Compounder Fund: Portfolio Update (November 2022) - 21 Nov 2022
Jeremy and I intend to share frequent but non-scheduled updates on how Compounder Fund’s portfolio looks like. The last time we shared an update on this was for Compounder Fund’s portfolio as of 9 October 2022.
In it, I shared all 50 holdings in the fund’s portfolio. As of 20 November 2022, Twilio is no longer in the portfolio after we completely exited the position earlier this month. Our sell-thesis for Twilio can be found here. Speaking of sell-theses, we’ve also released our detailed thoughts on why we sold Teladoc in mid-August – it can be found here.
In our mid-October 2022 portfolio update, we shared that two other companies – Activision Blizzard and Pushpay – could be removed from the portfolio in the near future because they could both be acquired soon. There are no material developments with Activision Blizzard’s acquisition since our last update but there are with Pushpay. On 28 October, Pushpay announced that it had agreed to be acquired by two existing shareholders – BGH Capital and Sixth Street – for NZ$1.34 per share (around A$1.23). Shareholder approval is still necessary for the deal and voting will happen in the first quarter of 2023.
Our current intention is for Compounder Fund to hold onto its Pushpay shares until the acquisition is completed or until we find an attractive opportunity to redeploy the capital. As of 20 November 2022, Pushapy’s share price of A$1.17 is still 5% away from the acquisition price, so if we sell now, we’ll be leaving a double-digit annualised gain on the table. And on the topic of deploying capital, Compounder Fund is currently holding onto the cash received from the aforementioned sale of Twilio as we search for redeployment opportunities. We’ve been looking at a few companies, both existing companies in the portfolio as well as new ones.
Here’s how Compounder Fund’s portfolio looks like as of 20 November 2022:
We’re sharing all this information with the public and with the fund’s investors for two reasons. First, we believe deeply in investor education and want Compounder Fund’s return and actions to be a source for people to learn about investing. Second, we believe that this transparency will help investors of Compounder Fund develop comfort with our investing process over time, which is great; in turn, this will also free us from the time-consuming activity of dealing with questions on how we invest, and thus give us more to invest better for our investors.
And here’s an important disclaimer: None of the information or analysis presented is intended to form the basis for any offer or recommendation; they are merely our thoughts that we want to share. Holdings are subject to change at any time.
