Q3 2025 Letter to Our Partners

Dear Partners,

Time for our Q3 2025 quarterly update on the concentrated portfolio of 9 high-quality companies. During the quarter, our compounding portfolio demonstrated the resilience and compounding characteristics we seek in our investment approach, with strong performance across several key positions.

Key Highlights:

• Portfolio maintains full allocation across 9 carefully selected positions

• We added GRAB to our portfolio and sold ASTS Spacemobile

• FICO surprised us to the upside with a +20% move this week

• Ferrari catalysts in October we are excited about

Our investment philosophy continues to focus on companies with sustainable competitive advantages, strong management teams, and high reinvestment rates. This quarter reinforced our conviction in maintaining a concentrated approach with companies that align with secular growth trends.

Portfolio Performance Overview

The portfolio's construction reflects our focus on quality businesses trading at reasonable valuations with long-term compounding potential. Our community has helped many partners stay grounded and disciplined during the massive volatility we experienced. Many partners have used the local bottoms to add to the FICO position, and it has turned out a great move. Also Arista Networks and Grab Holdings turned out to be solid compounders that get better and better each quarter. Our fund structure stays unchanged:

We studied the top 50 fund managers in the world, and learned that as a fund manager you have 3 levers. To beat the market over decades, you have to max out two of them. But if you max out 3 of them, volatility will shake you out in a downturn.

Staying true to these principles, 60% of our portfolio is in just 3 companies. That is a serious degree of concentration. Let’s review their performance and our plan for the next months.

Compounding Portfolio

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