Investment Pitches

Pitch Summary:
Nilorngruppen is experiencing difficulties due to decreased textile consumption and increased transportation costs from Asia. However, the company has no debt and boasts a high return on invested capital (30-40%). It is gaining market share due to new European traceability regulations. Trading at approximately 8x normalized earnings, the fund has increased its exposure, reflecting confidence in the company's ability to navigate current challenges and capitalize on regulatory changes.

BSD Analysis:
Nilorngruppen's debt-free balance sheet and high return on invested capital underscore its operational efficiency and financial health. The company's ability to gain market share through compliance with new European regulations positions it advantageously in the evolving apparel industry. Despite current headwinds, Nilorngruppen's strategic focus on traceability and sustainability aligns with broader industry trends, potentially driving long-term growth. The attractive valuation provides a compelling entry point for investors seeking exposure to a resilient and innovative player in the textile sector.

Pitch Summary:
Creightons has been heavily impacted by rising energy costs, resulting in a 50% drop from its peak. The company has a new management team and is taking steps to improve margins by terminating low-margin contracts and securing long-term energy hedges. With 88% of its market cap in inventory and working capital, Creightons is trading at 3.7x EBITDA and 7x normalized PER. The fund has increased its position, indicating confidence in the company's turnaround strategy.

BSD Analysis:
Creightons' proactive measures to mitigate energy cost pressures, such as long-term hedging and strategic contract management, demonstrate a commitment to stabilizing and improving financial performance. The new leadership team brings fresh perspectives and strategies, which could catalyze a successful turnaround. The company's strong asset base, reflected in its inventory and working capital, provides a cushion against market volatility. As the cosmetics industry recovers, Creightons is well-positioned to capitalize on growth opportunities, supported by its attractive valuation metrics.

Pitch Summary:
Groupe Guillin has been significantly impacted by the rise in inflation, which has led to reduced consumption of fresh food. Despite this, the company has a strong liquidity position with 150-200 million euros, allowing it to potentially acquire struggling competitors. The stock is considered undervalued, trading at 8x PER and 4.1x EBITDA, with 50% of its market cap in working capital. The fund has increased its position, making it a top 3 holding.

BSD Analysis:
Groupe Guillin's strategic advantage lies in its low debt levels and substantial liquidity, which positions it well to capitalize on market opportunities through acquisitions. The company's valuation metrics suggest it is significantly undervalued compared to its peers, providing a margin of safety for investors. The focus on expanding market share through acquisitions could drive future growth, especially as competitors face financial difficulties. The company's resilience in a challenging macroeconomic environment highlights its operational strength and strategic foresight.

Pitch Summary:
Forbo Holding AG has experienced a significant decline in stock price, approximately 65% from its peak in August 2021, due to a combination of revenue contraction over three years and currency appreciation. Despite these challenges, the company remains financially robust with a debt-free balance sheet, a net cash position of CHF 109.1 million, and a high equity ratio of 66.8% as of the end of 2025. The company's structural strengths, including its Swiss domicile, niche monopoly in linoleum production, and strong heritage, provide a solid foundation for future recovery. The primary concern is governance, as the major shareholder holds a strategic financial investment rather than a founding-family stake.

BSD Analysis:
The cyclical nature of Forbo's business, particularly its exposure to the European construction market, has led to recent revenue declines. However, the company's financial stability, evidenced by its strong balance sheet and consistent dividend payments, suggests resilience. The appreciation of the Swiss Franc has further pressured margins, but this could reverse, providing upside potential. The governance issue, while notable, does not detract from the company's operational strengths and market position. Investors may find value in Forbo's long-term prospects, especially if the European construction market rebounds and currency pressures ease.

Pitch Summary:
After briefly being surpassed by Canadian bus maker, NFI Group (TSX: NFI), as our largest holding, Aimia Inc. (TSX: AIM) is back to our largest weighting as I sold some NFI Group in Q1 into its recent rally to fund new holdings. Aimia's stock price was flat (0% return) YTD through 4/10/26, and almost flat in 2025 save for a weakening USD which gave the CAD denominated shares a boost in USD terms. Aimia had a bit of a setback in Q1 when it announced the sale of its largest asset, the Italian specialty chemical company Bozzetto, which Aimia agreed to sell for much less than the analysts who cover Aimia and I thought it was worth. I had estimated that Bozzetto was worth a minimum of 8x EBITDA but it was sold for what appears to be about 6.5x EBITDA, an enterprise value of C$411M with net proceeds to Aimia of C$265M. That reduces my NAV per share estimate for Aimia from C$5.00 to C$4.00, which while painful is still 47% higher than the C$2.73 closing price on this Friday, Apr. 10th. On the bright side, the sale of Bozzetto might not have happened at all had Aimia held out for a better price, as the war with Iran which broke out less than three weeks after the Bozzetto sale was announced has caused input costs to soar (crude oil, naptha, etc.) so the timing was fortuitous. Getting Aimia some cash to invest, potentially during a bear market cycle (the sale should close in May), might yield much more than what seems to have been left on the table in the Bozzetto sale. Sometimes it is necessary to take a step back before attempting a bigger leap forward.

