Investment Pitches

Pitch Summary:
AMETEK, in the industrials sector, makes electronic instruments and electromechanical devices. The company's position as a supplier of high-quality instruments to "cannot fail" industries, such as aerospace applications, health care equipment and marine instrumentation, has made it the dominant player in several of these high-value, but niche areas. Additionally, the company has a strong track record of successfully integrating and raising the margin profile of acquired businesses. Subjected to the same destocking malaise weighing on the broader industrials sector, we were able to capitalize on the company trading at cycle lows to establish a position in this best-in-class industrials business.

BSD Analysis:
ClearBridge established a new position in AMETEK at attractive valuations during the industrial sector downturn, viewing it as a best-in-class opportunity. The managers emphasize AMETEK's exposure to mission-critical applications in aerospace, healthcare equipment, and marine instrumentation where product failure is not an option, creating pricing power and customer stickiness. They highlight the company's dominant positions in high-value niche markets that provide defensive characteristics and sustainable competitive moats. ClearBridge values AMETEK's proven acquisition strategy and ability to improve margins of acquired businesses through operational excellence. The fund capitalized on cyclical weakness and destocking pressures to acquire shares at cycle-low valuations. They view the current industrial malaise as temporary while AMETEK's underlying market positions remain structurally advantaged. This represents a contrarian investment in a quality industrial company with specialized products and strong execution capabilities during a cyclical trough.

Pitch Summary:
Our largest new addition to the portfolio was Lineage, in the real estate sector, which is the world's largest temperature-controlled warehouse REIT. The company's expanding geographic footprint along major transportation centers, rather than at the beginning or endpoint of delivery routes, has made it a preferred partner for companies producing and shipping frozen foods. Additionally, the company has shown a proven track record of successfully deploying capital to expand its geographic footprint and secure a stronger position within its core market.

BSD Analysis:
ClearBridge initiated a position in Lineage as their largest new portfolio addition, attracted by the company's dominant position as the world's largest temperature-controlled warehouse REIT. The managers highlight Lineage's strategic geographic positioning along major transportation hubs rather than endpoints, creating operational efficiencies and making it a preferred logistics partner for frozen food companies. They emphasize the company's proven capital allocation track record, demonstrating management's ability to successfully expand market share through strategic investments. The fund appears to value Lineage's specialized infrastructure assets that benefit from growing demand for cold storage solutions. ClearBridge views the company's market-leading scale and strategic locations as creating sustainable competitive advantages in the temperature-controlled logistics sector. The investment thesis centers on Lineage's ability to capitalize on structural growth trends in frozen food distribution and e-commerce fulfillment. This represents a specialized REIT play with defensive characteristics and growth potential.

Pitch Summary:
Stock selection in the industrials sector, meanwhile, weighed on quarterly performance. The largest detractor in the sector was Copart, which provides online auctions and remarketing services for automotive vehicles globally. The company's stock declined after it announced quarterly earnings that came in below market expectations, driven by some nonrecurring tax issues, storm preparation costs and labor expenses. However, the company has been a strong, multiyear outperformer, and we believe that its position as the dominant player in the automotive auction and remarketing service industry will continue to help drive attractive long-term performance.

BSD Analysis:
Despite near-term headwinds, ClearBridge maintains conviction in Copart's long-term prospects based on its dominant market position in automotive auctions and remarketing services. The managers view the recent earnings disappointment as driven by temporary factors including nonrecurring tax issues, storm preparation costs, and elevated labor expenses rather than fundamental business deterioration. They emphasize Copart's multi-year track record of outperformance, suggesting confidence in management's ability to navigate cyclical challenges. The fund's thesis centers on Copart's market-leading position providing sustainable competitive advantages and pricing power. ClearBridge appears to view the current weakness as a temporary setback for a structurally advantaged business model. The company's global scale and online auction platform create barriers to entry that should support long-term value creation. This represents a contrarian position where the managers are looking through short-term noise to focus on enduring competitive strengths.

Pitch Summary:
Health care was also a positive contributor in the third quarter. Our top-performing holding in the sector was Doximity, which operates a digital platform for medical professionals that supports collaboration, patient care and telehealth. The company has a history of consistent execution and, while it stumbled last year in effectively communicating realistic guidance and outlooks, it appears that management has regained investors' trust through several quarters of solid execution.

BSD Analysis:
ClearBridge maintains confidence in Doximity despite previous management communication issues, viewing the company's recent execution as evidence of a successful turnaround. The managers highlight Doximity's comprehensive digital platform serving medical professionals across collaboration, patient care, and telehealth functions. They emphasize the company's historical track record of consistent execution, suggesting the prior year's guidance missteps were an aberration rather than a fundamental business issue. The fund appears to value management's ability to rebuild investor confidence through improved operational performance and communication. Doximity's position as the top health care performer in the quarter validates the managers' thesis about the company's recovery trajectory. The platform's multi-functional approach to serving healthcare professionals provides diversified revenue streams and defensive characteristics. ClearBridge views this as a quality healthcare technology play with restored management credibility.

Pitch Summary:
Stock selection in the IT sector was the greatest contributor to relative performance, driven by AppLovin, which operates a software-based platform for advertisers to enhance the marketing and monetization of their content, particularly in mobile apps. We believe the company is one of the best examples of an AI beneficiary in the mid cap market, as it has already incorporated AI capabilities into its platform, translating into more effective take rates on clients' mobile games and transactions. We believe mobile games represent only the tip of the iceberg of AppLovin's potential for its AI-enabled platform and that it has a strong growth trajectory over the next few years.

BSD Analysis:
ClearBridge views AppLovin as a premier AI beneficiary in the mid-cap space, highlighting the company's successful integration of artificial intelligence into its advertising platform. The managers emphasize AppLovin's ability to generate higher take rates through AI-enhanced targeting and optimization for mobile game developers. They see significant expansion potential beyond mobile gaming, suggesting the AI-enabled platform could address broader advertising markets. The fund's conviction stems from AppLovin's demonstrated execution in monetizing AI capabilities and its positioning for sustained growth. This represents a technology-driven growth story where AI implementation is already driving tangible business results rather than speculative future benefits. The managers appear confident in the company's competitive moat and scalability of its platform technology. AppLovin was identified as the top contributor to the strategy's IT sector outperformance during the quarter.

