Interactive Brokers Group Inc - Class A

Interactive Brokers (IBKR) is among the largest and most efficient brokerage companies in the U.S., with profitability rates higher than those of Visa and Mastercard. The company has over 4 million clients worldwide and manages $700B in capital with only 3000 employees. IBKR's unique platform allows for better trade execution and lower costs, contributing to its profitability primarily through Net Interest Income. Despite trading at an elevated P/E, its performance and almost monopolistic status justify continued ownership. The stock value rose over 45% in 2025, with a 30% increase in new accounts, reflecting strong growth potential.

The Business Owner Fund sees strong growth potential in Interactive Brokers, which grew its top line by 25% in the first half of 2026. This growth is expected to drive intrinsic value growth, aligning with the fund's strategy of targeting companies that can grow their intrinsic value by 15% or more annually. The manager believes that the underlying assumptions for this growth are conservative, requiring only a continuation of existing trajectories without needing a step-change in growth or profitability. Valuations are considered attractive, suggesting that Interactive Brokers is well-positioned for future performance.

The Business Owner Fund sees strong growth potential in Interactive Brokers, which grew its top line by 25% in the first half of 2026. This growth is expected to drive intrinsic value growth, aligning with the fund's strategy of targeting companies that can deliver a 15% return. The manager believes that the underlying assumptions for this growth are conservative, requiring only a continuation of existing trajectories. The attractive valuations, despite temporary headwinds in some sectors, further support the bullish outlook on Interactive Brokers as a solid investment.

We believe Interactive Brokers Group, Inc. is well-positioned for continued growth, as evidenced by its strong performance, with shares appreciating 29.69% in the quarter. The company has demonstrated a robust business model that capitalizes on the increasing demand for brokerage services. With a focus on maintaining a competitive edge, Interactive Brokers is expected to benefit from favorable market conditions and its ability to attract new customers, further solidifying its market position.

Interactive Brokers (IBKR) has quickly become a top performer after being added during the market volatility of last year. We continue to benefit from their highly scalable, low-cost platform and an automated, engineering-driven approach to the brokerage industry. This positions IBKR favorably in a competitive landscape, allowing it to capture market share effectively and maintain strong margins.

Our position in Interactive Brokers Group, Inc. class A common stock (NASDAQ: IBKR) made a notable positive contribution to our portfolio, gaining 4.3% for the quarter. Even after trimming our position early in the quarter at prices notably higher than where IBKR ended, it still represents a mid-teens percentage of the portfolio’s value. This reflects our confidence in the company's growth potential and its strong performance relative to the market.

Interactive Brokers Group Inc. edged forward by 7% over the quarter, driven by account growth and increased trading volume. The company's performance reflects its strong position in the electronic brokerage space, which continues to attract investors. The growth in accounts and trading activity indicates a robust demand for their services, positioning them well for future performance in a competitive market.

We continue to believe these businesses have strong competitive advantages with underpenetrated growth opportunities ahead of them and robust balance sheets to finance their growth. Interactive Brokers Group, Inc. is highlighted as a company that is well-positioned to benefit from these trends, and we see significant potential for appreciation as it capitalizes on its competitive strengths.

Interactive Brokers Group, Inc. is a compounder investment that Hinde Group has held since inception, delivering a 26.8% compound annual return over more than a decade. In 2025, IBKR delivered stellar operating results with total customer accounts and customer equity growing 32% and 37%, respectively. Despite headwinds from monetary policy easing, adjusted EPS grew 24.4%. The company is poised for strong performance, with expected earnings growth at least at a mid-teens annual rate, and aims to pay a dividend yield of 0.5% to 1.0%. IBKR's intrinsic value is rapidly growing, and as market concerns fade, its stock price should reflect this growth.

Interactive Brokers has been a significant beneficiary of the long-term democratization of financial markets, evidenced by a compound growth rate of 29.9% per annum in account numbers since 2016. This growth has been fueled by increased retail participation and the internationalization of its services, allowing global clients access to US equities. The manager believes that the structural changes in the market, including the rise in retail investor activity and options trading, will continue to support Interactive Brokers' growth trajectory despite potential cyclical peaks in trading volumes.