BSD Analysis:
Mittleman maintains Aimia as his largest holding despite a disappointing asset sale that reduced his NAV estimate from C$5.00 to C$4.00 per share. The sale of Bozzetto, Aimia's largest asset, occurred at 6.5x EBITDA versus his 8x minimum valuation, generating C$265M in net proceeds but leaving value on the table. However, the manager views the timing as fortuitous given the subsequent Iran conflict that drove up input costs for specialty chemicals, suggesting the sale might not have occurred at any price in the current environment. With shares trading at C$2.73 versus his revised C$4.00 NAV, Aimia still offers 47% upside potential. The key catalyst is management's ability to redeploy the Bozzetto proceeds effectively, potentially during a bear market when opportunities are more attractive. Aimia's transformation from a loyalty program company to an investment holding company creates optionality for value creation through strategic capital allocation. The flat stock performance in 2025-2026 creates an attractive entry point for patient value investors.

Pitch Summary:
At roughly AUD 0.50 (USD 0.35) now, AMA's stock price is valuing Australia and New Zealand's largest collision repair firm by far, with over AUD 1B in sales, at a measly enterprise value of AUD $235M (excluding leases), which is only 3.1x the EBITDA (after lease expenses) of AUD $75M expected in calendar 2026. I think fair value is triple the current price, which would be an enterprise value of 9.5x EBITDA for c2026 (AUD $75M), and 8.4 EBITDA for c2027 (AUD $85M). AMA's share price was declining well before the Iran conflict began, from an interim peak of AUD 1.10 (USD 0.72) in October 2025, despite producing steadily improving results in-line with their forecasts and analysts' expectations. The pre-war weakening of the share price might have been due to sellers taking profits from the huge issuance of new shares back in July 2024 at a split-adjusted AUD 0.42, which while dilutive did at least put the company in a nearly debt-free (excluding leases) position. AMA dropped nearly 30% in AUD terms, -32% in USD, during the month of March as the war in Iran caused energy prices in Australia and New Zealand to surge, which the market correctly fears might lead to reduced miles driven (and thus fewer collisions to repair) if it continues for much longer. Australia is unusually vulnerable in this regard, given almost all of its fuel is imported, and they have very little in reserves. But even if gas lines form and rationing ensues, it should be months not years. Insider buying at AMA Group, as with a few of our other holdings like Mattel, has been encouraging. AMA director Brian Austin most recently bought another 1.5M shares at AUD 0.614, more than 22% above the current price, on March 10th & 12th. He now owns just over 10M shares.

BSD Analysis:
Mittleman presents a compelling value thesis on AMA Group, Australia's dominant collision repair operator with over AUD 1B in sales trading at an extraordinarily cheap 3.1x EBITDA multiple. The manager believes fair value is triple the current price, targeting 9.5x EBITDA which would represent significant upside from current levels. The recent 30%+ decline appears driven by temporary concerns about reduced driving due to higher energy costs from the Iran conflict, rather than fundamental deterioration. AMA's business fundamentals remain solid with steadily improving results meeting forecasts, and the company maintains a nearly debt-free balance sheet following a dilutive but strengthening equity raise in 2024. Insider buying provides additional confidence, with director Brian Austin purchasing 1.5M shares 22% above current prices. The temporary nature of energy price spikes and AMA's market-leading position in a necessary service industry support the recovery thesis. Australia's vulnerability to imported fuel creates short-term headwinds but should normalize within months rather than years.