Pitch Summary:
We purchased shares in a recent initial public offering ("IPO") of Chain Bridge Bancorp ("Chain Bridge" or "CBNA"). Chain Bridge has a specialty deposit business providing banking services to Republican political campaigns and political action committees. These political campaigns deposit their funds in the bank in non-interest bearing checking accounts. Because of the zero-cost deposits, the bank invests its balance sheet conservatively and still earns high returns. We think the shares of Chain Bridge provide an attractive risk/reward at the current share price. Here's our investment thesis: 1. Unique Customer Focus – Chain Bridge's specialty deposit business brings zero-cost deposits to the bank. Chain Bridge's customers are the Treasurers of Republican political campaigns and Political Action Committees ("PACs"). These customers value the ability to open accounts quickly with a bank that understands their accounts. These customers have a lot of money moving in and out of their accounts, so they are not interested in earning interest. Instead, they are concerned about their transactions getting completed in a timely manner. Chain Bridge's bankers are focused on serving these customers. 2. Deposit Franchises in Demand – After the Regional Bank Crisis in March 2023, banks with strong deposit franchises have been in demand. We believe investors will recognize the value of Chain Bridge's deposit franchise. 3. High Returns – Chain Bridge has posted high returns on equity. We expect returns to be diluted in the near-term while the bank digests the fresh capital raised in the IPO. However, we also expect the bank to leverage its fixed expense base and potentially generate higher returns going forward as it continues to grow. 4. Virtually Zero Credit Risk – Chain Bridge has a very small loan portfolio. 80% of its loan portfolio is single-family mortgages. Since the bank started in 2007, total loans charged-off are less than $300k. 5. Very Liquid Balance Sheet – Chain Bridge has a very liquid balance sheet. Having a liquid balance sheet provides stability especially when the stock market gets concerned about a potential recession and sells down the regional banking sector. We expect CBNA to trade with a significantly lower beta than the average regional bank. k. Management – Peter Fitzgerald is the Founder and Chairman of Chain Bridge. He is a former U.S. Senator from Illinois. His father started and grew Suburban Bancorp in Chicago before selling it to Bank of Montreal in 1994. Fitzgerald was the general counsel at Suburban. His brothers currently own several private banks in Illinois. Fitzgerald brings Republican credibility to the bank. We believe Fitzgerald is a prudent banker who excels at risk mitigation. We also think he will sell the bank when the bank achieves a premium valuation. 7. Valuation – Chain Bridge IPO'd at $22. We estimate Q3 tangible book value will be a pro forma $21.50 after adjusting for the IPO. We note that book value is lower if we adjust for losses in the bank's Held-to-Maturity bond portfolio, but this issue will resolve itself in the coming years. m. Attractive Acquisition for a Mid-size Bank – We believe Chain Bridge Bank would be an attractive acquisition for banks that would appreciate its deposit franchise. Ideal acquirers are Axos Bank, Enterprise Financial Services, and Western Alliance Bancorp. All three of these banks have niche deposit gathering franchises, and could easily absorb another deposit gathering franchise by acquiring CBNA. We understand that the Too Big to Fail banks don't want the headline risk of providing banking services to political campaigns. We believe mid-sized banks can make the business decision to endure the headline risk. Some downsides to the Chain Bridge story are worth noting, highlighted by the following points: 1. Legacy Bond Portfolio – Chain Bridge invests in short-term bonds, but even short-term bonds sustained losses during the rate increases of 2022-23. Chain Bridge does have some longer-term municipal bonds in its investment portfolio which will take longer to mature. We are confident that Chain Bridge has learned from this and will keep its bond portfolio invested in short-term maturities going forward. 2. Cyclicality of the Business – Chain Bridge's deposit base is cyclical with peaks during both Presidential and Mid-Term election years. This will cause earnings to decline in non-election years. Some investors will avoid investing in the bank due to the volatility in earnings. We are less concerned due to the high-quality nature of Chain Bridge's business. 3. Dual-class Structure – Chain Bridge Bancorp has a dual-class stock structure. The stated reason is to prevent an activist investor from making a political claim that would damage the bank's business. We disagree with this reasoning and believe that the dual share class should be collapsed. Some equity index providers will not add companies with super-voting shares to their indices. With passive ownership of stocks so high in the current environment, we believe Chain Bridge's dual-class structure will result in lower passive ownership of the stock and a lower valuation. 4. Small Company, Low Liquidity – Chain Bridge Bancorp has a small market cap and a limited float. We expect trading in the shares to average less than 30k shares a day going forward. Some larger institutions will avoid the stock due to the lower trading volumes. 5. Unseasoned Stock – As a recent IPO, CBNA is an unseasoned stock. At most, we expect three sell-side brokerage firms to publish research reports on the company. Very few investors know the story of CBNA. At the current stock price, Chain Bridge Bancorp presents an attractive asymmetrical investment opportunity. At tangible book value, investors are paying nothing for a very attractive deposit gathering franchise. We believe Chain Bridge will grow tangible book value while we wait for others to recognize the value of their franchise.

BSD Analysis:
Gator Capital presents a compelling thesis on Chain Bridge Bancorp, a specialty bank serving Republican political campaigns and PACs with zero-cost deposits. The manager highlights the bank's unique niche franchise that generates high returns on equity through conservative balance sheet management funded by non-interest bearing deposits. Key strengths include virtually zero credit risk with minimal loan losses since 2007, a highly liquid balance sheet providing recession resilience, and experienced management led by former Senator Peter Fitzgerald. The investment trades near tangible book value of $21.50, offering asymmetric upside as the market recognizes the deposit franchise's value. However, risks include earnings cyclicality tied to election cycles, a dual-class structure limiting institutional ownership, and low liquidity as a recent IPO. The manager views potential acquisition by mid-sized banks like Axos or Western Alliance as a viable exit strategy, given the franchise's attractiveness to niche deposit gatherers.

