Investment Pitches

Pitch Summary:
Healthcare. While persistent economic concerns may provide a growing list of attractive "deep value" options in cyclical companies, Perrigo Co. PLC (PRGO) is an example of heavy lifting on "self-help" bearing fruit in a company that has an economically-resilient demand profile. The company, which enjoys a 50% share of store-branded, over-the-counter self-care and wellness products in the U.S., has stabilized its sales and pruned its line-up of low-margin items. Management plans to reinvest the healthy cash generated by this part of the business into its higher-margin, faster-growing branded lines in the U.S. and Europe. They also have a clear path, via manufacturing facility consolidation, to drive step-function improvement in the free cash flow margin of its infant formula business from low single digit to mid/high teens. We believe self-care companies are poised to outperform and experience multiple expansion as the industry benefits from government policy and consumer preference changes. With the evolving political view of healthcare and increased interest from consumers to get and stay healthy, we are seeing a move toward preventive care and healthy aging, driving innovative new products and services such as preventive testing, personalized supplements, and food as medicine. Traditional self-care products should also see a benefit as Health and Human Services Secretary Robert F. Kennedy Jr. focuses on improved access to safe and affordable healthcare options, lowering chronic disease rates, ending childhood chronic disease, prioritizing prevention, and promoting healthy lifestyles and better nutrition. Despite significantly improving prospects, valuations for self-care companies remain below those of consumer-packaged-goods businesses oriented toward personal care. Within self-care, we believe Perrigo is among the most attractively valued and poised to benefit as the valuation gap closes. We believe PRGO should trade at 11 times 2025 EBITDA or around 14 times earnings, which would put the stock around $40 per share, up from its current price of around $28 a share.

BSD Analysis:
Heartland views Perrigo as a compelling "self-help" turnaround story with economically resilient demand characteristics. The company dominates store-branded OTC products with a 50% U.S. market share and has successfully stabilized sales while pruning low-margin items. Management's strategy focuses on reinvesting cash flow into higher-margin branded products and consolidating manufacturing facilities to improve infant formula margins from low single digits to mid-to-high teens. The investment thesis is bolstered by favorable secular trends toward preventive care and healthy aging, supported by potential policy changes under RFK Jr.'s healthcare agenda. Despite improving fundamentals, self-care companies trade at discounts to consumer packaged goods peers, creating a valuation arbitrage opportunity. The manager provides a specific price target of $40 per share based on 11x 2025 EBITDA or 14x earnings, representing 43% upside from the current $28 price level.

Pitch Summary:
Industrials. Another opportunity we see in quality value is The Middleby Corporation (MIDD), which designs and manufactures commercial food prep, residential kitchen, and food processing equipment. The company's commercial foodservice segment, which makes convection ovens, blast chillers, ranges, and fryers, accounts for around 62% of sales, with the remaining 38% equally derived from its food processing and residential business, which operates under high-end brands such as Viking, Masterbuilt, and Rangemaster. We first purchased shares of MIDD in late 2023 after the company transitioned from trading at a historic premium to industry peers to a discount despite superior profitability. We believe the derating occurred because of prior management's decision to shift away from being a pure-play commercial equipment supplier and expand into the residential market, which is its lowest-margin and most cyclical business. Today, management is attempting to boost margins across segments by accelerating brand integration and emphasizing higher margin products that provide enhanced productivity for customers. Until recently, the stock had not responded to these initiatives. In January, regulatory filings disclosed Ed Garden's activist family office, Garden Investments, had built a position in MIDD. Garden is known in the investment world for co-founding Trian Fund Management alongside famed activist investor Nelson Peltz. The stock rose around 20% on the news. Since the activist news, Middleby has announced the addition of two new board members appointed by Garden, and the company is planning to spin off the food processing segment in 2026. We expect management will eventually spin or sell its low-margin residential segment as well. Over the past 20 years, MIDD has traded at a median premium of 10% to its industrial peers. At the moment, however, its valuation stands at just 11 times EV/EBITDA over the next 12 months, a nearly 20% discount to the sector.

BSD Analysis:
Heartland initiated a position in Middleby Corporation in late 2023 when the stock transitioned from a historical premium to trading at a discount despite superior profitability. The manager attributes the derating to prior management's expansion into the lower-margin residential market. The investment thesis centers on management's margin improvement initiatives through brand integration and focus on higher-margin commercial products. A significant catalyst emerged with activist investor Ed Garden building a position, leading to a 20% stock price increase and the addition of two new board members. The company plans to spin off its food processing segment in 2026, with expectations for eventual divestiture of the low-margin residential business as well. Trading at 11x EV/EBITDA represents a nearly 20% discount to industrial peers, compared to MIDD's historical 10% premium over the past two decades. The combination of operational improvements and activist involvement positions the stock for significant revaluation.