Pitch Summary:
TDW increased by ~65% in the first quarter as investors rotated into energy and energy-adjacent stocks. Additionally in February, TDW acquired Wilson Sons, a leading Platform-Specialty-Vehicle (PSV) operator in Brazil. Tidewater is a marine services firm that operates one of the world's largest fleets of offshore support vessels (OSV's). They serve the energy industry by transporting crew and supplies, towing and anchoring drillships and supporting offshore construction projects. The long-term outlook for international and offshore markets is strong while the near-term is a little cloudier. As current resource plays (the Permian) slow down, worldwide demand will continue to grow and require more oil. It is expected that offshore capital commitments will rebound in the next 1-2 years. What's striking about this industry is the lack of investment in the OSV fleet. Since the GFC, global shipyard capacity has shrunk by nearly 60%. In addition, newbuild investment is lacking as many banks have pulled back from lending. Over the next decade, as fleets age, the global OSV market is expected to shrink by ~40%. This adds up to a potential for large pricing moves, in our favor, coupled with high utilization. TDW generated ~$350MM in free-cash-flow in 2025 which is a trailing ~8% FCF yield. In a more normal environment, I'd expect them to generate $500mm-1bb which gets to ~12-25% yields. Importantly their share buybacks were historically limited by debt covenants, and they will have minimal debt post-acquisition.

BSD Analysis:
Black Bear sees TDW as positioned for a significant offshore services recovery driven by supply-demand fundamentals. The company operates one of the world's largest offshore support vessel fleets, providing critical services to offshore energy operations. The investment thesis centers on severe fleet undersupply - global shipyard capacity has declined 60% since the GFC, with limited newbuild investment due to bank lending pullbacks. The aging global OSV fleet is expected to shrink 40% over the next decade, creating potential for substantial pricing power and utilization improvements. Current free cash flow of $350MM represents an 8% yield, but normalized conditions could generate $500MM-1B, implying 12-25% yields. The Wilson Sons acquisition in Brazil expands geographic diversification and capabilities. Debt reduction post-acquisition removes covenant restrictions on share buybacks, enabling aggressive capital returns. The manager expects offshore capital commitments to rebound as onshore plays like the Permian mature, driving increased demand for TDW's services in a constrained supply environment.

Pitch Summary:
PSK.TO increased by ~21% in Q1 (dividend included). We have owned PrairieSky over the last 5+ years. As a reminder PSK.TO is a pure-play oil and natural gas royalty company that owns one of Canada's largest portfolios of subsurface mineral rights and royalty interests across Western Canada. Importantly, the company does not operate or drill oil and gas wells itself; instead, it leases its land to third-party energy producers and collects high-margin royalty revenues based on production without incurring operational costs or capital expenditures. Businesses like this should trade at a meaningful premium to the average company due to the lack of capital intensity and long duration of healthy cash flows. Likely due to both being an energy company and being in Canada we can own the business at a 5-8% yield assuming stable production and steady oil energy prices (this does not presume current elevated energy prices). Additionally, the business is run by an exceptional CEO and Board that understands capital allocation at a deep level. Given the lack of global investment in energy development and potential for inflation, our ownership serves as a positive yielding long-term business investment with a call option on higher energy prices and/or needed production.

BSD Analysis:
Black Bear views PSK.TO as an exceptional royalty business trading at an unjustified discount due to energy sector and Canadian market bias. The company's asset-light model generates high-margin royalty income without operational risks or capital expenditure requirements, characteristics that typically command premium valuations. The 5-8% current yield at stable commodity prices provides attractive income with significant upside optionality from higher energy prices. Management's capital allocation expertise adds confidence in shareholder value creation over time. The investment thesis benefits from chronic underinvestment in global energy development, creating supply constraints that should support higher commodity prices and increased drilling activity on PSK's lands. The royalty structure provides leveraged exposure to energy price increases while offering downside protection through the underlying land value. The 5+ year holding period demonstrates the manager's conviction in the long-term energy supply-demand imbalance and PSK's positioning to benefit from this structural trend.

Pitch Summary:
FLG increased by ~5% in Q1. Flagstar Financial is the former New York Community Bank (a mashup of Flagstar Bank, New York Community Bank and assets from Signature Bank). Like our past SHORT investments in Silicon Valley Bank and First Republic, FLG had a hole in their balance sheet (from soured multifamily and office real estate vs. long-duration securities). That is where the similarities end. FLG raised over $1BB in additional capital, led by former Treasury Secretary Steven Mnuchin. They revamped the management team and brought in a superstar CEO in Joseph Otting who successfully turned around OneWest Bank post GFC (formerly known as IndyMac Bank). Mr. Otting and his team are my kind of managers – they are plain-spoken, hardworking and plan for the worst while hoping for the best. The turnaround is going well, and they recently reported their first profitable quarter since the new management team took over. The valuation is extremely compelling. At quarter-end the bank was trading at ~83% of a conservatively marked balance sheet. This is in contrast with similar banks (who are NOT conservatively marked) trading at 120-150% of their tangible book value. At these prices the downside seems low and could see this business up 45-100% over the next 1-3 years as it is more appropriately valued.