Pitch Summary:
Questionable financials; EBITDA inflated by ~50% and cash flows inflated by ~252%; aggressive financial engineering by acquiring agents that were already working with the company; about to lose its most profitable underwriter;

BSD Analysis:
BWIN operates online sports wagering/casino platforms. Bears cite regulatory overhang, intense competition, and high CAC. Market saturation in Europe limits growth, U.S. expansion requires costly state licenses. Profitability hampered by promo-heavy marketing. Catalysts: regulatory changes, license renewals, churn, tax regimes. Counterpoints: online betting is secularly growing, but BWIN lacks scale vs. Flutter/Entain/DraftKings.

Pitch Summary:
As recently announced, the fund has extended a loan of approximately $2.3 million to BaM. The primary use of proceeds is to enable the continued buildout of BaM's unfinished Illinois and New Jersey dispensaries. Building out the dispensaries as quickly as possible helps retain their value as strategic assets - BaM can either push forward with operating the assets as quickly as possible to take market share, or it will be in a better position to attain reasonable valuations in sales. Either way, we feel that the asset base is worth more than Bengal's combined debt investments in BaM, and think that the fund is being properly compensated for the risk incurred. The term loan carries 18% annual interest, paid monthly in cash, as well as a 5% original issue discount, sits senior secured on top of BaM's capital stack, and matures in 24 months. As part of issuing the term loan, BaM's convertible debentures (in which the fund holds a position) were also modified - the interest rate was increased to 15% (50% cash and 50% paid-in-kind), as well as the convertible debentures now becoming secured in second position behind the term loan. Additionally, any key asset sales or extraordinary proceeds received by BaM must, per the terms of the term loan and convertible debentures, be used to pay off first the term loan and then the convertible debentures.

BSD Analysis:
Bengal Capital has taken a debt-focused approach to Body and Mind, extending a $2.3 million term loan to complete dispensary buildouts in Illinois and New Jersey. The investment structure prioritizes downside protection with 18% annual interest, 5% original issue discount, and senior secured positioning. The fund views BaM's asset base as worth more than their combined debt investments, providing asset coverage. The loan enables BaM to complete strategic dispensary assets that can either generate market share through operations or achieve better valuations in potential sales. Bengal modified existing convertible debentures to 15% interest (half cash, half PIK) in second lien position. The 24-month maturity and mandatory debt paydown from asset sales provide additional protection. This appears to be a distressed credit play rather than an equity growth story, with Bengal seeking attractive risk-adjusted returns through secured debt rather than betting on operational turnaround.

Pitch Summary:
Last quarter, we converted the vast majority of our stock into non-traded multiple voting shares so that the company could keep its FPI status for another year (read: keep compliance costs lower by not having to comply with the full gamut of US securities laws). We patted ourselves on the back for being such committed long term investors. This quarter, at the company's request, we converted back to "normal" stock since the company is simplifying its capital structure in anticipation of being a typical SEC reporting company next year - but we still are patting ourselves on the back as long term investors! As New Jersey was transitioning into its adult use market, the cannabis industry was experiencing a dearth of capital availability - even worse than the situation today. We believe this led to less capacity being built to serve a burgeoning adult use market than would typically be the case, which in turn has created an environment where wholesale pricing should stay robust for longer than usual, producing a longer period of surplus profits. We believe this will be a tailwind to Grown Rogue's New Jersey flower sales starting towards the end of this year, and look forward to seeing how the company does there. The paradigm example, which we have written about many times before, is Grown Rogue. In looking at their results, we saw that they could make a small profit even in one of the most competitive states in the country. We believed that the kind of operational rigor that Grown Rogue showed would create substantial profits when taken to new markets. Michigan was the first demonstration, and we believe that Grown Rogue's upcoming entry into New Jersey will continue its impressive trajectory. Grown Rogue's operational rigor is made up of many factors both big and small, but they are all contained roughly in the area of indoor craft cultivation. Broadly, this is an operational competence that we believe "travels" well when mapped against an achievable number of new opportunities- it is not difficult to see how an edge in craft indoor cultivation in a competitive market translates into a new, less competitive, one. Critically, it is also easy to see what did not contribute to Grown Rogue's edge: state regulatory structure. The high amount of licenses in Oregon provide no meaningful barrier to entry - a company survives or dies on its operations. The lack of regulatory factors contributing to Grown Rogue's success make it, paradoxically given the often myopic focus on "limited license markets," easier to underwrite its continued success. Grown Rogue is sometimes compared to other small cannabis operators that have been able to demonstrate consistent cash flows in their home markets, but these comparisons miss the critical differentiator of Grown Rogue: when you break down the reason for their success to operational competence, you can build a much more "firm" trajectory of future success in taking that operational competence to other markets. Many of the other small operators Grown Rogue is compared to had a different road to achieving their relative success, and that road often involved at least some competitive advantage from regulations like limited retail licensing. At Grown Rogue's NJ target production of 1,000 pounds of whole flower per month, that's easily $4 million per year in extra cash flow from the start - a huge difference in capital returns. And, exactly the kind of economics that drive a deservedly high multiple. Skymint, a Michigan operator which is currently being parted out in receivership after failing, grew cannabis at $1,000 per pound in costs, according to a recent article (we are assuming this includes attributed overhead, even though it likely refers just to COGS). Skymint owes more than $120 million to its lender, and also had IIPR properties in which north of $50 million was invested. Yet, its $1,000/lb cost is significantly higher than our conservative estimate of Grown Rogue's (4 Wall EBITDA costs including attribution of in-state overhead but not general corporate overhead such as public company reporting obligations, etc.) of $600-700/lb. At the end of the maturation cycle, the cost difference (despite the multiple orders of magnitude of invested capital difference!) is the difference between death and survival. But transplant these same numbers to early in a market like New Jersey and operational rigor still makes an enormous difference: that $300/lb+ in cost difference falls straight to the bottom line.

