a performance drag to becoming a strong contributor. The AI infrastructure buildout provides a structural growth catalyst that differentiates this cycle from historical memory market volatility. The manager's conviction appears high given Samsung's 13.76% portfolio weighting as the top holding.

Pitch Summary:
U-Haul Holding Company detracted from performance, but we saw evidence of the value of U-Haul's large self-storage business late in the first quarter. Public Storage announced the acquisition of the number five competitor, National Storage Affiliates, both self-storage real estate investment trusts (REITs). U-Haul does not break out detailed financials for its trucking versus its self-storage business. Applying the valuation methodology of the National Storage acquisition to U-Haul's self-storage business suggests that all of U-Haul's market capitalization can be attributed to the self-storage business, not counting the truck rental business that is synonymous with "U-Haul." The company continues to invest cash flow like business owners with a long-term perspective.

BSD Analysis:
The manager's thesis on U-Haul centers on a hidden asset value story within the self-storage business that is obscured by consolidated reporting. Recent M&A activity in the self-storage REIT sector provides a valuation benchmark, with Public Storage's acquisition of National Storage Affiliates offering comparable transaction metrics. When applying these REIT valuation methodologies to U-Haul's self-storage operations, the analysis suggests the entire market capitalization could be justified by the storage business alone, essentially making the truck rental business a free option. This represents a classic sum-of-the-parts valuation opportunity where the market fails to recognize the value of U-Haul's diversified business model. The company's long-term capital allocation approach, investing cash flow like business owners, supports the manager's confidence in management's ability to compound value over time. The investment reflects the manager's patience in waiting for market recognition of underlying asset values.

Pitch Summary:
Fox Corporation was another detractor in the first quarter after a period of strong share price performance. We have been a long-term investor in this company with the strong competitive position of Fox News which is focused on the conservative viewership segment of the market, its Fox Sports business and its Tubi business—a "free TV" business that is benefitting from the long-term shift away from cable television.

BSD Analysis:
The manager presents a long-term bullish thesis on Fox Corporation built around three key business segments with distinct competitive advantages. Fox News provides a dominant position in the conservative viewership market, offering a differentiated content strategy with strong audience loyalty. The Fox Sports business adds diversification within the sports media landscape. Most notably, the Tubi "free TV" streaming service is positioned to benefit from the secular shift away from traditional cable television toward streaming platforms. This positions Fox to capture cord-cutting trends through its ad-supported streaming model. The manager's long-term investment approach suggests confidence in Fox's ability to navigate media industry disruption while maintaining its competitive moats. Recent first quarter weakness appears to be viewed as temporary given the strong underlying business positioning across news, sports, and streaming segments.

Pitch Summary:
Microsoft was a detractor in the first quarter, but the investment remains a core holding in the portfolio. The "SaaSmaggedon" market reaction hit a broad array of software companies including Microsoft. While we agree that some software players' products and business models may be significantly impacted by the capabilities demonstrated by Claude and other agentic models, we believe that Microsoft is well-positioned across cloud infrastructure, enterprise software, gaming, and its ownership of LinkedIn.

BSD Analysis:
The manager maintains conviction in Microsoft despite first quarter underperformance amid the "SaaSmaggedon" selloff affecting software companies. While acknowledging that AI agents like Claude may disrupt some software business models, the manager believes Microsoft's diversified platform positions it well to navigate this transition. The investment thesis rests on Microsoft's strong positioning across multiple growth areas including cloud infrastructure, enterprise software, gaming, and LinkedIn ownership. The manager views the recent weakness as temporary market sentiment rather than fundamental deterioration. Microsoft's scale and diversification across different technology verticals provide defensive characteristics while maintaining exposure to secular growth trends. The core holding status suggests high conviction despite near-term headwinds from AI disruption concerns affecting the broader software sector.