BSD Analysis:
Black Bear sees FLG as a classic turnaround story with exceptional management and compelling valuation. The bank faced balance sheet issues similar to failed institutions like Silicon Valley Bank and First Republic, but management's response differentiates it completely. The $1B+ capital raise led by Steven Mnuchin and installation of proven turnaround CEO Joseph Otting provides credibility and execution capability. Otting's track record transforming OneWest Bank post-GFC demonstrates his ability to navigate distressed banking situations. The recent return to profitability validates the turnaround progress under new leadership. The valuation opportunity is stark - trading at 83% of conservatively marked tangible book value versus peers at 120-150% of less conservative marks. This discount reflects market skepticism about the turnaround, creating asymmetric upside as execution continues. The manager projects 45-100% upside over 1-3 years as the market re-rates the bank to appropriate valuation multiples.

Pitch Summary:
FPH is a real estate development company focused on creating large-scale, master-planned communities in some of the most supply-constrained and high-demand markets in California. They specialize in transforming underutilized land into residential and mixed-use environments. Their flagship properties are in Orange County, greater Los Angeles and San Francisco. This is a long-duration, asset-heavy investment that is driven by monetizing their land over time. Clearly this is quite sensitive to the housing environment in California which has been plagued by underbuilding and costly/slow regulatory timelines. While change takes time, the lack of housing supply is becoming more of an issue every day and is now gaining more attention at the state and local level. Their most meaningful cash generative asset is held in a Joint Venture obscuring the cash-flow generation of the business. Using conservative assumptions, we calculate a NAV estimate that is up to 3x higher than today's share price. There are a wide range of possibilities, and the timing is difficult to predict. Like BLDR, the need for affordable housing is extreme, especially in the metro communities of California. As the landowners, FPH stands to benefit from any positive shift in regulation/red tape. Our downside is well protected in the meantime. I am not providing much financial detail as we have continued to accumulate stock given the recent weakness.

BSD Analysis:
Black Bear views FPH as a compelling long-duration value play in California's severely supply-constrained housing markets. The company owns prime development land in Orange County, Los Angeles, and San Francisco - markets with extreme housing shortages and regulatory barriers that create significant barriers to entry. The manager's NAV analysis suggests the stock trades at a substantial discount, potentially up to 3x below intrinsic value based on conservative land monetization assumptions. The investment thesis relies on California's worsening housing crisis eventually forcing regulatory reform and streamlined approval processes. FPH's position as a landowner provides optionality on any positive regulatory changes while offering downside protection through hard asset backing. The manager acknowledges timing uncertainty but emphasizes the structural nature of California's housing deficit. The Joint Venture structure obscures cash flow visibility, but the manager continues accumulating shares during weakness, indicating high conviction in the asymmetric risk-reward profile.

Pitch Summary:
BLDR declined an additional 20% in the first quarter after a 28% decline in 2025 amidst weakness in the housing market. As noted earlier, we did add a housing ETF index short to the portfolio given some short-term concerns about the housing environment, particularly from increased rate risk/inflation risk. Fundamentally, the Company performed well last year and generated $875MM in free-cash-flow in 2025 translating to a trailing yield of ~10%. It seems likely that 2026 will be another year in this general range (adjusted for working capital swings). We have previously discussed the potential for short-term stock price fluctuations, but so long as the long-term thesis was intact, we would continue to own the business. BLDR is a manufacturer and supplier of building materials with a focus on residential construction. Historically this business was cyclical with minimal pricing power as the primary products sold were lumber and other non-value-add housing materials. Since the GFC, BLDR has focused on growing their value-add business that is now 40%+ of the topline. Our long-term thesis remains intact as there is a structural shortage of housing in the USA. Higher mortgage rates reduce the supply of existing home supply as homeowners are locked into low-rate mortgages. As we have seen in recent history, the overall pie of housing activity may shrink, with new homebuilders capturing an increasing share of home sales. I have lowered my estimates for the near-term cash generation of the business but still assume normalized free-cash-flow per share to be $9-$12 per year implying a free-cash-flow yield of 10-13% with no growth priced in. Long-term there are powerful tailwinds that benefit the scaled businesses in this space.

BSD Analysis:
Black Bear maintains a bullish stance on BLDR despite significant stock price declines, viewing the weakness as temporary market sentiment rather than fundamental deterioration. The manager emphasizes the company's strong cash generation capabilities, producing $875MM in free cash flow in 2025 for a 10% trailing yield. The investment thesis centers on structural housing undersupply in the US, with higher mortgage rates creating a supply constraint that benefits new home construction and building material suppliers. BLDR has strategically evolved from a cyclical lumber distributor to a value-added building products company, with 40%+ of revenue now coming from higher-margin products. The manager projects normalized free cash flow of $9-12 per share, implying 10-13% yields with no growth assumptions. While acknowledging near-term headwinds from rate and inflation risks, the long-term demographic tailwinds from millennial household formation support the structural demand thesis. The concentrated exposure reflects high conviction in the company's market position and cash generation potential.

