Large Cap Investing During Volatile Markets


This is allowing these companies' growth to be secular and not hampered by the cyclical headwinds. I think it's really important to highlight how important these innovations are to the new world and it's across sectors–whether it's retail or real estate or really any sector. There's a company that we own called CrowdStrike. This is a security vendor that specializes in endpoint security. As endpoints become proliferated everywhere and everyone is working from home on a laptop, companies are rushing to figure out how to make these networks secure. Crowdstrike is a big beneficiary of this: they just reported earnings a few weeks ago and they're seeing 70% growth in their bookings. And that's a clear beneficiary of a trend that is going to likely be around for awhile; we will be working from home for–maybe it actually changes the way we work. There's another company we own, CoStar Group, and they're seeing a net benefit to having an online digital apartment rental service. Recently we spoke with them and they're saying they're seeing a 50% increase in incoming calls of building owners that would like to put their apartments virtually online because you can't do in person rentals anymore and people can't come see the apartments. So digitizing that process is going to be accelerated as building owners need to rent their apartments during this time of crisis. Both Nike and Lululemon just reported their numbers. They had 30%–40% growth in their digital sales. It is changing the way consumers are going to interact with these brands. These are just a few examples that we pulled out to illustrate how there can still be winners in such a challenging environment and that innovation is still leading. Kevin Collins : Thanks for that discussion about transformational innovation and how it's actually accelerating in today's environment; it's giving us a lot to process. Finally, would either of you like to convey any final thoughts before inviting questions? Patrick?

Patrick Kelly : I would say that the coronavirus will have a significant impact on the economy and businesses, which is well known. The government is responding with massive monetary and fiscal stimulative measures. It's difficult to predict what the market will do over the next month or two but I do think this downturn sets up a very compelling long term buying opportunity and we're focused on innovative companies, as we talked about, that are benefiting from the secular growth trends and companies that will emerge out of this downturn in a much stronger competitive position. Ankur Crawford : I want to assure our clients that the investment team hasn't missed a beat. We are working just as if we were working in the office. We're researching innovation and, being so deep into innovation, it was effective in helping us configure our remote work contingency. We're safe and we're securely networked and interacting continuously, more intensely than ever. We're spending our days looking for opportunities in the market that are presenting themselves and talking to owned companies across the portfolio, talking to people on the ground, to better understand how things are unfolding. And we'll continue to do so, as things bounce back and to really delve into how to best position the portfolios coming out of this. There's no question that this is an unprecedented time but as we have said many times before, where there is change, therein lies the opportunity and our team is embracing that opportunity as we speak. Kevin Collins : Ankur, do you have any final thoughts?

Kevin Collins : Thank you, Ankur, and thank you, Patrick, for your thoughts. We'd like to open it up now, Operator, for questions from our investors.

Speaker Question : I know the Spectra strategy has the ability to short up to 10%. Have you done any shorting? When did you start doing that and kind of what triggers the shorting position?

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