Pitch Summary:
Technology. Teledyne Technologies, Inc. (TDY), our largest holding, is the epitome of quality value. TDY has a well-managed, balanced portfolio of sensing and decision-support technologies across commercial and industrial end markets, including multiple secular growth areas spanning advanced machine vision, precision instrumentation, space and unmanned vehicles. TDY's economically-sensitive customer exposure is somewhat buffered by stable markets like pollution control, water, oceanography and climate monitoring. TDY's core markets are characterized by high barriers to entry and include niche specialized products and services unlikely to be commoditized. In a challenging quarter for large tech stocks, Teledyne shares hit an all-time high at the start of the year, after beating consensus earnings estimates and continuing to expand profit margins despite getting little help from its challenged short-cycle end markets (where TDY has some of its highest-margin products). This helped investors imagine what earnings power could be if short-cycle markets recover. TDY continues to execute on secular growth opportunities while demonstrating that its commercial businesses are more economically resilient than many tech-industrial peers. Despite this strong execution and the stock's recent performance, the shares still trade at the lower end of the relative valuation premium range TDY has carried over the past decade. As we witness a "reality check" spreading across a number of companies that were trading at what we consider undeserved valuations, we think TDY's prospects for strong relative performance remain bright.

BSD Analysis:
Heartland positions Teledyne Technologies as their largest holding and epitome of quality value investing. The manager highlights TDY's diversified portfolio of sensing and decision-support technologies across secular growth markets including machine vision, precision instrumentation, and aerospace. The investment thesis centers on the company's resilient business model with high barriers to entry and niche products unlikely to be commoditized. Despite challenging market conditions, TDY demonstrated strong execution by beating earnings estimates and expanding margins even without help from short-cycle markets. The manager views the current valuation as attractive, trading at the lower end of its historical premium range despite strong fundamentals. With secular growth opportunities and economic resilience compared to tech-industrial peers, Heartland expects continued outperformance as market valuations normalize.

Pitch Summary:
We consider Gates Industrial Corporation plc (GTES), one of the leading global manufacturers of belts and hoses used in vehicles and industrial machines, to be an all-weather stock set up to perform well relative to small-cap Industrials in all types of macro environments. Yet the shares have fallen 21.7% since Feb. 19 along with the entire Industrial sector amid concerns of a trade war. Ironically, the company's biggest end market is auto replacement parts, representing 36% of sales. The threat of tariffs significantly boosting the overall price of new cars should make consumers hold onto their existing vehicles longer, which should be good for Gates. If the macro environment deteriorates, we believe the company will face less downside pressure than most Industrials owing to the large percentage of revenues it derives from the less-cyclical replacement markets. On the other hand, should the macro environment improve, Gates could see significant revenue upside as cyclical Industrial end-markets have been pressured by a weak economy for multiple quarters. The company's recent self-help efforts have also led to margin improvement through material cost reduction and footprint optimization. Those moves should help offset any margin pressure that could occur from end-market weakness. The company appears to have significantly improved its balance sheet, with leverage currently at 2.2 times net debt to EBITDA, down from its pre-COVID-19 levels of 3-4 times. At this current leverage profile, Gates should be positioned to return more of its free cash flow to shareholders in the form of share repurchases. Yet the stock trades at just 13 times earnings and 9 times EBITDA, which is relatively low compared to other Industrial businesses with a similar margin profile.

BSD Analysis:
Heartland views Gates Industrial as an all-weather industrial play that should outperform regardless of macro conditions, despite the recent 21.7% decline amid trade war concerns. The manager highlights the defensive nature of the auto replacement parts business (36% of sales), which could actually benefit from tariff-induced higher new car prices as consumers extend vehicle ownership. The company's diversified end-market exposure provides downside protection during economic weakness while offering upside leverage during recovery. Recent self-help initiatives including cost reduction and footprint optimization have driven margin improvement and should offset potential end-market pressures. The significantly improved balance sheet with leverage declining from 3-4x to 2.2x net debt-to-EBITDA positions the company for increased shareholder returns through buybacks. Trading at 13x earnings and 9x EBITDA, the valuation appears compelling relative to industrial peers with similar margin profiles.

Pitch Summary:
Another defensive holding is FirstCash Holdings Inc. (FCFS), a leading operator of pawn shops in the U.S. and Latin America whose core driver of earnings is pawn loan balances. But unlike THG, which can thrive despite economic circumstances, FirstCash is positioned to do well because of the challenging economy. Traditionally, when the consumer discretionary sector is doing poorly, as was the case in the first quarter, FirstCash often has done well. In the first quarter, the stock rose over 16.5%, making it among the top performers among our holdings. Stretched by inflation, consumers are increasingly utilizing pawn loans to cover their financial needs. Contrary to popular belief, though, pawn businesses have limited credit risk, as companies can simply keep the collateral items being held if consumers fail to pay back their loans. The stock is trading at nearly 15 times earnings and just 11 times EBITDA with a growing dividend and an active buyback program in place. We believe this valuation represents a material discount to its historical multiple.