BSD Analysis:
Bengal Capital presents a compelling bull case for Grown Rogue based on superior operational execution and cost advantages. The fund highlights Grown Rogue's ability to generate profits in Oregon's highly competitive market with production costs of $600-700 per pound versus failed competitor Skymint at $1,000 per pound. This operational rigor in indoor craft cultivation creates a sustainable competitive advantage that translates well to new markets. The New Jersey expansion represents a significant catalyst, with limited capacity buildup during the adult-use transition expected to maintain robust wholesale pricing longer than typical. Bengal projects $4 million in annual incremental cash flow from New Jersey operations at 1,000 pounds monthly production. The company's success stems from operational competence rather than regulatory advantages, making future growth more predictable and deserving of premium valuation multiples. Michigan has already validated this thesis, and New Jersey should continue the trajectory.

Pitch Summary:
After the end of Q3, Bengal partner Josh Rosen left as Vireo CEO and departed from the board. In our view (our bias should be apparent), Josh demonstrably improved Vireo's trajectory, most notably leaving the company with a more flexible balance sheet and a significantly improved operational foundation, positioning Vireo to capitalize on the ample opportunities in front of it - most notably the anticipated launch of adult-use sales in their home market of Minnesota in 2025.

BSD Analysis:
Bengal Capital maintains a position in Vireo following the departure of their partner Josh Rosen as CEO. The fund credits Rosen with improving the company's balance sheet flexibility and operational foundation during his tenure. The key catalyst for Vireo is the anticipated launch of adult-use cannabis sales in Minnesota in 2025, which represents a significant market expansion opportunity. The company appears well-positioned to capitalize on this transition from medical-only to adult-use sales. However, the CEO transition creates some uncertainty around execution of the growth strategy. The fund's neutral stance reflects confidence in the improved operational foundation while acknowledging the leadership change. Minnesota's adult-use market launch could provide meaningful revenue growth for Vireo given their established presence in the state.

Pitch Summary:
We have been working hard to get fair value realized across the portfolio. In September, we sent an open letter to the IWG Board of Directors, highlighting what we believe is a substantial opportunity for IWG to relist in the United States (it trades on the LSE today despite over 50% of profits being derived in North America) and achieve a significant multiple rerating. The key highlights of our letter were that IWG should re-list in the US, begin an aggressive buyback program as soon as possible, and sell the business if those two do not get fair value realized. We think IWG will likely rerate over the next 12-24 months, as the fee income from the managed and franchised business starts to ramp significantly in 2025. We think investors are not modeling that ramp appropriately, and IWG will beat and raise numbers through 2025 and 2026. As they are both beating numbers and the EBITDA generation is higher-quality given its capital-light nature, we believe the stock will begin to rerate.

BSD Analysis:
Buckley Capital has taken an activist approach with IWG, sending an open letter to the board advocating for value realization strategies. The manager's thesis centers on a geographic listing arbitrage opportunity, as IWG trades on the LSE despite generating over 50% of profits in North America where workspace companies typically command higher multiples. The key catalyst is the significant ramp in fee income from managed and franchised locations starting in 2025, which the manager believes is under-modeled by investors. This higher-quality, capital-light revenue stream should drive multiple expansion as EBITDA grows. The activist strategy includes three clear value realization paths: US relisting for multiple arbitrage, aggressive buybacks to return capital, or outright sale if other measures fail. The manager expects IWG to consistently beat and raise guidance through 2025-2026, driving re-rating as the market recognizes the improving business quality and growth trajectory.

Pitch Summary:
We recently added Caesars Entertainment (CZR) to our portfolio at an average price of ~$37 per share. We believe that in owning CZR, we are getting world-class assets in both its owned casino real estate and digital businesses - which will comprise almost 70% of 2025 EBITDA - while paying a rock-bottom price. With three important catalysts about to materialize in the next 12 months–significant deleveraging, the digital business inflecting to substantial profitability, and massive FCF generation–we believe investor enthusiasm will turn more positive and the shares will re-rate higher. Caesars currently has an $8.6 billion market cap. We believe it could trade 50% to 100% higher within the next 12-24 months. CZR as it exists today was formed in July 2020 by the merger of legacy Caesars Entertainment and Eldorado Resorts. Eldorado's management, led by CEO Tom Reeg, who has an outstanding track record of increasing shareholder value, took over CZR's operations. Reeg's focus on maximizing long-term FCF and deleveraging the business aligns with shareholders' interests. He holds 700,000 shares when fully vested (worth $25 million). In the company's brick & mortar segments (the Las Vegas & Regional divisions) CZR owns or manages 52 domestic properties in 18 states, with 47% of revenue from casino table games, 33% from hotels and food & beverage, and 11% from entertainment and other managed services. In Caesars Digital, the company operates both iGaming and Online Sports Betting (OSB) web-based operations under its brand name. The shares are trading at 5-6x 2025 FCF, which is a significant discount to the roughly 18x FCF multiple which Las Vegas assets have traded at over the past decade. Over half of EBITDA is supported by owned real estate. Transaction comps for irreplaceable assets like the Bellagio and Cosmopolitan in Las Vegas have traded at 15-20x EBITDA multiples, covering ~80% of CZR's current enterprise value. We also see Caesar's Digital inflecting from breakeven to significant profitability in the next 12 months. If management achieves its $500 million EBITDA guidance for this division, this business could be worth close to Caesar's entire current market capitalization. Digital's profitability should improve in both its Online Sports Betting and iGaming operations. Profitability in the OSB business will be aided by fewer new launches, an improved online sports betting "hold," and the costs associated with an expensive partnership deal rolling off. In iGaming, profitability will be aided by higher handle growth rates, the launch of a second iGaming app, a new CRM software implementation, and better leveraging of the company's loyalty programs. Given that investors have significant skepticism towards management's $500 million EBITDA target, and have accorded little if any value to the Caesars Digital business, any progress in moving towards this profitability goal should be a major catalyst to the shares. Our channel checks point to the Digital business performing extremely well relative to investors' expectations. We believe the shares of Caesars have an arsenal of additional catalysts. In 2H 2024 and onwards, FCF should inflect meaningfully positively, aided by a ~$300 million reduction in capex associated with the completion of Virginia and New Orleans casino projects. The capex savings are expected to be deployed for deleveraging and share buybacks, which were recently announced. Disposal of non-core assets serves as another means to reduce leverage. The company will also be a major beneficiary of expected Fed rate cuts. We estimate ~$61 million in interest savings per 100 bps in rate cuts, with the further opportunity to refinance other debt at lower costs. Following weak Q1-FY24 results due to a convergence of unusual factors, we were able to buy CZR shares while they were depressed despite all of these upcoming catalysts. The fundamentals stabilized in Q2 and we expect Caesars Digital to begin outperforming expectations in the back half of this year.