Pitch Summary:
TDW increased by ~65% in the first quarter as investors rotated into energy and energy-adjacent stocks. Additionally in February, TDW acquired Wilson Sons, a leading Platform-Specialty-Vehicle (PSV) operator in Brazil. Tidewater is a marine services firm that operates one of the world's largest fleets of offshore support vessels (OSV's). They serve the energy industry by transporting crew and supplies, towing and anchoring drillships and supporting offshore construction projects. The long-term outlook for international and offshore markets is strong while the near-term is a little cloudier. As current resource plays (the Permian) slow down, worldwide demand will continue to grow and require more oil. It is expected that offshore capital commitments will rebound in the next 1-2 years. What's striking about this industry is the lack of investment in the OSV fleet. Since the GFC, global shipyard capacity has shrunk by nearly 60%. In addition, newbuild investment is lacking as many banks have pulled back from lending. Over the next decade, as fleets age, the global OSV market is expected to shrink by ~40%. This adds up to a potential for large pricing moves, in our favor, coupled with high utilization. TDW generated ~$350MM in free-cash-flow in 2025 which is a trailing ~8% FCF yield. In a more normal environment, I'd expect them to generate $500mm-1bb which gets to ~12-25% yields. Importantly their share buybacks were historically limited by debt covenants, and they will have minimal debt post-acquisition.

BSD Analysis:
Black Bear sees TDW as positioned for a significant offshore services recovery driven by supply-demand fundamentals. The company operates one of the world's largest offshore support vessel fleets, providing critical services to offshore energy operations. The investment thesis centers on severe fleet undersupply - global shipyard capacity has declined 60% since the GFC, with limited newbuild investment due to bank lending pullbacks. The aging global OSV fleet is expected to shrink 40% over the next decade, creating potential for substantial pricing power and utilization improvements. Current free cash flow of $350MM represents an 8% yield, but normalized conditions could generate $500MM-1B, implying 12-25% yields. The Wilson Sons acquisition in Brazil expands geographic diversification and capabilities. Debt reduction post-acquisition removes covenant restrictions on share buybacks, enabling aggressive capital returns. The manager expects offshore capital commitments to rebound as onshore plays like the Permian mature, driving increased demand for TDW's services in a constrained supply environment.

Pitch Summary:
PSK.TO increased by ~21% in Q1 (dividend included). We have owned PrairieSky over the last 5+ years. As a reminder PSK.TO is a pure-play oil and natural gas royalty company that owns one of Canada's largest portfolios of subsurface mineral rights and royalty interests across Western Canada. Importantly, the company does not operate or drill oil and gas wells itself; instead, it leases its land to third-party energy producers and collects high-margin royalty revenues based on production without incurring operational costs or capital expenditures. Businesses like this should trade at a meaningful premium to the average company due to the lack of capital intensity and long duration of healthy cash flows. Likely due to both being an energy company and being in Canada we can own the business at a 5-8% yield assuming stable production and steady oil energy prices (this does not presume current elevated energy prices). Additionally, the business is run by an exceptional CEO and Board that understands capital allocation at a deep level. Given the lack of global investment in energy development and potential for inflation, our ownership serves as a positive yielding long-term business investment with a call option on higher energy prices and/or needed production.

BSD Analysis:
Black Bear views PSK.TO as an exceptional royalty business trading at an unjustified discount due to energy sector and Canadian market bias. The company's asset-light model generates high-margin royalty income without operational risks or capital expenditure requirements, characteristics that typically command premium valuations. The 5-8% current yield at stable commodity prices provides attractive income with significant upside optionality from higher energy prices. Management's capital allocation expertise adds confidence in shareholder value creation over time. The investment thesis benefits from chronic underinvestment in global energy development, creating supply constraints that should support higher commodity prices and increased drilling activity on PSK's lands. The royalty structure provides leveraged exposure to energy price increases while offering downside protection through the underlying land value. The 5+ year holding period demonstrates the manager's conviction in the long-term energy supply-demand imbalance and PSK's positioning to benefit from this structural trend.