BSD Analysis:
Heartland positions FirstCash as a defensive play that benefits from economic stress, with pawn loan balances serving as the primary earnings driver. The manager emphasizes the counter-cyclical nature of the business, noting strong performance during consumer discretionary weakness and the 16.5% first quarter gain. Rising inflation is driving increased utilization of pawn loans among financially stretched consumers, creating a favorable operating environment. The business model's inherent credit protection through physical collateral significantly reduces risk compared to traditional lending. Trading at 15x earnings and 11x EBITDA with both dividend growth and share buybacks, the valuation appears attractive relative to historical multiples. The combination of defensive characteristics, limited credit risk, and compelling valuation metrics makes FCFS an appealing holding during uncertain economic conditions.

Pitch Summary:
An example is The Hanover Insurance Group, Inc. (THG), a property and casualty insurer. The company stumbled in recent years, thanks to heavy exposure to the upper Midwest, which has been hit with severe weather including deadly hailstorms. After falling short of earnings estimates recently due to the cost of damaging storms, the company has been taking steps to reduce its exposure to catastrophic events — for instance by writing less insurance in at-risk geographies and raising deductibles. THG has also made other money-saving moves, such as requiring customers to use sensors for early detection of water leaks in their homes. Those efforts led to strong fourth quarter results. In Q4, catastrophic losses contributed just 2.1% of Hanover's combined ratio, a key measure of profitability. That was substantially less than it has been in recent years. Meanwhile, Hanover has restructured its investment portfolio, which accounts for 60% of its earnings, to benefit from higher yields. This should go a long way toward boosting its net investment income this year. Yet despite these positive steps, the stock, with a steadily growing dividend, still trades at approximately 12 times 2025 earnings per share.

BSD Analysis:
Heartland presents a compelling turnaround story for The Hanover Insurance Group following significant weather-related losses in the upper Midwest. The manager highlights the company's proactive risk management initiatives, including geographic exposure reduction, higher deductibles, and innovative loss prevention measures like mandatory water leak sensors. The dramatic improvement in catastrophic losses to just 2.1% of the combined ratio in Q4 demonstrates the effectiveness of these self-help strategies. Additionally, the restructuring of the investment portfolio to capture higher yields should meaningfully boost net investment income, which represents 60% of earnings. Trading at approximately 12x 2025 earnings with a growing dividend, the valuation appears attractive for a property and casualty insurer that has successfully de-risked its operations. The combination of operational improvements and portfolio optimization positions THG well for enhanced profitability.

Pitch Summary:
We also added exposure in Insulet Corp. (PODD) by participating in its inaugural senior unsecured bond deal used to refinance part of its 2026 convertible notes. This marked a meaningful evolution in PODD's capital structure—from a growth-phase mix of converts and loans to something more befitting its scale and cash flow profile. We see it as a high-BB credit, anchored by a market leadership position in insulin delivery, strong free cash flow, and modest, declining leverage near 2.5x. Price talk came in at 7%, roughly 50 basis points wide of comparable high-quality healthcare credits--and 50 basis points wider than it would have been priced earlier in March before valuations in credit began to reset. That kind of mispricing doesn't just offer near-term yield. It sets up longer-term potential upside as our upgrade thesis plays out.

BSD Analysis:
Oakmark's investment in Insulet represents a strategic credit play on the company's capital structure evolution and market positioning. The fund participated in PODD's inaugural senior unsecured bond offering at a 7% yield, which they view as attractively priced given the 50 basis point spread widening from earlier March levels. The manager highlights Insulet's dominant position in the insulin delivery market, particularly through its Omnipod system, which provides a strong competitive moat. The company's financial profile shows strong free cash flow generation and improving leverage metrics at 2.5x, indicating solid credit fundamentals. Oakmark views this as a high-BB credit with upgrade potential, suggesting they expect the company's credit rating to improve over time. The timing of this investment coincides with broader credit market repricing, allowing them to capture value in a quality healthcare credit. The refinancing of 2026 convertible notes demonstrates management's proactive approach to optimizing the capital structure as the company matures beyond its growth phase.

