Rowan Street Capital, an investment management company, released its Q4 2025 investor letter. A copy of the letter can be downloaded here. Rowan Street generated solid results in 2025 but underperformed the S&P 500 Index. The Composite returned +11.1% (net) in 2025 compared to +17.9% for the Index. Rowan Street delivered a cumulative net return of +252% over the past three years, compared to +78% for the Index during the same period. It is a concentrated strategy with a focus on long-term compounding. 2025 ...

Core Insights - The rise of LLM-powered AI assistants is transforming the online shopping experience, with their effectiveness increasingly reliant on rich, intent-driven, and contextual commerce data rather than just natural language processing capabilities [1][8] Consumer Expectations - 72% of consumers expect AI shopping assistants to aid in online shopping, with this expectation exceeding 80% among those under 45 [1] - Among consumers who anticipate AI assistance, 48% are open to using an AI shopping assistant from their favorite retailer, increasing to 62% for those aged 25-34 [2] Transparency and Control - Retailers must ensure transparency regarding data usage and empower shoppers in their purchasing decisions, as 24% of consumers would stop using AI due to data handling concerns, and 21% would discontinue use if they felt AI was making decisions without their input [3] Trust and Adoption - 34% of consumers have tried shopping with a conversational AI assistant, with this figure rising to 59% among 25-34 year olds, indicating a higher acceptance among younger consumers [4] - 77% of early adopters trust brands more if they utilize an AI shopping assistant [5] Interaction Preferences - 46% of early adopters prefer accessing AI assistants through a website's search bar, while 41% favor a dedicated on-site chatbot, suggesting that AI interactions should be integrated into existing search functionalities [6] Impact of Poor Experience - 69% of early adopters who received irrelevant product suggestions abandoned their search for alternatives, highlighting the importance of relevant product discovery [7] Personalization Importance - Personalization is crucial, with consumers valuing features such as deal alerts (59%), personalized recommendations (51%), and gift inspiration (44%) [8] Areas for Improvement - 33% of early adopters believe AI can significantly enhance decision-making, while 25% see potential in product discovery [9][16] Readiness Gap - There exists a readiness gap between consumer demand for AI in shopping and the actual investment by retailers, with only 36% of surveyed retailers allocating dedicated budgets for AI tools [13][14]

Core Insights - Rezolve Ai positions itself as a leader in the emerging agentic commerce market, which is projected to reach between $1 trillion and $5 trillion in annual global transaction value by 2030, driven by the rapid adoption of AI-driven shopping agents [2][8] Group 1: Industry Developments - The emergence of agentic commerce standards is occurring faster than previously anticipated, validating Rezolve Ai's early architectural decisions [2] - Recent research indicates that the adoption of AI shopping agents is accelerating significantly, with consumers increasingly engaging with agent-based shopping assistants [2][8] - Standardization in the industry will enable AI-driven transactions across various sectors, including retail, fashion, FMCG, and hospitality [2] Group 2: Technology and Infrastructure - Rezolve Ai's Agentic Checkout is designed to operate across protocol-based AI environments, ensuring security and consistency in transactions [3][4] - The company emphasizes the importance of shared standards for the mass adoption of digital commerce, akin to early web and payment protocols [3][4] - The integration of payment and identity infrastructure is crucial for scaling agentic commerce, creating a trust framework for autonomous purchasing [6] Group 3: Strategic Positioning - Rezolve Ai's technology enables a broad ecosystem of AI agents to initiate commerce actions in a controlled and auditable manner, preserving brand integrity and compliance [5] - The company aims to be the transaction layer for conversational commerce, providing flexibility for brands to engage consumers across various platforms [7] - Continued adoption of agentic commerce protocols is expected to create new opportunities for brands as AI agents become integral to purchasing decisions [8]

Core Insights - The emergence of AI-based product substitution tools is driven by the explosive growth of visual content demand in the e-commerce industry, transitioning from traditional manual editing to automated solutions [1][2] - These tools utilize advanced technologies such as semantic segmentation, Generative Adversarial Networks (GAN), and image synthesis to achieve seamless element replacement while maintaining image quality [1][2] - The ongoing iteration of AI technology is expected to further enhance the accuracy and naturalness of product substitution, providing more efficient visual solutions for the e-commerce sector [2] Group 1: Technology and Functionality - AI product substitution tools can automatically identify and replace specific elements in product images, significantly improving processing efficiency [1][4] - Keevx's intelligent product substitution system employs a multi-stage neural network architecture for pixel-level precision while preserving original image quality, optimized for cross-border e-commerce [1] - Mokker AI focuses on background replacement with a vast scene library and intelligent light-matching algorithms, catering to small and medium-sized businesses [2] Group 2: Market Impact and Efficiency - The implementation of intelligent product substitution systems can enhance material production efficiency by 45% [4] - The use of knowledge graph technology in SeeAny AI's engine allows for automatic recommendations of suitable replacement elements, reducing user operational barriers [2] - The transition to AI-driven visual content production addresses the high costs and long cycles associated with traditional product image creation [2]