BSD Analysis:
Buckley Capital's thesis on Caesars Entertainment centers on a significant valuation disconnect between the company's high-quality assets and its current trading multiple. At 5-6x 2025 FCF versus historical Las Vegas asset multiples of 18x, the manager sees substantial upside potential of 50-100% over 12-24 months. The key catalyst is Caesars Digital inflecting to $500 million EBITDA, which alone could justify the current market cap. Management's track record under CEO Tom Reeg, who successfully integrated the Eldorado-Caesars merger, provides execution confidence. Multiple catalysts should drive re-rating including $300 million capex reduction post-project completion, aggressive deleveraging and buybacks, and Fed rate cuts providing $61 million interest savings per 100bps. The sum-of-parts value is compelling with irreplaceable Las Vegas real estate trading at 15-20x EBITDA covering 80% of enterprise value, while the digital business trades at minimal valuation despite strong fundamentals and channel check data.

Pitch Summary:
Chemours is an investment we have owned since 2018, very profitably until this year. It is composed of 3 different businesses–TSS, APM, and TT–that are each the #1 or #2 players in their respective categories. The company's Thermal & Specialized Solutions division (TSS) sells environmentally friendly refrigerants on a global basis, with the primary refrigerants being Opteon and Freon. Opteon is more environmentally friendly, therefore Freon is being slowly phased out by government mandate. This is very beneficial for Chemours since Opteon is very high-margin and has little competition, whereas Freon has more competitors and overall lower margins. This should lead to high single-digit growth in the TSS segment, with 30%+ EBITDA margins. We believe it is possible TSS margins could get to 40%, given that they have neared that number in the past and that as Chemours sells more Opteon, its margins should trend higher. This means TSS should be able to earn around $800m in EBITDA in the next 2 years. The Advanced Performance Materials segment (APM) is Chemours' second business line, and sells a wide variety of products to many different end markets–autos, semis, etc.–the most well-known of which is Teflon. We believe APM can earn around $300m in mid-cycle EBITDA by 2026 as the industrial slowdown abates, assuming $1.5bn in revenue at a 20% EBITDA margin. TSS and APM are the two higher-quality, less commodity-sensitive businesses. The third business, Titanium Technologies (TT), sells TiO2 (titanium dioxide) which goes into paint on a global basis. While global paint revenue grows roughly at global GDP, the TT business is relatively volatile, as companies such as Sherwin-Williams that buy paint will often go through inventory destocking cycles. Given that paint was in very high demand in 2021, there has been a multi-year downcycle given low housing starts with higher interest rates, which we believe is about to rebound as the Fed cuts rates. We believe that by 2026, TT could earn $500-$700m in EBITDA as they get back to normalized levels in the business. That would put overall Chemours at roughly $1.6bn in gross EBITDA, less $250m of corporate cost, or $1.35bn of EBITDA on a consolidated basis. From a valuation standpoint, the TT business is the lowest-quality segment. Tronox, a pure play TiO2 business, has historically traded around 7.5x EBITDA, which we think is fair. TSS is the crown jewel of the business, given its high single-digit secular growth combined with 30%+ EBITDA margins. TSS should trade at 10-13x EBITDA. APM fits somewhere in between and should likely be valued at 9-11x EBITDA. This leads to the TT business being worth $4.1bn, the TSS business being worth $9.2bn, and the APM business being worth $3bn. Corporate costs run at about $250m, which capitalized at 9x would subtract $2.25bn, and litigation liabilities and debt subtract another roughly $4.5bn. This gets us to $63.60/share, or ~250% upside from today's levels, in two years. Another way of looking at Chemours: Take $1.35bn in EBITDA, then subtract $300m of maintenance capex and $230m of interest expense to equal $820m of pretax profit. At a 25% tax rate that leads to $4.10 in FCF/share. At 10x FCF that is 120% upside, and at 15x FCF that is 230% upside. In the event the market does not automatically award the multiples we think these businesses deserve, we note there has been increased pressure on the management team to spin off the TT business given that its more cyclical earnings bring down the overall valuation multiple of the company. So while Chemours has traded well below its intrinsic value for the last 12 months, we believe as its businesses normalize there is material upside from here that should be able to be realized over the next few years as its various segments grow significantly off their cyclical lows. Our average cost in Chemours is around $22/share, so we are down a little over 15% on the position. Nothing catastrophic, but still one of the largest detractors from our performance in 2024. We think this will right itself and Chemours will return to being a significant winner in the coming years. At 4.5x normalized 2026 FCF, we think Chemours is highly compelling here given that its peers trade at mid to high-teens FCF multiples.