Pitch Summary:
Stadio is a South African company focused on for-profit higher education, with a mission to widen access to quality tertiary education. It operates three institutions—STADIO Higher Education, Milpark Education, and AFDA—offering qualifications ranging from certificates to doctorates. These span fields such as education, commerce, law, IT, fashion, media, and design, delivered through campus-based, online, and distance learning formats. Stadio is one of the Fund's long-held positions. We began building it in 2019 and significantly increased our exposure during the depths of COVID. The company reported another set of stellar results this period. Strong operating leverage was evident: 8% student growth translated into 14% revenue growth, while disciplined cost control and margin expansion drove a +28% increase in EPS to 31cps. Cash conversion is excellent, with a rolling average of approximately 100% of EBITDA converting into free cash. The balance sheet is debt-free and in a net cash position. Return on equity continues to expand toward the 20%+ target. We believe this remains underappreciated by the market, as consensus continues to underestimate Stadio's high-growth profile. The supply-demand dynamics in South African higher education are compelling. With the ongoing collapse of government-subsidized public universities, fewer than 40% of qualified matriculants can be accommodated in the public system. The rest either attend private institutions (such as Stadio) or miss out entirely. There is a clear and visible runway for Stadio to more than double its student base from 50,000 to over 100,000 in the near future. Stadio recently broke ground on a new Cape Town campus. Once this capex is behind it, the business will require minimal additional investment to grow, benefitting from asset-light operating leverage. We believe Stadio is still in the early stages of a powerful J-curve.

BSD Analysis:
Desert Lion Capital presents a compelling bull case for Stadio, a South African for-profit higher education provider that has been a core holding since 2019. The manager highlights exceptional operating leverage with 8% student growth driving 14% revenue growth and 28% EPS expansion to 31 cents per share. The company demonstrates strong financial metrics including 100% EBITDA-to-free cash conversion, a debt-free balance sheet with net cash position, and expanding ROE approaching the 20% target. The investment thesis centers on favorable supply-demand dynamics in South African higher education, where government university capacity constraints leave 60% of qualified students seeking private alternatives. With current enrollment at 50,000 students and a clear pathway to over 100,000, Stadio offers significant growth potential through its asset-light model. The recent Cape Town campus expansion represents the final major capex requirement before benefiting from pure operating leverage. The manager views current market pricing as undervaluing this high-growth profile and believes the company is in the early stages of a powerful growth trajectory.

Pitch Summary:
TE Connectivity makes connectors for a wide range of uses such as automobiles, data centers and medical devices. Its main end markets, auto and industrial, have come under some cyclical pressure, which weighed on the stock and provided an attractive entry point to this strong business.

BSD Analysis:
The managers initiated a position in TE Connectivity, viewing cyclical weakness in the company's core end markets as an attractive entry opportunity. TE Connectivity manufactures connectors across diverse applications including automobiles, data centers, and medical devices, providing exposure to multiple secular growth themes. The company's main end markets of automotive and industrial have experienced cyclical pressure, creating temporary headwinds that weighed on the stock price. The managers view this as a temporary rather than structural challenge, allowing them to acquire shares in what they characterize as a strong business at attractive valuations. The diversified end market exposure provides some resilience, with data center and medical device applications offering growth potential. The investment represents a contrarian bet on cyclical recovery in automotive and industrial markets. TE Connectivity's connector technology remains essential across multiple industries, supporting the long-term investment thesis.

Pitch Summary:
Further supporting our emphasis on portfolio diversification, Industria de Diseno Textil (Inditex) is a global apparel, footwear and accessories retailer (its flagship brand is Zara) that offers us a quality compounder in the consumer discretionary sector. Inditex is the leader in fast fashion with strong margins and return on capital employed, a huge cash position on the balance sheet and a steady dividend policy. Shares came off recent highs following softer February comps, and we used the pullback to start a position.

BSD Analysis:
The managers initiated a position in Inditex as a quality compounder in the consumer discretionary sector, emphasizing portfolio diversification. They highlight Inditex's leadership position in fast fashion with strong operational metrics including robust margins and high return on capital employed. The company maintains a fortress balance sheet with substantial cash reserves and offers a steady dividend policy, appealing to the fund's income-focused mandate. The investment timing was opportunistic, capitalizing on a pullback following softer February comparable store sales. This temporary weakness provided an attractive entry point into what they view as a high-quality retail franchise. The Zara parent company represents exposure to global fashion retail with strong competitive positioning. The managers appear confident in the company's ability to navigate cyclical retail challenges while maintaining its market leadership.

Pitch Summary:
Tradeweb has been part of the Fund for just under two years. The company continues to strengthen its presence across asset classes that are still in the early stages of electronic trading adoption. February's strong trading volumes further solidify the company's leadership in its core market being rates or government bonds. More notably, Tradeweb has secured the top position in electronic trading for U.S. high-grade credit, capturing a 17.8% market share—driven by advancements in trading protocols and growth in portfolio trading. At the same time, the company is expanding into emerging asset classes, further diversifying its portfolio of offerings. With the structural shift toward market electronification and the backdrop of ongoing market volatility, we believe Tradeweb remains well-positioned for continued success.

