We recently initiated a position in Forgent Power Solutions (FPS), a newly public manufacturer of electrical distribution equipment, including transformers, switchgear and prefabricated power systems for data centers and the broader electric grid. As AI infrastructure spending accelerates, power equipment has become a critical constraint on new data center capacity. Forgent’s ability to provide an integrated range of electrical products positions it well as customers seek faster and more coordinated solutions. Despite being less widely followed, we believe Forgent has strong long-term growth prospects and a valuation that leaves room for upside.

Forgent Power Solutions, Inc. (FPS), a manufacturer of mission-critical electrical equipment, was a new position during the second quarter. Forgent designs and manufactures the electrical distribution equipment used in datacenters, power grids, and factories, including transformers, switchgear, switchboards, transfer switches, and prefabricated eHouses and power skids. The Company was assembled by energy-infrastructure specialist Neos Partners as a roll-up of four specialty manufacturers and went public on the NYSE in February 2026. As of March 31, 2026, backlog stood at $2 billion against trailing revenue of $1.2 billion, up roughly 80% year-over-year. After 25 years of flat US electricity demand, we believe AI, reshoring, and electrification are driving a step-change in demand for electrical equipment, and we expect Forgent's addressable market to grow from $29 billion in 2025 to $75 billion by 2030. We therefore expect the Company to grow well in excess of a market that is itself compounding at approximately 21% annually.

Forgent Power Solutions, Inc. is a leading manufacturer of electrical distribution equipment used in data centers, the power grid, and industrial applications. The stock rose during the quarter as Forgent continued to deliver very strong financial results reflecting improving demand for its products amidst the broader data points on AI infrastructure and grid buildout continuing to point to strong growth for next several years. Forgent is gaining share with its ability to offer customized products at industry-leading lead times and is still just scratching the surface of its opportunity having sold very little directly to the biggest customers in the market.

We added two new positions in technology, including Forgent Power Solutions, which we believe has strong growth prospects. Our focus remains on identifying high-quality growth businesses with sustainable competitive advantages, and Forgent Power Solutions fits this criterion. The technology sector is a key area of our portfolio, and we are optimistic about the potential for companies like Forgent to contribute positively to our overall performance.