Pitch Summary:
FPH is a real estate development company focused on creating large-scale, master-planned communities in some of the most supply-constrained and high-demand markets in California. They specialize in transforming underutilized land into residential and mixed-use environments. Their flagship properties are in Orange County, greater Los Angeles and San Francisco. This is a long-duration, asset-heavy investment that is driven by monetizing their land over time. Clearly this is quite sensitive to the housing environment in California which has been plagued by underbuilding and costly/slow regulatory timelines. While change takes time, the lack of housing supply is becoming more of an issue every day and is now gaining more attention at the state and local level. Their most meaningful cash generative asset is held in a Joint Venture obscuring the cash-flow generation of the business. Using conservative assumptions, we calculate a NAV estimate that is up to 3x higher than today's share price. There are a wide range of possibilities, and the timing is difficult to predict. Like BLDR, the need for affordable housing is extreme, especially in the metro communities of California. As the landowners, FPH stands to benefit from any positive shift in regulation/red tape. Our downside is well protected in the meantime. I am not providing much financial detail as we have continued to accumulate stock given the recent weakness.

BSD Analysis:
Black Bear views FPH as a compelling long-duration value play in California's severely supply-constrained housing markets. The company owns prime development land in Orange County, Los Angeles, and San Francisco - markets with extreme housing shortages and regulatory barriers that create significant barriers to entry. The manager's NAV analysis suggests the stock trades at a substantial discount, potentially up to 3x below intrinsic value based on conservative land monetization assumptions. The investment thesis relies on California's worsening housing crisis eventually forcing regulatory reform and streamlined approval processes. FPH's position as a landowner provides optionality on any positive regulatory changes while offering downside protection through hard asset backing. The manager acknowledges timing uncertainty but emphasizes the structural nature of California's housing deficit. The Joint Venture structure obscures cash flow visibility, but the manager continues accumulating shares during weakness, indicating high conviction in the asymmetric risk-reward profile.

Pitch Summary:
Turning to the GVF portfolio, as briefly discussed in last month's commentary, a significant positive contributor to performance in March was the aircraft leasing fund, Amedeo Air Four Plus (AA4). AA4 shares were up c.21% over the month following a takeover bid by a Qatari bank, with the bid price (73p) implying c.4.3% of further upside once the transaction completes in Q3 2026. As significant shareholders, we were provided with details of the transaction prior to its release, and asked for our public support, which we gave in the form of a Letter of Intent. As regular readers will recall, GVF first invested in AA4 in the depths of COVID, in 2020. At that time, the share price was roughly equivalent to the cash in the company, placing little to no value on the fund's twelve aircraft and the associated long-term leases. As the world emerged from COVID, AA4 shares continued to trade at distressed levels as the original investor base exited the stock, and we added to the investment over time, including – notably – a block trade c.10% below market in July 2021. For the c.5 years GVF has been invested, we have been engaged investors, enjoying a constructive relationship with the board, notably the Chair. This engagement included putting forward a representative from a fellow shareholder to the board in 2023. The takeover bid marks the culmination of significant work by the board of AA4 over the years to find a strategic outcome to realise value for shareholders, and for which the directors deserve huge credit. Over the course of the investment, GVF has enjoyed several years' worth of dividend income, together with four large returns of capital. Without wishing to tempt fate, assuming the transaction closes as planned in Q3, GVF's investment in AA4 will have delivered an annualised return of c.46%.

BSD Analysis:
Staude Capital's investment in Amedeo Air Four Plus represents a classic deep value turnaround story that has reached its successful conclusion. The manager initially invested during COVID-19 when the stock traded at distressed levels, essentially pricing the shares at cash value with no attribution to the twelve widebody aircraft or long-term lease contracts. This presented an extraordinary opportunity to acquire aviation assets at a significant discount during peak market pessimism. The fund demonstrated patient capital allocation by adding to positions during continued weakness, including a strategic block trade 10% below market in July 2021. Active engagement with management and board representation helped drive strategic initiatives toward value realization. The Qatari bank takeover bid at 73p validates the intrinsic value thesis, with the transaction expected to deliver an exceptional 46% annualized return over the five-year holding period. The investment generated substantial cash flows through dividends and capital returns throughout the holding period, demonstrating the quality of the underlying aircraft lease portfolio.