BSD Analysis:
Buckley Capital presents a compelling sum-of-the-parts analysis for Chemours, highlighting the company's transformation from commodity chemicals to higher-margin specialty products. The manager's thesis centers on the secular shift from Freon to Opteon refrigerants driven by environmental regulations, which should drive TSS margins to 30-40% with high single-digit growth. The valuation methodology applying different multiples to each segment (10-13x for TSS, 9-11x for APM, 7.5x for TT) appears reasonable given their quality differences. The $63.60 target price implies 250% upside, supported by normalized 2026 EBITDA of $1.35bn and FCF of $4.10/share. Key catalysts include Fed rate cuts benefiting the cyclical TT paint business, potential spin-off of the lower-quality TT segment, and margin expansion in the crown jewel TSS division. At 4.5x normalized FCF versus peers trading at mid-to-high teens multiples, the valuation appears compelling despite recent underperformance.

Pitch Summary:
Alphamin is still among our highest conviction positions, and there is little to dislike about the company. Management has brought on two mines on budget and on time; the asset is the highest-grade tin mine in the world, and despite a problematic operating environment, operations seem to run as smoothly as anyone could hope for from a mine anywhere, let alone in the Democratic Republic of Congo. Management also increased the semi-annual dividend earlier this month from 0.03 CAD to 0.06 CAD at the current price, resulting in a 10% dividend yield on a forward-looking basis. During the third quarter, we have partial information on performance from an interim release; the company produced 22% more tin than in the second quarter, sold 71% more tin, and booked an EBITDA of $91.5 million vs. $54 million. Third quarter EBITDA will be about 65% to 70% higher than any previous quarter, the third quarter's result being the first full quarter with the increased production from the Mpama South expansion of the mine. The only black mark against Alphamin is their location in the Democratic Republic of Congo. Our position on the country is far from consensus; we think it is a wonderful jurisdiction. The DRC certainly has its challenges, but not ones the right management team cannot overcome. Most importantly, every asset in the DRC that gets turned into a mine is a tier-one asset. The geological endowment of the country is second to none, and while the security risk is not to be taken lightly, and it is not easy to do business, the prizes appear well worth the risk for those willing to look more deeply. We, of course, are not the private owners of mining operations that can happily sit back and collect free cash flow as dividends, so we must tussle with the uninformed judgments of the market in calculating our future returns. AFM has maintained a double-digit return on invested capital for three straight years and will make it a fourth when FY2024 ends. They have maintained a double-digit net income margin, save for the period 2Q2023 to 1Q2024, when the firm was building the Mpama South mine extension, and have generally maintained a double-digit free cash flow yield since original operations spun up in 2020. Despite all of this, the company currently trades at, by our estimate, between 2.2x and 2.5x times 2024 sales and a 2024 EV/EBITDA of around 4.2x to 4.5x. It is cheap and unloved, and we have not even touched upon the wonderful commodity backdrop it has got in the form of a tin market that has long been forgotten yet is more critical today than ever as the glue that keeps everything electronic together. With all these good things happening, it is still far from clear the market will ever properly acknowledge the spectacular job management has done with this company. We are up nearly 200% in the position since our first purchase in 2021, but we think there is another ~150% gain before the stock reaches fair value. Call us if you know anyone with $1.5 billion in cash lying about. We know the asset we would buy. Barring that, we hope to try and shine a light over the upcoming 12 months on some of the great opportunities currently on offer for the intrepid investor willing to venture forth into Africa and maybe, with some luck, dispel the broader market narrative of what appears to us to be an inappropriate fear of African assets.

BSD Analysis:
Massif Capital maintains high conviction in Alphamin, operating the world's highest-grade tin mine in the Democratic Republic of Congo, with management executing flawlessly on expansion plans. The company delivered exceptional Q3 results with 22% higher tin production, 71% more sales, and EBITDA jumping to $91.5 million from $54 million, representing the first full quarter benefiting from the Mpama South expansion. Financial metrics remain robust with double-digit ROIC for three consecutive years, double-digit net margins, and a newly doubled dividend yielding 10% forward. Despite these strong fundamentals, the stock trades at attractive valuations of 2.2-2.5x sales and 4.2-4.5x EV/EBITDA, reflecting market skepticism about DRC operations. The manager views this jurisdiction fear as misplaced, emphasizing the country's tier-one geological endowment and the critical nature of tin in electronics. With tin markets structurally undersupplied and increasingly important for technology applications, Alphamin appears positioned to benefit from both operational excellence and commodity tailwinds. The manager sees ~150% additional upside potential from current levels.