BSD Analysis:
The manager maintains a bullish outlook on Tradeweb based on the company's market leadership in electronic fixed-income trading and structural industry tailwinds. Tradeweb has established dominant positions in both its core government bond market and the strategically important U.S. high-grade credit segment, where it captured 17.8% market share. The company benefits from ongoing electronification of traditionally voice-based fixed-income markets, representing a multi-year secular growth opportunity. Strong February trading volumes demonstrate the platform's resilience and market acceptance during volatile conditions. The expansion into emerging asset classes provides additional diversification and growth vectors beyond core markets. Market volatility actually benefits electronic trading platforms by driving volume and highlighting the efficiency advantages over traditional methods. The manager views Tradeweb as well-positioned to capitalize on the structural shift toward electronic trading across multiple fixed-income asset classes.

Pitch Summary:
Sea Limited delivered an impressive result with a healthy combination of strong growth and improving profitability. Revenue grew 37% to $5.0 billion – the fastest growth in nearly three years – and adjusted EBITDA grew 366% to $591 million. The company's core e-commerce business, Shopee, continued to extend its leadership across key markets, namely Indonesia and Thailand, with overall Gross Merchandise Volume (GMV) increasing 28% to $28.6 billion. Shopee's marketplace take rate also improved 160 bps year-on-year to 12.8%, driven by higher commissions and increased ad adoption. Importantly, recent fee hikes haven't slowed GMV growth, which is a testament to Shopee's pricing power driven by the value it creates for sellers.

BSD Analysis:
The manager presents a compelling bull case for Sea Limited based on exceptional operational momentum and improving unit economics. The company delivered its fastest revenue growth in nearly three years at 37%, while simultaneously achieving dramatic profitability improvements with adjusted EBITDA surging 366%. The core Shopee e-commerce platform demonstrates strong competitive positioning in key Southeast Asian markets, with GMV growth of 28% and meaningful take rate expansion of 160 basis points. The ability to raise fees without impacting GMV growth signals robust pricing power and seller dependency on the platform. This combination of accelerating growth, margin expansion, and pricing power suggests Sea Limited has achieved sustainable competitive advantages in its core markets. The manager views this as validation of Shopee's value proposition and market leadership position. The strong fundamentals support continued outperformance in the high-growth Southeast Asian e-commerce market.

Pitch Summary:
And finally, on to RPM Global, which grew into our top 5 positions during the month. Our investment thesis has always centred on the software business. In February, RPM announced the sale of its lower-margin, and more-cyclical, Advisory division -- and for what we think is a heady multiple relative to the business quality. Pleasingly, this leaves us with a pure software business going forward. (Don't worry, we won't bore you with the attractiveness of capital light, sticky enterprise software revenue streams for long-term investors like us.) We have long been fans of CEO Richard Matthews who has strong commercial acumen and an enviable track record of buying, integrating, and selling software companies. His earlier days at RPM were marked by dutiful cost management, followed by a period of acquisition of complimentary software code to build out the product suite. As that investment slowed, and the business steadily grew, the company's (excess) cash balance swelled. Since mid-2022 (when equity markets were sagging) RPM has steadily bought back stock, having spent over $20 million to acquire 5.3% of shares outstanding at an average level 43% below the closing price at the time of writing. This kind of capital allocation is what we've come to expect from a founder-minded business leader like Richard. While our investment thesis rests on the continuing steady growth of the software business, we are pleased that as investors we stand to receive a material, and very tax-efficient, return of capital from the Advisory sale proceeds in the coming months. Alongside this, there have been several M&A transactions in recent years that could spread to RPM Global.

Pitch Summary:
Turning to Nanosonics, which received U.S. Food and Drug Administration (FDA) clearance for its CORIS system during March. As a reminder, CORIS is focused on improved cleaning outcomes for flexible endoscopes, in particular as it relates to biofilm build up. We managed to visit the company's Macquarie Park R&D facilities late in the month to learn more about the device, its recent FDA approval, plus see it in real life. Looking under the hood of a CORIS machine, it's clear many experts across mechanical, electrical and software engineering, plus design, fluid dynamics, and biofilm science have contributed significantly to developing the product over many years. Plenty of work lays ahead on the path to commercialisation, and it's unlikely to be a straight line, but we are more positive on the opportunity and investors should be prepared to hear much more about this product in the years ahead. In the meantime, there's plenty more to learn about CORIS, its unit economics and market adoption pathway. One challenge we observed in Trophon's rollout was market education, as not all ultrasound probes are required to undergo high-level disinfection. Conversely for CORIS, education may prove to be less of a barrier, as all reuseable endoscopes are required to be cleaned to a high standard for (internal) re-use across patients. An automated process that delivers superior cleaning outcomes should hold considerable appeal in achieving consistent, improved patient outcomes. While we size the market for CORIS devices as smaller than Trophon, the high-margin consumable cycle stands to be multiples that of a Trophon. The company's existing sales network and hospital relationships may prove helpful in smoothing the adoption of CORIS. Also, as the c.80% market leader in flexible endoscope manufacturing, we expect Olympus is following along closely as they have much to gain from improved cleaning outcomes that; i) help mitigate FDA patient-infection concerns, and ii) puts single-use endoscope manufacturers further from their market.