Pitch Summary:
CATL, in the Climate Area of Interest, is the world's largest battery cell manufacturer with 39% of global market share in power batteries in 2025. The company operates a vertically integrated model spanning mining, processing, R&D and battery cell production for electric vehicles (EVs) and energy storage systems (ESS). In EVs, which remains the largest end market for their products, the company's customers include 9 of the top 10 leading EV manufacturers by volume. CATL holds a leading position in lithium iron phosphate (LFP) batteries, which are increasingly the preferred chemistry due to their cost advantage and superior safety profile. While we anticipate EV volumes to slow in 2026, larger batteries with longer range mean a content uplift opportunity for CATL. However, recently it has been ESS, not EVs, which have the more exciting area of growth. In particular, China needs ESS because much of the solar it has already installed is curtailed, essentially wasted, because supply exceeds demand. To illustrate, in the first half of 2025, 33% of the solar generated in the western Chinese region of Tibet was curtailed. If they had more ESS, they could store this excess supply during daylight hours and use it in the evening peak. To address this, China recently announced ambitious ESS policies aiming to grow capacity by nearly 30% p.a. to 180GW by 2027, requiring investment of USD35b: a huge revenue opportunity for developers and battery makers. We anticipate growth of over 50% in CATL's ESS end market in 2026. At CATL's result in late March, they also confirmed expectations of between 20-30% volume growth for the next 5 years. CATL also said they expect net profit per unit (kWh) will remain stable in 2026. The ability to grow profitably has been a key difference between CATL and listed peers which, despite also benefiting from the underlying volume growth, have struggled with maintaining margins. This was a key focus leading up to the result given the lithium price, a key raw material for batteries, has increased over 30% year to date (using the Chinese lithium carbonate spot price as a proxy). CATL reiterated that its EV customers have cost pass through contracts, and for ESS they regularly adjust prices for raw materials and demonstrate value-add to maintain pricing and margins. We also continue to see CATL leading innovation. One example is in sodium ion batteries. In February, CATL and EV maker Changan Automotive unveiled the first mass-production EV with sodium ion batteries - a technology which does not use lithium and promises between 30-40% lower battery cost versus lithium over time. It also changes the percentage of the battery cost which comes from raw materials, with CATL hoping that they can again benefit from their technological lead and grow profitably. Finally, while acknowledging that we simply do not know the future of the Iran conflict and its many macro implications, it does bring national energy security to the fore. As the chart below shows, past oil crises have accelerated moves to other fuels. And unlike those previous periods, today there are viable, cheap alternatives to oil-based technologies. The most obvious example is an EV car and truck as an alternative to an internal combustion engine vehicle. So, all else equal, we consider the current crisis an accelerator for electrification, especially in countries like China, which are net energy importers, with CATL a key beneficiary.

BSD Analysis:
Munro Partners maintains a bullish stance on CATL, the world's largest battery manufacturer with 39% global market share. The investment thesis centers on two key growth drivers: expanding EV content per vehicle despite volume slowdown, and explosive growth in energy storage systems (ESS). China's ambitious ESS policies targeting 180GW capacity by 2027 represent a $35 billion investment opportunity, with CATL positioned to capture over 50% growth in this segment. The company's competitive advantages include vertical integration, cost pass-through contracts protecting margins despite 30% lithium price increases, and innovation leadership in sodium-ion batteries promising 30-40% cost reductions. CATL's guidance of 20-30% volume growth over five years while maintaining stable per-unit profitability differentiates it from struggling peers. The Iran conflict adds a geopolitical tailwind, potentially accelerating electrification adoption as countries prioritize energy security, particularly benefiting Chinese companies like CATL in net energy-importing markets.

Pitch Summary:
Microsoft is a global technology leader with a diversified suite of products spanning across enterprise software, cloud computing, personal computing, and gaming. The company concluded calendar year 2025 with great momentum, delivering mid-to-high teens revenue growth and expanding operating margins that drove earnings to compound at above 20%. Despite its moat in AI and robust quarterly earnings, Microsoft's share price came under pressure as investors digested a pause to Azure's growth acceleration. While the company is scaling AI data centres at an unprecedented rate – bringing 1GW of capacity online in the December quarter alone, compared to 2GW in all of fiscal 2025 – the market is struggling to bridge the gap between their massive AI capital expenditure and the return on invested capital demonstrated in the form of further acceleration in its cloud business. Management clarified that this new capacity is being strategically diverted toward high-margin software offerings like Copilot and internal AI R&D efforts. However, given the large revenue base of these offerings and slower-than-expected Copilot uptake, the enterprise software segment also failed to see a meaningful uptick in revenue growth. This led to investors questioning whether management is efficiently deploying its expanding compute resources. As Microsoft pivots incremental compute toward software and internal R&D workloads, we think it likely takes near-term Azure revenue acceleration off the table. With management signalling a more gradual enterprise adoption of Copilot, a material step change in enterprise software growth will also take time to materialise. While we believe Microsoft's re-prioritisation of internal AI workloads will drive robust long-term value, the lack of a clear path to near-term earnings acceleration has led us to exit the position Microsoft has been a long time holding of the Fund and delivered strong returns for unit holders, we look forward to returning to the position at some point assuming they successfully navigate this evolving landscape.