Summary of Pattern Group FY Conference Call (January 14, 2026) Company Overview - **Company Name**: Pattern Group (NasdaqGS: PTRN) - **Business Model**: Pattern operates in the digital e-commerce space, connecting brands with consumers through various online marketplaces. The company does not engage in brick-and-mortar sales, focusing instead on platforms like Amazon, Walmart, Tmall, and others. [3][4] Core Technology and Operations - **Technology Stack**: Pattern utilizes a sophisticated tech platform that employs machine learning and natural language processing to optimize brand revenue. The company holds 29 patents related to its technology. [5][6] - **Keyword Optimization**: The company analyzes keyword performance to enhance product visibility and sales, making millions of bid changes daily across platforms. [9][10] - **Data Utilization**: Pattern collects 120 billion data points weekly, leveraging this data to inform marketing strategies and product placements. [22] Industry Insights - **E-commerce Trends**: The company anticipates that by 2030, 10%-30% of shopping will originate from large language models (LLMs). Currently, 27% of searches involve product-related queries. [16][18] - **Agentic Shopping**: The rise of agentic shopping, where consumers can execute purchases through AI assistants, is seen as a significant trend that could reshape e-commerce. [17][21] Financial Performance - **Revenue Growth**: Pattern reported a total revenue of approximately $2.3 billion, with a notable increase in net revenue retention (NRR) from 115% in Q1 2025 to 122% in the last quarter. [28][31] - **Cost Efficiency**: The company has reduced its cost to serve by three percentage points since 2022, indicating improved operational efficiency. [38] Market Position and Competition - **Competitors**: Pattern does not face direct competition from traditional tech platforms that prefer a SaaS model. Instead, it competes with logistics-focused companies that may lack technological capabilities. [41][42] - **Amazon Dependency**: Over 90% of Pattern's revenue comes from Amazon, but the company has contracts that allow for cost adjustments in response to changes in Amazon's fee structure, mitigating risk. [52][53] Consumer Behavior and Market Trends - **Holiday Season Performance**: The company observed a 7%-8% increase in e-commerce during the holiday season, indicating healthy consumer spending. [28] - **Growth in New Marketplaces**: Pattern has seen significant growth in TikTok (391%) and Coupang in South Korea, highlighting the potential of emerging platforms. [55] Inventory Management - **Inventory Strategy**: Pattern views inventory as an asset, having improved its days of inventory on hand from over 100 to the low 70s, enhancing cash flow management. [63][65] Future Outlook - **Margin Expansion**: The company aims for a long-term margin target of 10%, driven by operational efficiencies and new monetization models. [70][71] - **Technological Advancements**: Future tech developments include agentic workflows that enhance data-driven decision-making and operational efficiency. [66][68] Conclusion - Pattern Group is positioned as a leader in the digital e-commerce space, leveraging advanced technology and data analytics to optimize brand performance across multiple marketplaces. The company is focused on expanding its market presence while managing risks associated with dependency on Amazon and the health and wellness sector.

Core Viewpoint - TCW Concentrated Large Cap Growth Fund reported a +4.11% return in Q3 2025, underperforming the Russell 1000 Growth Index which returned +10.51% due to optimism around AI investments and positive corporate earnings [1]. Group 1: Fund Performance - The fund's performance in Q3 2025 was +4.11%, compared to +10.51% for the Russell 1000 Growth Index [1]. - The fund's top five holdings were highlighted, indicating its best investment picks for 2025 [1]. Group 2: Shopify Inc. Overview - Shopify Inc. (NASDAQ:SHOP) reported a one-month return of 6.34% and a 52-week gain of 53.79%, closing at $169.45 per share with a market capitalization of $220.597 billion on December 24, 2025 [2]. - Shopify's revenue and Gross Merchandise Value (GMV) grew by 31% year-over-year, with international GMV increasing by 42% and GMV in Europe by 49% year-over-year [3]. Group 3: Market Position and Hedge Fund Interest - Shopify Inc. was held by 91 hedge fund portfolios at the end of Q3 2025, an increase from 69 in the previous quarter [4]. - Despite acknowledging Shopify's potential, the company believes certain AI stocks may offer greater upside potential and less downside risk [4].