BSD Analysis:
Lakehouse expresses increased optimism for Nanosonics following FDA approval of the CORIS endoscope cleaning system, representing a significant product expansion beyond the successful Trophon platform. The manager's facility visit revealed sophisticated engineering across multiple disciplines, demonstrating the company's deep technical capabilities and years of R&D investment. CORIS addresses a compelling market need with all reusable endoscopes requiring high-standard cleaning, potentially reducing market education barriers compared to Trophon's selective ultrasound probe requirements. The economics appear attractive with high-margin consumables expected to generate multiples of Trophon's revenue per device. Nanosonics' existing hospital relationships and sales infrastructure should facilitate CORIS adoption, while Olympus's 80% market share in flexible endoscope manufacturing creates strategic alignment opportunities. The FDA approval validates the technology and opens the large U.S. market, though commercialization will require patience and execution. Lakehouse acknowledges the pathway won't be linear but sees significant long-term value creation potential.

Pitch Summary:
Catapult hosted an investor day during the month, which attracted strong institutional interest -- unsurprising given the company's strong progress, dominant market position and recent inflection to profitability. CEO Will Lopes and CFO Bob Cruickshank outlined their ambition to scale annual contract revenue from approximately US$100 million today to US$1 billion. Market penetration remains early at around 17%, with a pathway to reach 35–50% as the business expands into new geographies and broadens its presence in collegiate and women's sports. In tandem with growing team numbers, management aims to lift average contract value by 4–6 fold to more than US$100,000 (currently US$26,100) through upselling more-advanced software, cross-selling video solutions, introducing new products, and applying routine price increases. As part of this, the Chief Product Officer unveiled Catapult's latest wearable, Vector8 -- a next-generation device that captures a deeper data set; enabling faster insights, plus more informed training and in-game coaching decisions. Looking ahead, Catapult reports its full-year results in May, where fiscal 2025 guidance has been reaffirmed. With an undemanding price backed by strong execution, market leadership and significant runway, we believe the business continues to warrant its place among the Fund's largest positions.

BSD Analysis:
Lakehouse highlights Catapult's ambitious growth trajectory with management targeting 10x revenue growth from $100 million to $1 billion in annual contract revenue. The company operates in an underpenetrated market with only 17% penetration and a clear pathway to 35-50% through geographic expansion and entry into collegiate and women's sports. Key value drivers include increasing average contract values by 4-6x to over $100,000 through software upselling, video solution cross-selling, and regular price increases. The launch of Vector8, a next-generation wearable device with enhanced data capabilities, demonstrates continued innovation and competitive differentiation. Catapult's dominant market position and recent profitability inflection provide strong fundamentals supporting the growth strategy. Management's reaffirmed fiscal 2025 guidance indicates confidence in execution capabilities. The combination of market leadership, significant runway for expansion, and attractive valuation supports Lakehouse's conviction in maintaining Catapult as a top portfolio holding.

Pitch Summary:
The biggest detractor this month was Pinnacle (-21.8%) as negative market sentiment disproportionately weighed on the diversified investment manager, as is often the case. Gloomy press around Pinnacle's private credit business, Metrics Credit Partners, also cast a long shadow and warrants. As Australia's ninth largest business lender -- after the big 4 banks, Macquarie and a few offshore banks -- and the tallest poppy in the private credit field, Metrics is a worthy target. Consequently, any problem projects they have tend to be well publicised. On the flipside, as the biggest home-grown and most established private credit provider, Metrics are among the more experienced operators with considerable resourcing to navigate debt workouts. Although some in the market think it is inappropriate for a debt fund to assume equity positions in failed loans -- as Metrics does -- to us this seems measured, and pragmatic, compared to a traditional banking approach. An external proof point to Metric's worth, and Pinnacle's capital allocation capability, came to light during the month. A consortium including the National Pension Service of Korea, paid $50 million for a 4.17% stake in Metrics – implying a 9x return on Pinnacle's 2018 investment price, excluding follow on investments -- and providing additional capital for the business to continue its growth. We would not be surprised to see Metrics opportunistically hoover up smaller providers, or portfolios, if offered by market conditions. From a Pinnacle perspective, over 85% of aggregate funds under management sit outside Metrics, spread over another 17 affiliates, and diversified across many different asset classes. Despite its share price being hyper-reactive to listed market sentiment, we remain happy long-term holders.