Pitch Summary:
Siemens Energy (ENR) has had a great run from last year's lows. The stock bottomed out on 10/26/2023 at €6.87 and is now trading at €36.48, a 431% return. Our position, the largest in the portfolio at 11.5%, was built with an average entry price of €11.06, yielding a total return of 229%. The sell-side is starting to take notice, and the firm's average 12-month sell-side price is now €33 across 21 analysts, up from the 12-month price target in December 2023 of €14.58. It's a day late and a dollar short, in our opinion. Unfortunately, the easy part of the investment is now behind us. Holding a position while management is executing and the market is positively repricing is easy. Selling decisions, on the other hand, are complex. Our life is made easier in this regard as the stock price of ENR is now in line with our valuation, assuming a return to positive EBITDA of the firm's troubled Wind Turbine business, an event that has yet to happen and one we don't expect to come to pass until 2026. At the same time, the rise in the stock price does call for a reassessment of our price target as it is based on a sum of parts multiples analysis that utilizes multiples, and multiples have an embedded market sentiment variable. Did we read the market sentiment around the business incorrectly and apply an EBITDA multiple that was too low? It is difficult to say, if GE Vernova (GEV), the closest comparable, is priced correctly, then we certainly did. GEV trades at an EBITDA multiple of 23.4x vs. ENR's current EBITDA multiple of 9.6x. At the same time, our review of both companies suggests significant differences. For starters, GEV is a clean story with significantly lower net customer advances, lower provisions, and no obligation to buy a stake in an Indian business at a high multiple in the future. GEV also, and in our opinion most importantly, has a higher share of revenues coming from Service (~45% in 2023) vs. ENR (~36%). Investors in the US are also very bullish on US electricity demand, driven not only by AI but also by crypto mining, onshoring of manufacturing (semi, solar, and battery production will be very energy-intensive), and general electrification. GEV's US exposure is ~2x that of ENR. Finally, ENR has significantly lower cash generation in the next couple of years, so there is no real prospect of dividends or share buybacks in the future, at least not prudent dividends or buybacks. Can ENR address any of these issues to justify closing the multiple gap? Perhaps, but it will be difficult, and we are not optimistic in the near term. ENR can never be a clean story as it has a messy history, so investors will always need to tussle with that reality. Furthermore, ENR has commitments to buy back a stake in its Indian business from Siemens and has a 20% shareholder (Siemens) that is intent on selling down its position. Both events will continue to weigh on the stock until they are resolved, which will take a few years. Furthermore, there is very little ENR can do about the bullish US electricity demand narrative. It is a moment in time that is boosting the appeal of GEV to US investors looking for a way to play an in-vogue theme. GEV is getting a pricing bump due to the narrative, even if it has not yet translated into a fundamental basis for a valuation bump. The positive sentiment component of the theme will disappear far sooner than ENR can expand its operations in the US. ENR can work to grow market share in the US electricity system, and they are, as we discussed in our 2nd quarter letter, but that will take far longer than the sentiment will hold. The revenue mix is an interesting lever that the company could try to pull in the long term to increase the perceived value of earnings, but that will be a lengthy process. We suspect the multiple premium on GEV will dissipate far sooner than ENR will be able to increase service revenue by 10%. Services revenue in the Wind Turbine segment (the most obvious place for growth in service revenue) is also becoming highly competitive. Not only are turbine manufacturers becoming highly proficient at servicing the turbines of other manufacturers (Siemens Gamesa services over 12 gigawatts of third-party turbines, which represents 15% of its total onshore wind portfolio under service; Vestas services 9GW of other OEM turbines), but project developers are also taking more nuanced approaches to servicing. Developers looking to be asset owners are increasingly building in-house capabilities to lower maintenance costs. Italian wind giant Enel, for example, has an average servicing contract of just 3.5 years across its wind asset portfolio, after which it takes the responsibility in-house. On the other hand, developers looking to sell assets, such as Swedish developer OX2, have signed servicing contracts that average 31 years, which they hope will bring certainty to the future cost of owning assets and, thus, a clearer picture of the business case as the attempt to sell the assets to institutional investors. It seems unlikely that we will see a step change in servicing revenue from wind turbines. Incremental improvements, for sure, a massive bump that changes the company's overall revenue mix, unlikely. The Gas Turbine business is the other major source of servicing revenue. With an installed base of 7,800 turbines, Siemens turbine servicing business accounts for 60% of the Gas Turbine business revenue. Management believes it has the potential to deliver low-to-mid single-digit servicing revenue CAGR through 2026. Still, this growth rate does not drive the revenue mix at the business much closer to the GEV revenue mix. Service contracts on new gas turbines sold in 2023, for example, only add €130 million in new revenue to the top line, a bump of only 0.4%. It seems far more likely that GEV will get repriced lower on a lower multiple before ENR justifies trading at the 23.4x EV/EBITDA multiple that GEV trades at. While we find it unlikely that ENR will either get a ratings bump to the levels of GEV or that GEV will be able to maintain its high multiple for the next few years, an improving operating environment in Europe could produce a less significant multiple bump for ENR. While the European economy is weak, demand for ENR's services remains robust, backed by considerable government policy and spending. That positive operating environment appears likely to strengthen further if former ECB President and Italian PM Mario Draghi's recent report on how to promote private investment and boost Europe's competitiveness and productivity is executed, as seems likely. At the plan's heart is the observation that the power bills of large European manufacturing facilities are more than twice those faced by US equivalents. For a typical car factory in Germany, this results in incremental electricity costs of €0.5 billion per annum; for a large chemical plant, the annual cost disadvantage is as much as €1 billion per annum. Given this constraint on competitiveness, about half of the incremental investments suggested by the plan (€450 bn of €800 bn pa) are for clean energy and electric mobility. Specifically, the plan urges the creation of a liquid corporate PPA market to sell electricity at a fixed price from renewable energy directly to industrial customers. This would, hopefully, lower the costs and the volatility of energy procurement for these users. At the same time, the plan calls for the modernization of power grids, boosting the already robust investment (at least compared to the US) that Europe is making in modernizing its grid. If this plan is implemented, as seems likely, it could be a further boost to ENR's already industry-leading grid business. We will continue to watch the situation and evaluate its potential impact on our valuation for ENR. At the same time, it seems prudent to start taking some gains on ENR to avoid repeating past mistakes resulting from an incorrect belief that momentum was on our side. While ENR took the elevator up rather than the steps, we are not interested in running the risk of the stock-taking the same elevator down, as stocks often do.

BSD Analysis:
Massif Capital presents a nuanced view on Siemens Energy after a spectacular 431% run from 2023 lows, with their position generating a 229% return from an average entry of €11.06. The manager acknowledges the stock has reached fair value based on their sum-of-parts analysis, assuming the troubled Wind Turbine business returns to positive EBITDA by 2026. A key concern is the valuation gap versus comparable GE Vernova, which trades at 23.4x EBITDA compared to ENR's 9.6x multiple, driven by GEV's cleaner story, higher service revenue mix (45% vs 36%), and greater US exposure benefiting from AI-driven electricity demand. The manager identifies structural headwinds including ENR's messy history, commitments to buy back Indian operations, and a 20% shareholder (Siemens) looking to sell down. While acknowledging potential European policy tailwinds from the Draghi competitiveness plan focusing on clean energy infrastructure, the manager expresses skepticism about ENR's ability to meaningfully increase its service revenue mix given competitive pressures in wind turbine servicing. The stance reflects prudent profit-taking after substantial gains rather than fundamental deterioration.