Group 1: Polen International Growth Strategy Performance - The Polen International Growth Strategy returned -4.23% gross and -4.53% net of fees in Q3 2025, underperforming the MSCI ACWI (ex-USA) which gained 6.89% [1] - The strategy's concentrated approach to quality investing did not match the index performance during the quarter [1] Group 2: Shopify Inc. Performance - Shopify Inc. (NASDAQ:SHOP) had a one-month return of -0.33% and a 52-week gain of 39.63%, closing at $158.41 per share with a market capitalization of $206.225 billion on December 08, 2025 [2] - Shopify was the top contributor to both relative and absolute performance in the Polen portfolio for Q3 2025, showcasing strong results with accelerating revenue and gross merchandise volume growth [3] - Shopify's revenue increased by 32% year-over-year in Q3 2025, with 91 hedge fund portfolios holding its stock at the end of the quarter, up from 69 in the previous quarter [4]

Core Insights - The Brown Capital Management International All-Company Fund experienced a loss of 4.46% in Q3 2025, underperforming the MSCI World ex-US Growth-Net Index, which returned 2.84% during the same period [1] - Year-to-date, the fund returned 6.67%, significantly lower than the index's 19.32% return, attributed to company-specific challenges and missing out on high-performing industries [1] Company Highlights - Shopify Inc. (NASDAQ:SHOP) is highlighted as a key stock in the fund's Q3 2025 investor letter, showcasing a one-month return of 1.38% and a substantial 39.72% increase over the last 52 weeks [2] - As of December 5, 2025, Shopify's stock closed at $161.08 per share, with a market capitalization of $209.701 billion [2] - Shopify provides a comprehensive suite of digital commerce solutions, enabling merchants to manage online stores efficiently through features like web design, inventory management, and payment processing [3] - The platform's continuous innovation and user-friendly tools create significant switching costs for merchants, fostering dependency on Shopify's ecosystem for business operations [3]

Core Insights - Worth Buying Technology held an AI progress sharing conference on November 26, showcasing its latest AI developments and the new "Haina" ACP (Agent Commercial Protocol) [1] - The company aims to enhance consumer service capabilities in the AI ecosystem and has partnered with Weimeng and Alipay to integrate AI payment capabilities [1][4] - The "Haina" platform focuses on creating a seamless transaction process in AI e-commerce, establishing a complete closed loop from capability supply to transaction matching [1][4] Group 1: AI Achievements - In November, the "Haina" MCP Server partner count exceeded 40, with an output volume surpassing 100 million [2] - The AI shopping assistant "Zhang Dama" saw an 8-fold increase in active users and a 24% increase in average retention rate [2] - The core product "What Worth Buying" experienced a 4-fold increase in AIGC reading time compared to the same period last year [2] Group 2: AIGC Integration - AIGC capabilities have evolved from simple content generation to decision empowerment, enhancing content production efficiency and user experience [3] Group 3: "Haina" ACP Development - The "Haina" ACP is designed as a foundational technology standard for "dialogue-based shopping," connecting AI capabilities with commercial value [4] - The collaboration with Weimeng and Alipay aims to create a collaborative transaction closed loop involving AI agents, users, merchants, and payment platforms [4][5] - The "Haina" ACP will first be implemented in the "Zhang Dama" app, facilitating a seamless process from dialogue to payment [5] Group 4: Future Strategy - Worth Buying Technology plans to continue its "comprehensive AI" strategy, exploring new AI+ consumption scenarios, models, and products [5] - The company aims to enhance the efficiency and quality of connections between supply and demand, contributing to a better consumer experience [5]

Core Insights - Worth Buying Technology's CTO Wang Yunfeng announced significant advancements in AI, including over 40 partners for the "Haina" MCP Server and an output volume exceeding 1 billion in November [1] - The AI shopping assistant "Zhang Dama" saw an 8-fold increase in active users and a 24% increase in average retention compared to the previous month [1] - The core product "What Worth Buying" experienced a 4-fold increase in AIGC reading time compared to the same period last year [1] Company Developments - In October, Worth Buying Technology formed a strategic partnership with Weimeng to integrate its consumer data service capabilities with Weimeng's SaaS commercial operating system, aiming to create an AI e-commerce transaction closed loop in China [1] - The company plans to further collaborate with Alipay to explore AI payment services, establishing a collaborative transaction closed loop involving AI agents, users, merchants, and payment platforms [1] Technology and Infrastructure - The ACP (Dialogue Commerce Protocol) is introduced as a foundational technology standard that connects AI capabilities with commercial value, expected to create new opportunities in the AI era [1] - The "Haina" ACP will first be implemented in the "Zhang Dama" App, facilitating a seamless process from dialogue to recommendation, ordering, and payment, thereby creating a verifiable sample of AI e-commerce [1]