Intercontinental Exchange Inc

We recently established an investment in Intercontinental Exchange, a business we have followed for nearly a decade. ICE is a leading global exchange operator with a highly moated Exchanges segment generating nearly 70% of earnings, anchored by a crown-jewel energy franchise with revenues more than two-and-a-half times those of its next-largest competitor. Over the last five years, Exchanges grew revenue 8% and profits 10% annually, with margins expanding to 75%. Despite exceptional earnings growth, ICE shares fell 21% in the year before our purchase, driven by concerns over AI's impact and competition. We believe these concerns will not impair ICE’s earnings power or intrinsic value.

Intercontinental Exchange (ICE) has shown strong financial performance, with first quarter revenues significantly higher than in 2025, and an operating margin that has also improved. The relationship between rising revenue and expanding operating margins is evident in the full-year 2025 results, which reflect a 6% revenue expansion and a 33% after-tax net profit margin, leading to a double-digit per-share earnings growth rate. This low incremental cost for rising transaction volume indicates a robust business model, with a 14% increase in per-share earnings matching the 20-year annualized increase of 15%. Overall, ICE appears to be a strong and growing business.

Intercontinental Exchange demonstrated strong performance with a return of +23.9%, contributing positively to the Fund's overall results. This outperformance reflects the resilience and growth potential within the financial services sector, particularly in the context of ongoing market dynamics. The Fund's strategy continues to benefit from such high-performing stocks, indicating confidence in the company's future prospects and its ability to generate returns amidst market fluctuations.

Intercontinental Exchange demonstrated strong performance with a return of +23.9%, contributing positively to the Fund's overall results. This outperformance highlights the resilience and growth potential within the financial services sector, particularly in the context of ongoing market dynamics. The Fund's strategy continues to benefit from such high-performing stocks, reinforcing the belief in the company's robust fundamentals and its ability to generate significant returns.