BSD Analysis:
Munro Partners exited Microsoft despite acknowledging the company's strong fundamentals and AI positioning. The fund manager expressed concern over the disconnect between Microsoft's massive AI capital expenditure and visible returns in cloud revenue acceleration. While Microsoft delivered mid-to-high teens revenue growth and 20%+ earnings growth, Azure's growth decelerated and Copilot adoption lagged expectations. Management's strategic pivot toward internal AI R&D and software offerings, while potentially valuable long-term, obscures near-term earnings visibility. The fund views this capacity reallocation as removing Azure's revenue acceleration catalyst while enterprise software growth remains constrained by gradual Copilot adoption. Despite Microsoft's competitive moat in AI and historical strong returns for the fund, Munro prioritized earnings certainty and exited the position, leaving the door open for re-entry once the company demonstrates clearer monetization of its AI investments.

Pitch Summary:
Despite exceeding market expectations when reporting an increase in profits and paying a special dividend, Bravura also fell more than 20% during the quarter around fears that AI disruption will also severely disrupt software providers. The argument being that what has been a high-margin proprietary business is set to become a low-margin commodity business as AI provides a cheaper source of code and can be undertaken from within the business. The counterargument, admittedly offered by software company executives, is that there is far more to their businesses than just writing code, and not all businesses will be affected equally. So, it is possible there may be a bifurcation in the industry where some software businesses that only offer something generic and don't own their data will struggle, while software that is deeply embedded, in a highly regulated environment and providing the 'source of truth' will survive and possibly thrive. At this stage nearly every business is being treated as the former, whereas I would argue Bravura and its products form part of the latter. As I wrote in the last update, Bravura provides software to large multi-national corporations operating in a complex, highly regulated environment. The risks of writing your own software to reduce costs against the risk of being non-compliant for the various bodies and counter-parties they deal with seems an unattractive proposition to me.

BSD Analysis:
The manager maintains a bullish view on Bravura despite a 20%+ decline driven by AI disruption fears, arguing the market is indiscriminately punishing all software companies. The business delivered strong fundamentals with profit growth exceeding expectations and returned capital via special dividend. The manager differentiates Bravura as deeply embedded software serving highly regulated financial institutions, making it a 'source of truth' provider rather than generic code. The regulatory complexity and compliance risks in financial services create significant switching costs and barriers to in-house development. The manager believes market fears are creating a bifurcation opportunity where mission-critical, regulated software providers like Bravura will outperform generic software businesses. Current valuation appears attractive given the defensive characteristics and embedded nature of the business.

Pitch Summary:
AUB reported a healthy profit result for the half-year. Underlying profits were up 13.9% on the back of a 6.6% increase in revenue, they increased their dividend by 8% on the previous year, and indicated profits are likely to be up more than 10% for the full year. However, the shares were sold down more than 20% during the quarter. The company was swept up in the fear that AI will allow customers to bypass brokers and navigate the process of buying insurance directly from underwriters. While this is likely to happen for simple lines of insurance such as car insurance and home contents, it will be far more difficult when assessing specialised and complex risks for business owners, AUB's typical client. And for simpler risks AUB already has the Bizcover platform which reported that revenues were up 13% on the prior year and profits were up 23%. Bizcover only represents 10% of the overall profits of AUB but it is the most profitable part of the business with margins of 46%, up from 37% a few years ago. And it already uses AI within its business processes, so it's clear that AI also offers benefits, not just risks. The company also announced the acquisition of Prestige for $432m during the quarter. Prestige is a broking and underwriting agency business in the UK with net revenue of approximately $100m and this will be their fourth acquisition in the UK in recent years. It is hard to believe that only a few months ago the company received a takeover offer for $45 per share, and after reporting an increase in profits, increasing their dividend, and predicting profit growth the share price is down nearly 50%.

BSD Analysis:
The manager views AUB's 20%+ decline as an AI-driven overreaction, maintaining strong conviction despite market fears. The business delivered solid fundamentals with 13.9% profit growth, 6.6% revenue growth, and 8% dividend increase while guiding for 10%+ full-year profit growth. The manager argues AI disruption fears are misplaced for AUB's complex commercial insurance focus, differentiating from simple consumer lines. The high-margin Bizcover platform (46% margins) demonstrates AUB's ability to leverage AI as an opportunity rather than threat. The $432m Prestige acquisition expands UK presence and represents the fourth strategic acquisition in the region. The valuation disconnect is stark given a recent $45/share takeover offer versus current pricing after improved results, suggesting significant upside potential.