Performance Summary - The portfolio achieved a return of 5.7% in the second half of 2025, resulting in a total return of +10.2% for the calendar year and +76% since inception in Canadian dollars net of fees [2][3] - Realized gains since inception are reported at +71.4%, with unrealized gains at 4.6% as of December 31, 2025 [3][35] - The portfolio's exposure by strategy bucket shows a significant concentration in Special Situations Equity at 35.9% for FY 2025, while Core Value Equity stands at 47% [4] Geopolitical Landscape - The investment landscape is undergoing dramatic shifts due to geopolitical changes, impacting competitive intensity and market size [7][8] - The corporate strategy of relying on low-cost supply chains is being challenged, leading to downward pressure on returns on capital [8] - Despite these changes, the opportunity set for fundamental value investors is not shrinking, but rather evolving [9][11] Portfolio Changes - In the second half of 2025, the company sold positions in Protector, Ryanair, and Alimak, marking the exit from all initial positions since inception [13] - The average return across the initial investments was 2.0x money with a 16% IRR, with no losses recorded on any investment [14] - The portfolio is now more concentrated, with the three largest positions comprising 37% of capital and the five largest making up 57% [19] Investment Cases for Major Holdings - **Burford Capital**: The company has seen an increase in book value per share and cash proceeds from litigation, with a fair value estimate of approximately 3x the current price [24][26] - **Borr Drilling**: The fundamentals have improved, with run-rate EBITDA increasing from $100 million to $500 million, and a fair value estimate of about 3x the current price [25][30] - **GetBusy PLC**: The management's ability to extract value from its US asset is crucial, with a fair value estimate of 2-4x the current price [27][30] - **Fever-Tree Drinks PLC**: The joint venture with Molson Coors is expected to accelerate commercialization, with a focus on recovering margins [28][30] - **Bolloré and Compagnie de L'Odet**: The simplification of the holding structure is ongoing, with potential for significant value creation over time [29][31] Business Update - The company has onboarded new investors aligned with its values and is utilizing AI to enhance business operations and insights [32]

Group 1: Company Performance - monday.com reported revenues of $299 million last quarter, exceeding analysts' expectations by 1.8% and showing a year-on-year growth of 26.6% [1] - The company added 258 enterprise customers paying more than $50,000 annually, bringing the total to 3,702 [1] - Analysts expect monday.com's revenue to grow 24.4% year on year to $312.4 million this quarter, with adjusted earnings projected at $0.88 per share [2] Group 2: Analyst Expectations - Analysts have generally reconfirmed their estimates over the last 30 days, indicating confidence in the company's performance heading into earnings [3] - monday.com has a history of exceeding Wall Street's expectations, beating revenue estimates by an average of 2.3% over the past two years [3] Group 3: Industry Context - Peers in the productivity software segment, such as Atlassian and Pegasystems, reported year-on-year revenue growth of 20.6% and 17.3% respectively, both beating analysts' expectations [4] - Investors in the productivity software segment have maintained steady positions, with monday.com shares up 2.2% over the last month, while the average analyst price target is $266.33 compared to the current share price of $189.15 [5]

Core Insights - The productivity software sector has seen increased demand due to rising employee costs and the shift to remote work, driving the need for tools that enhance corporate productivity [1] - The 17 tracked productivity software stocks reported a strong Q2, with revenues exceeding analysts' expectations by 2.9% and an average share price increase of 5.6% since the earnings results [2] monday.com Performance - monday.com reported revenues of $299 million for Q2, reflecting a year-on-year increase of 26.6% and surpassing analysts' expectations by 1.8% [4] - The company demonstrated strong performance with significant beats in both EBITDA and annual recurring revenue estimates, indicating effective growth strategies [4] - Despite the positive earnings report, monday.com's stock has declined by 26.6% since the announcement, currently trading at $182 [5] Pegasystems Performance - Pegasystems achieved revenues of $381.4 million in Q2, marking a 17.3% year-on-year increase and outperforming analysts' expectations by 8.5% [7] - The company had a notable quarter with substantial beats in both billings and EBITDA estimates, leading to a 3.9% increase in stock price since reporting, currently trading at $59.30 [8]

Core Insights - The productivity business is currently out of favor with investors in 2025, leading to a decline in share prices [1] - Share prices are near the lows of the year, prompting investor inquiries into the underlying causes [1] Summary by Category - **Market Sentiment** - Investors are showing a lack of confidence in the productivity sector, reflected in the declining stock prices [1] - **Stock Performance** - As of September 2, 2025, stock prices are at their lowest levels for the year, indicating a significant downturn in market performance [1]