BSD Analysis:
Lakehouse maintains conviction in Pinnacle despite recent volatility, viewing the sell-off as market overreaction to negative sentiment around private credit. The manager emphasizes Pinnacle's diversified structure with over 85% of assets under management outside Metrics across 17 different affiliates, reducing concentration risk. A key validation came through the National Pension Service of Korea's $50 million investment in Metrics at a 4.17% stake, implying a 9x return on Pinnacle's 2018 investment and demonstrating strong capital allocation skills. Lakehouse defends Metrics' pragmatic approach to debt workouts, including taking equity positions in failed loans, as superior to traditional banking methods. The manager sees potential for Metrics to consolidate smaller private credit providers during market stress. Pinnacle's position as Australia's ninth largest business lender provides scale advantages and market leadership in the growing private credit sector. The diversified affiliate model across multiple asset classes offers defensive characteristics and growth optionality.

Pitch Summary:
FINEOS is a leading provider of core software systems for the global life, accident, and health insurance industry. The company serves seven of the ten largest group life and health insurers in the U.S. and six of the largest life insurers in Australia. Founded in 1993, FINEOS is headquartered in Dublin (Ireland) and led by its founder, Michael Kelly, who retains a majority stake of over 50%. The insurance software industry is highly entrenched, with many companies still reliant on outdated mainframe systems – leaving a large legacy issue to solve. Given past challenges with costly and failed implementations, insurers tend to be cautious and slow-moving when adopting new critical workflow platforms. Similarly, FINEOS listed on the ASX in 2019 and has had a bumpy ride due to long sales cycles, and multiple capital raisings; for product development and the failed acquisition of Limelight in the heady days of 2020. We have followed FINEOS since IPO, however it hasn't presented as an attractive investment opportunity until more recently. Despite numerous hurdles, the business made meaningful progress. It has remained focused on improving its product offering and successfully completed major implementations with New York Life and Guardian Life -- key wins that we believe will serve as strong reference points for future deals. As the company moves beyond a heavy product-driven investment phase, adds large and successful implementations to its resume, and works with an expanded partnership network, we have a clearer view toward profitable growth. The company's financials reflect a tough few years due to its heavy investment, combined with the revenue churn following the poor Limelight acquisition. Currently, FINEOS trades at 2.7x forward Enterprise Value to Revenue, an attractive valuation for a business with strong retention and improving operating metrics. Notably, FINEOS is becoming a higher quality business as revenues increasingly shift to subscription, which are higher margin and recurring in nature. With its past issues in the rear-view mirror, we see a more efficient, product-led organisation poised to inflect past free cash flow breakeven. FINEOS can now focus on self-funding growth and expanding earnings for shareholders. With an aligned founder and an improving business outlook, we are excited for the future of this investment.

BSD Analysis:
Lakehouse presents a compelling turnaround thesis for FINEOS, emphasizing the company's evolution from a troubled IPO to a more focused software provider. The manager highlights FINEOS's dominant market position serving seven of the ten largest U.S. group life and health insurers, providing significant competitive moats in a highly entrenched industry. Key catalysts include successful implementations with marquee clients New York Life and Guardian Life, which should serve as powerful reference points for future sales. The valuation appears attractive at 2.7x forward EV/Revenue for a business transitioning to higher-margin subscription revenues with improving retention metrics. Management's shift toward profitable growth and approaching free cash flow breakeven represents a significant inflection point. The founder-led structure with Michael Kelly retaining majority control provides strong alignment with shareholders. Lakehouse's patient approach, having followed the company since IPO, demonstrates conviction in the long-term opportunity as legacy insurance systems require modernization.

Pitch Summary:
For some time we have been supportive of holding hard asset producers such as well financed, profitable miners and their allied providers. A standout performer has been a Canadian producer, New Gold (NGD), owner of the Rainy River gold mine and New Afton copper/gold mines. The stock has more than doubled this past year, buoyed by increased production, higher grades and reserves, plus lower costs providing a substantial increase in free cash flow. With all-in sustaining costs (AISC) less than $1,400 per ounce, NGD is positioned to prosper. However, now priced in excess net asset value, NAV, we have taken advantage of increased interest and higher prices by trimming holdings. The proceeds were utilized to increase our holdings in two other miners which our research indicates are priced at 50% discounts to their NAV's.

