Clearwater Analytics Holdings Inc - Class A

We believe Clearwater Analytics Holdings, Inc. has meaningful competitive advantages and the potential to compound revenue at a high teens to 20% rate for several years. The company provides portfolio accounting and reporting software, and while it reported strong quarterly earnings, shares fell as investors sought evidence that management can successfully integrate its three recent acquisitions without disrupting the core business. However, we retain conviction as Clearwater has an efficient business model that should drive 40%-plus adjusted EBITDA margins over time.

Clearwater Analytics Holdings, Inc. offers a software platform for investment accounting, compliance, risk management, and reporting, providing asset managers and insurers with daily insights into portfolio holdings. Although the stock reacted negatively during the quarter due to the completion of an acquisition, we continue to like Clearwater as we assess the implications of this acquisition on its business. The company operates in a sector that is increasingly benefiting from the use of artificial intelligence, which enhances its growth potential.

Clearwater Analytics Holdings, Inc. (CWAN) is a leading SaaS-based software platform for automating investment accounting and analytics. Although CWAN shares were weak during the 2Q, the 1Q results were above expectations. The company has announced three acquisitions in 2025, which we believe bring attractive long-term opportunities. However, there are near-term execution risks as these companies are integrated into CWAN.

Clearwater Analytics was the largest single stock detractor in our portfolio, facing investor debate about the company’s ability to integrate recent acquisitions. This uncertainty has led to concerns regarding its future performance, contributing to our decision to exit the position.

Within IT, exposure to mission critical software company Clearwater Analytics, Intapp and Varonis in security software contributed to relative outperformance. The manager highlights Clearwater Analytics as part of a group of higher-quality compounders and idiosyncratic growth stories that have positively impacted the portfolio's performance, indicating confidence in its growth potential and market position.

Within IT, exposure to mission critical software company Clearwater Analytics, Intapp and Varonis in security software contributed to relative outperformance. The Strategy overcame the headwind from a still-sizable relative underweight in biotech, outperforming the benchmark and with strong idiosyncratic stock performance — six out of our 10 holdings in the industry were relative outperformers.

Within IT, exposure to mission critical software company Clearwater Analytics, Intapp and Varonis in security software contributed to relative outperformance. The Strategy overcame the headwind from a still-sizable relative underweight in biotech, outperforming the benchmark and with strong idiosyncratic stock performance — six out of our 10 holdings in the industry were relative outperformers.

Within IT, exposure to mission critical software company Clearwater Analytics, Intapp and Varonis in security software contributed to relative outperformance. The manager highlights Clearwater Analytics as part of their strategy to identify idiosyncratic growth stories that can compound strong returns over time, indicating confidence in its performance and potential.