Amy Zhang Call Transcript


Amy Zhang (continued): COVID and work from home have accelerated certain investment themes, especially digital transformation. We’ve invested in digital transformation for over 10 years. Even, say, 15 years ago, I was talking about the kind of companies we invest in that are about turning data into actionable information and automation. And that really transcends every industry. So the first one, digital transformation, is about work from anywhere that has unquestionably been accelerated by the pandemic. But I also think a hybrid work environment is going to continue in the new normal. And so, we think that’s a very sustainable investment theme. That really transcends into other areas. People think about SaaS and technology but, as you know, digitization transcends other industries. It could be a restaurant, in terms of digital strategy, and also a telehealth company using a digital strategy for better clinical outcomes in health care. There are numerous examples of that. And then there is e-commerce and cloud computing and cybersecurity. Those are represented in our portfolio and then you will also notice, as I mentioned, that health care, including diagnostic companies, is a very, very important area – especially for people who have to manage certain diseases or pre-existing conditions like diabetes. For such diseases, it’s very important to monitor data and turning that data into real-time intelligence. That is really lifesaving. We have invested in diabetes companies, including makers of insulin pumps, for a very long time. And it’s also about early detection. They need to be aware of the problem. I think, unfortunately with COVID, we all feel that we need to take better care of ourselves – nothing’s more important than our health. So, the adoption of medical devices for the companies we invest in is also a theme. We can see a theme in them in terms of digital transformation. Innovation really transcends a lot of different sectors.

portfolio at all? Do you own positions directly tied to a potential vaccine?

Amy Zhang: At a portfolio level, we have taken a barbell approach. We have companies that provide office solutions and other companies that provide health care solutions, whether it’s testing or digital strategies or technology allowing working from anywhere during the COVID crisis. But also, we have companies that would do well because, clearly, we are recovering and moving toward normalizing, hopefully sooner rather than later. As you know, I worry about low probability/high impact events and I don’t like high binary events. We wouldn’t want to invest in companies that live and die by an FDA decision that can drive a stock price up and down 50%. However, I have always thought about what we can have exposure to in important sectors. Biotech is a very important sector, so we have several companies with exposure to that. I will just highlight one, which is our largest holding now in Small Caps Focus, which is Cryoport. I have invested in it since May 2018, so it’s been a while and you can see the tremendous growth of the company. They’re the leading global provider of very critical logistics and cloud-based software for temperature-sensitive materials for the life-science industry. I almost think about them as the UPS and FedEx in the life science industry in a very simple way. It’s a niche market that they have become more dominant in and especially in the COVID period now, there are so many therapeutics and vaccines in the works. They help clinical trials and they are exposed to eight therapeutics and vaccines. That’s very significant. We think that’s part of the reason the stock has done well. And they also made two transformative acquisitions. So, I always think about how we can play the sector but in a prudent way. It’s not just about growth. When I think about sectors and subsectors, there are so many life sciences companies that have so much pent- up demand and they’re going to do well once this pandemic is normalized and we’re are already seeing that now. And then also there’s the recovery trade in other ways.

Matt Goldberg: So, Amy, just to piggyback maybe on the health care sector or that example, in anticipation of a vaccine. Are you changing the positioning of the

Conference Call 2/9

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