Pitch Summary:
JAP is a leading pan-Asian, industrial agri-food company that has an integrated network of modern farming, processing and distribution facilities in Indonesia, Vietnam, India, Myanmar and Bangladesh. They specialise in producing protein staples (poultry, swine, aquaculture, and beef) and packaged food. JAP SP holds leadership positions in Indonesia (#2, 21% Poultry Feed Production, 25% DOC Production), #1 Myanmar (31% Poultry Feed Production, #2 Doc Production 22%) and #2 in Vietnam with DOC production of 20% During 2022-2023 the company was challenged with high costs of production leading to their operating margins declining from 8-9% to 2-3% leading to losses in 2023. However starting in 1Q24 these costs began declining thereby allowing margins to recover and profitability as well, this is further helped by generally higher poultry prices in Indonesia and Vietnam. Today earnings are trending from a loss of $30 mn in 2023, to a potential profit of $100 mn in 2024, going forward quarterly profit may return to $80-100 mn. Currently, the shares are trading at 6x PE 24 and an estimated 3x PE 25. We began building a position in 2Q24 to 4.5% of the Fund.

BSD Analysis:
The manager identified Japfa as a compelling turnaround story in the Asian agri-food sector, with the company emerging from a challenging 2022-2023 period. The investment thesis centers on margin recovery as production costs decline and poultry prices improve across key markets. Japfa's dominant market positions provide competitive advantages, ranking #2 in Indonesia with 21% poultry feed production share, #1 in Myanmar with 31% market share, and #2 in Vietnam with 20% DOC production. The dramatic earnings inflection from a $30 million loss in 2023 to potential $100 million profit in 2024 represents a significant fundamental improvement. The valuation appears attractive at 6x 2024 PE and an estimated 3x 2025 PE, suggesting the market hasn't fully recognized the earnings recovery. The manager's gradual position building to 4.5% of the fund demonstrates conviction while managing risk. The integrated pan-Asian platform positions Japfa to benefit from rising protein consumption across emerging markets.

Pitch Summary:
A second oil & gas service provider listed on the SGX that we highlighted in May 2024, BKM SP, initially a 2.5% weighting, increased +76% from our cost price to ~SGD 0.25/share which we estimated to be a fair value for the next 18-24 months, we fully exited the position.

BSD Analysis:
The manager achieved another strong performance in the oil & gas services sector with Beng Kuang Marine, generating a 76% return from the initial investment. The position was sized at 2.5% of the fund, demonstrating appropriate risk management for a smaller market cap opportunity. The manager's fair value estimate of SGD 0.25 per share provided a clear exit target, which was reached during the quarter. The 18-24 month time horizon for this valuation suggests the manager had a medium-term investment thesis that was realized ahead of schedule. This successful exit, combined with the DMHL position, contributed significantly to the fund's outperformance during Q3. The timing of both oil & gas service provider exits suggests the manager capitalized on sector momentum and rotated profits into new opportunities. The disciplined approach to taking profits at fair value demonstrates strong portfolio management execution.

Pitch Summary:
We first wrote about DHML in May 2024, on September 2024, Hanwha Group announced a tender offer for the shares of DMHL at SGD$0.60/share, initially a 3% holding of the Fund. Hanwha Aerospace and Hanwha Ocean intend to secure management control through the offer, having already invested KRW 116 billion ($86.9 billion) this May to secure a 25.4% stake in the company. We estimate that DMHL is worth +20-30% above the acquisition price over the coming years, given the availability of other opportunities in the region we fully exited this position with a total return of +97% for a 6-month holding period.

BSD Analysis:
The manager executed a highly successful investment in Dyna-Mac Holdings, achieving a 97% return over just six months. The investment thesis was validated when Hanwha Group announced a tender offer at SGD 0.60 per share, representing significant value recognition by a strategic acquirer. Hanwha's substantial KRW 116 billion investment to secure a 25.4% stake demonstrates strong conviction in the company's prospects. The manager's valuation suggests DMHL could be worth 20-30% above the acquisition price, indicating the tender offer may undervalue the company's long-term potential. Despite this upside potential, the manager chose to exit and redeploy capital into other regional opportunities, demonstrating disciplined portfolio management. The quick realization of gains reflects the manager's ability to identify undervalued assets in the oil & gas services sector. This successful exit contributed meaningfully to the fund's strong Q3 performance of 9.6%.

Pitch Summary:
Overstated premium dealers (claimed 20 vs. actual 12); stagnant Google search and Amazon sales trends; increased competition; insider cashouts;

BSD Analysis:
Byrna Technologies sells non-lethal launchers and security products. Bears highlight niche TAM, low recurring revenue, and reliance on fads/politics. Gross margins thin given manufacturing and distribution costs. Competitive barriers are low, profitability inconsistent, and equity raises recurring. Catalysts: new product adoption, cartridge recurring sales, law enforcement contracts. Counterpoints: security demand could rise, but economics are structurally weak.

Pitch Summary:
Lululemon Athletica presents a compelling investment opportunity due to its consistent top-line growth, effective management, and strategic expansion into men's and international markets. Despite recent stock price declines, the company maintains strong profitability and brand loyalty, supported by a robust cash position and attractive valuation metrics. The current market conditions offer a favorable entry point for investors seeking exposure to a high-growth, premium brand in the athletic apparel industry.

BSD Analysis:
Lululemon's financial health is underscored by its impressive cash reserves and free cash flow generation, which provide the flexibility to pursue growth initiatives and shareholder returns. The company's P/E ratio of 23.52 is attractive compared to its historical median and industry peers, suggesting undervaluation given its growth prospects. Lululemon's strategic focus on expanding its men's line and international presence, particularly in China, aligns with global athleisure market trends projected to grow at a CAGR of 8.9% through 2029. However, investors should remain vigilant of potential risks, including slowing growth in mature markets, product innovation challenges, and geopolitical tensions affecting its expansion strategy in China. Overall, Lululemon's strong fundamentals and strategic initiatives position it well for future growth, making it an appealing investment in the current market environment.