RV Capital's Letter to Co-Investors in the Business Owner Fund for the first half of 2023
Sep 5, 2023
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The podcast discusses new investments in Interactive Brokers, increased investments in Meta Platforms and Ryman Healthcare. It also explores why the fund is concentrated in individual companies and what drives their weighting in the portfolio. Additionally, there is a discussion on AI and its impact, as well as the fear of AI replacing website software. The podcast also announces Aavee Capital's annual gathering with special guest, Nia Zohar from Wix.
AVI Capital made new investments in Interactive Brokers, Meta Platforms, and Ryman Healthcare.
AVI Capital follows a concentrated investment strategy with around 10 holdings for potential outperformance.
AVI Capital believes that Wix offers more than just website creation and its value should not be underestimated.
Deep dives
Increase in Business Owner Fund's NAV
The NAV of the Business Owner Fund increased by 27.1% in the first half of 2023, reaching 669.03 euros. This represents a compound annual growth rate of 13.8% since the fund's inception in 2008.
Portfolio Changes in the First Half of 2023
During the first half of 2023, AVI Capital made several changes to the Business Owner Fund's portfolio. They reduced holdings in credit acceptance and process and sold their stake in ad life due to their outperformance relative to other holdings in 2022. The proceeds went into three new investments: Interactive Brokers, Meta Platforms, and Raimin Healthcare.
Investment in Interactive Brokers
AVI Capital acquired a stake in Interactive Brokers, a financial services company based in Greenwich, Connecticut. The purchase was made during the crisis triggered by the collapse of Silicon Valley Bank, which led to an unjustified drop in Interactive Brokers' share price. AVI Capital believes that Interactive Brokers, as a low-cost producer with a wide range of financial services and a strong customer base, is well-positioned for profitable growth.
Increased Stake in Meta Platforms and Capital Allocation at Ryman Healthcare
In addition to Interactive Brokers, AVI Capital increased its stake in Meta Platforms, taking advantage of the attractive valuation and its growth potential. They also supported the capital increase at Ryman Healthcare, a retirement village operator in New Zealand and Australia. The decision was based on Ryman's long runway for growth, its win-win business model, and the belief that the company can regain its entrepreneurial spirit.
Concentration Strategy and AI Impact on Wix
AVI Capital follows a concentrated investment strategy with around 10 holdings, enabling in-depth research and building relationships with management. They believe that this approach provides opportunities for outperformance compared to a diversified portfolio. Regarding the impact of AI, AVI Capital dismissed concerns that website building software, such as Wix, will be replaced by AI. They argue that Wix offers more than just website creation and that investors should not underestimate its value in the market.