BSD Analysis:
Heartland demonstrates disciplined portfolio management by trimming New Gold after the stock doubled in value over the past year. The fund originally identified NGD as an attractive hard asset play with strong operational metrics including increased production, higher grades and reserves, and lower costs driving substantial free cash flow generation. With all-in sustaining costs below $1,400 per ounce, NGD maintains competitive cost positioning in the current gold price environment. However, the fund's decision to trim reflects valuation discipline as the stock now trades above net asset value. This profit-taking strategy allows reallocation to other miners trading at 50% discounts to NAV, demonstrating active portfolio optimization. The position management illustrates the fund's commitment to buying undervalued assets and selling when fair value is exceeded. NGD's operational improvements and cost structure remain intact, but valuation no longer offers compelling risk-adjusted returns relative to other opportunities in the mining sector.

Pitch Summary:
While Columbus McKinnon is an example of a stock that was negatively impacted by policy uncertainty (at least temporarily), PotlatchDeltic (PCH) is a company that could benefit from recent policy changes. Potlatch, a timber REIT that focuses on harvesting sawlogs and producing wood products, has been in our portfolios for quite some time. When we first entered this position, it stood out as a domestic provider of homebuilding materials. That remains a highly relevant point, given the supply gap of housing in the United States and tariffs established by the Trump administration on Canadian timber products. The new levies, on top of those already in place, brings the total tax on Canadian lumber to over 50%. As PCH is the only American wood products company that manufactures entirely in the U.S, it is likely to be a primary beneficiary of the rising cost of imported timber. Potlach's harvest volume is mostly comprised of Southern Yellow Pine, which may not be a perfect substitute in terms of quality compared to trees historically imported from Canada but will likely be preferred by the market in terms of cost. We value PCH, which is currently trading at around $45 per share, with a target price of $54.

BSD Analysis:
Heartland positions PotlatchDeltic as a direct beneficiary of Trump administration trade policies targeting Canadian lumber imports. The fund highlights PCH's unique competitive advantage as the only American wood products company manufacturing entirely in the U.S., creating a natural hedge against tariff impacts. With total taxes on Canadian lumber exceeding 50%, PCH's Southern Yellow Pine products become increasingly cost-competitive despite potential quality differences. The investment thesis centers on the structural housing supply shortage in the United States, which should drive sustained demand for domestic lumber products. PCH's timber REIT structure provides additional income generation through timberland ownership and harvesting operations. Trading at $45 with a $54 target price implies 20% upside potential. The tariff protection creates a durable competitive moat that should support margin expansion and market share gains. This represents a classic policy-driven value opportunity where regulatory changes create tangible economic benefits for domestic producers.

Pitch Summary:
A good example is Columbus McKinnon Corp. (CMCO), which we initially added to our Strategy in the fourth quarter. The company designs, manufactures, and distributes materials, handling products, and systems used in a variety of industrial applications, including lifting, precision conveyance, and linear motion. Historically, CMCO's growth has been largely driven by changes in manufacturing activity. A new CEO joined the business in June 2020 with the goal of higher growth and margin applications while increasing the recurring revenue mix. CMCO, however, reported a softer recent quarter due to slowing industrial demand driven by U.S. policy uncertainty. The company also announced a $2.7 billion acquisition of competitor Kito Crosby, which sent the stock plummeting 41% due to uncertainty around execution and an increased leverage profile of 4.8x upon closing. We believe Columbus McKinnon offers investors a compelling risk/reward case and a strong catalyst as it seeks to reduce leverage and improve the growth and margin profile of the consolidated business. Management, which has been aggressively purchasing the stock in the open market during the recent sell-off, is targeting mid-20% EBITDA margins upon integration. That's up from an estimated 15.5% in FY25 pre-acquisition. At the end of the quarter, the stock was trading at about $17 a share. Our current target price target of $54 would imply a valuation of 10.5 times Enterprise Value to EBITDA. Upon execution of the acquisition, however, we believe CMCO should be treated similarly to its industrial peers trading an at average of 12x EV/EBITDA.

BSD Analysis:
Heartland presents a compelling turnaround thesis for Columbus McKinnon following a major acquisition-driven selloff. The fund views the 41% stock decline after the $2.7 billion Kito Crosby acquisition as an overreaction, creating an attractive entry point at $17 per share. Management's aggressive insider buying during the selloff validates the investment thesis and demonstrates confidence in execution. The acquisition is expected to drive significant margin expansion from 15.5% to mid-20% EBITDA margins upon integration, representing substantial operational leverage. With a leverage profile of 4.8x upon closing, deleveraging becomes a key catalyst for multiple expansion. The $54 target price implies 10.5x EV/EBITDA, which appears conservative relative to industrial peers trading at 12x multiples. The new CEO's strategic focus on higher-margin applications and recurring revenue mix should drive sustainable growth beyond the acquisition benefits.