Spring 2022

KKR is positioned to benefit from a growing total addressable market (TAM) in asset management, with a strong business model that leverages scale advantages. The company has demonstrated significant growth in assets under management (AUM) and is expected to continue capturing market share in the alternative asset space, which is projected to grow at a high single-digit rate annually. KKR's diversified revenue streams and stability in earnings make it an attractive investment opportunity, especially in a turbulent market environment.

The investor believes Jack in the Box has significant upside potential due to its strong brand and operational improvements. They have presented a PowerPoint deck to support this investment thesis.

Nvidia has been a large position in the fund because I believe that AI and machine learning are going to be meaningful in terms of computational technology and computer science. Nvidia has the lead on the silicon aspect of it, and a durable one at that, which positions it well for continued success.

Google is one of the biggest positions in the fund due to its powerful network effects and the fact that people need its services. With eight products having over a billion users, it demonstrates strong durability and growth potential.

Amazon is mentioned as a big outperformer in the market, indicating its strong position and growth potential within the tech sector.

Netflix is highlighted as a powerful stock, suggesting its resilience and growth potential in the competitive streaming market.

Tesla is noted as a big outperformer, reflecting its strong market position and growth prospects in the electric vehicle sector.

Reliance Industries is positioned as the foundational infrastructure provider for India, which is expected to become the world's largest country by population. The company has a strong presence in both telecom and retail, making it well-suited to benefit from India's growth as a rising superpower.

I recommend a long position in KKR & Co. Inc. with a 5-year price target of $128.8, for an IRR of 20%.

Scientific Games is transforming into a more focused company by divesting its lottery business and concentrating on its gaming segment, where it holds a 75% global market share in instant lottery tickets. The new management under Jamie Odell is expected to drive growth and operational excellence, making it an attractive investment opportunity.

PAR Technology has a growing software business that has become more recognized over time, and the company's ability to effectively survey the industry provides insights into its potential success, particularly in the B2B market.

Scientific Games has undergone a significant transformation by shedding its sports betting and lottery businesses to focus solely on gaming. This strategic shift, coupled with a strong management team that has a proven track record at Aristocrat, positions the company for long-term free cash flow growth and operational success in the gaming industry.

Afterpay has shown significant traction in the U.S. market, expanding rapidly and gaining a large customer base. The company's unique positioning in the fashion sector, where consumers often browse and discover products, allows it to capture a larger share of the purchasing funnel compared to competitors. The potential for U.S. consumers to adopt Afterpay at similar rates as Australian consumers presents a substantial growth opportunity.

Afterpay has a strong brand loyalty among younger consumers who prefer its services over traditional credit cards. The company is expected to scale quickly by acquiring small and medium-sized fashion brands, which will enhance profitability as they charge higher fees to these merchants. Despite initial losses, the business model shows promise as it adjusts risk models effectively during economic downturns.

Coinbase is viewed positively due to the belief that there will eventually be real-world utility for cryptocurrencies. The transition from early adopters to mainstream users is expected to drive growth, and the underlying profitability of Coinbase is not fully appreciated by the market. The investor sees potential in the increasing adoption of crypto, which could lead to significant user growth.

Coinbase is well-positioned to capture significant market growth as the cryptocurrency market matures, potentially increasing its market cap from $2 trillion to $10-15 trillion. The stock is currently undervalued, trading at 5 times sales and 10-12 times earnings, despite projections of 50% CAGR growth. This discrepancy presents an attractive investment opportunity as the market has not fully recognized Coinbase's potential.

Zooplus had the potential to be the Chewy of Europe, but the investor sold it before it was acquired at a much higher price. The experience taught the investor the importance of aligning with management and not forcing changes that they are not willing to make.