We believe the AI market is at the beginning of a multi-decade growth opportunity. As Nvidia CEO Jensen Huang recently stated: “No technology has ever had the opportunity to address a larger part of the world’s GDP than AI.”^[4]

The following chart highlights the disruptive and long-term secular growth trends that our investment team closely monitors on a day-to-day basis.

As we navigate an era of unprecedented technological change, our portfolio positioning reflects a focus on companies that are not merely adapting to change, but actively orchestrating it. The current market environment presents a compelling divergence between enterprises reimagining their industries and those trapped by legacy constraints.

Market leaders such as Amazon, Nvidia, Blackstone, Danaher, and Visa—key portfolio holdings—are spearheading innovation and disrupting legacy incumbents constrained by outdated infrastructure and business models. These companies continue to strengthen their competitive advantages and expand market share. What truly sets them apart is not just their current market-leading status, but the cultures of innovation they have cultivated.

Amazon continues to expand beyond e-commerce into cloud computing, logistics, and artificial intelligence, making substantial investments in infrastructure including multi-billion-dollar fulfillment centers and data centers. Over the years, Amazon has developed core competencies that have enabled it to broaden its addressable markets, enter new verticals like AI, and build new platforms for growth, notably AWS and Prime. We believe Amazon is well-positioned as the market leader in the ongoing multi-year growth of both e-commerce and public cloud, where secular shifts remain in their early stages. There is considerable growth potential in both e-commerce and cloud adoption. Global e-commerce accounts for about 20% of total global retail sales^[5] and more than 85% of global IT spending is still on-premises and not yet in the cloud.^[6]

Danaher started as a traditional industrial manufacturer, but over the past two decades, it has boldly reinvented itself. The company has pivoted toward biotechnology, life sciences, and diagnostics, which are less cyclical industries known for high margins and recurring revenue business models. Today, Danaher provides essential products and services that support the discovery, development, and large-scale manufacturing of biological medicines, including monoclonal antibodies, cell and gene therapies, and mRNA-based treatments. Danaher’s diagnostic companies enable more than 1.5 million cancer diagnoses every week. That is quite the journey from supplying general purpose mechanic tools through Matco and car tires through Mohawk Rubber.

Nvidia’s transformation is particularly striking because the company recognized early that its specialized hardware had applications far beyond gaming. Nvidia evolved from a graphics processing leader to becoming the essential backbone for artificial intelligence and cloud computing. Today, the company maintains several key growth drivers, including the transition from legacy CPU-based computing architectures to accelerated GPU-based computing, advancements in generative AI, the emergence of agentic AI (autonomous, non-human assistants), and the development of physical AI (humanoid robots and autonomous vehicles).

Visa began as a payment network facilitating credit card transactions among consumers, merchants, and banks with the launch of BankAmericard by Bank of America in 1958. The company later expanded beyond credit cards into broader digital payments including debit cards, prepaid cards, and online payment processing. Today, Visa is expanding into adjacent digital services beyond traditional card payments. This includes investments in cybersecurity and data analytics, partnerships with fintech startups, and exploration of blockchain and real-time payment technologies.

These companies have found their “second and third acts” as I highlighted in a previous letter available here.

Alternative asset managers Blackstone and Brookfield represent a different but equally compelling story. They’re not just riding a secular trend—they’re actively shaping it. Both companies are capitalizing on the accelerated shift of capital into alternative assets. According to PitchBook, a provider of private market data, global private capital assets under management (AUM) are projected to grow from $18.7 trillion in 2024 to $24.1 trillion by 2029—an estimated annualized growth rate of 5.2%.^[7] This secular trend is driven by institutional and private wealth investors seeking diversification, higher risk-adjusted returns, and uncorrelated performance compared to traditional stocks and bonds.

Institutional investors—including pension funds, endowments, sovereign wealth funds, and insurers—are actively increasing their allocations to alternative assets like real estate, infrastructure, private equity, and private credit. This shift reflects a fundamental recognition that traditional 60/40 (equity/bond) portfolios are insufficient to meet their long-term return objectives. A decade ago, alternatives represented a small share of institutional investor portfolios. According to Preqin, a provider of private market data, institutional investors allocated 22% of their portfolios to alternatives in 2024 (see chart below). Alternatives account for more than a third (35.4%) of foundation and endowment portfolios.^[8]