Tradeweb Markets Inc

Tradeweb Markets operates electronic marketplaces for institutional, wholesale and retail clients across various asset classes, including rates, credit, money markets, and equities. The investment case is bolstered by a network effect, as Tradeweb is well-positioned in the ongoing electronification of fixed income, which has significant growth potential in under-penetrated areas. The company is capital-light, has shown recurring margin expansion, converts nearly all earnings to free cash flow, and maintains a strong balance sheet. Recent share price weakness, attributed to competition concerns, has created an attractive entry point for this quality compounder with a long growth runway.

Tradeweb operates one of the largest global over-the-counter fixed income electronic trading marketplaces. Continued momentum in interest rate swaps and international markets, together with a long runway toward the electronification of fixed income markets, supports a path to sustained growth and margin expansion, in our view. While credit market share remains an area we continue to monitor, ongoing product enhancements and a significant addressable market may provide meaningful long-term upside. We took advantage of the recent pullback to add to the position.

Tradeweb operates one of the largest global over-the-counter fixed income electronic trading marketplaces. Continued momentum in interest rate swaps and international markets, together with a long runway toward the electronification of fixed income markets, supports a path to sustained growth and margin expansion. While credit market share remains an area we continue to monitor, ongoing product enhancements and a significant addressable market may provide meaningful long-term upside. We took advantage of the recent pullback to add to the position.

Tradeweb was one of the largest detractors in our portfolio during the quarter. Despite the overall strength in the financial sector, our position in Tradeweb did not perform as expected. The market dynamics and recent performance suggest that we need to reassess our exposure to this electronic trading platform, especially as we focus on reallocating capital towards more resilient and higher-quality businesses.

Tradeweb Markets (TW) was a large detractor from performance despite a favorable earnings report that exceeded expectations and favorable monthly updates since. We like the secular theme of trading electronification, international opportunities, and the company’s competitive position and are encouraged by the resumption of share gains recently.

Tradeweb Markets Inc (TW) shares were weak during the quarter alongside peer MarketAxess despite continued healthy trading activity across its platform. The market focused on lower rate volatility, tighter credit spreads and the possibility that fixed-income trading activity could normalize from elevated levels.

Tradeweb operates one of the largest global over-the-counter fixed income electronic trading marketplaces. We reinitiated a GardenSM position following a prior exit in mid-2025, with the stock now trading at a more attractive valuation and the recent pause in market share gains appearing temporary. Continued share gains in interest rate swaps, strong international growth and a long runway toward the electronification of fixed income markets support a path to sustained growth and margin expansion. We view the business as a durable compounder with limited disruption risk.

Stock selection in the financials sector also weighed on performance, largely stemming from declines from marketplace operator Tradeweb Markets. Tradeweb, one of our top performers in the first quarter, took a breather as investor enthusiasm and growth expectations outpaced fundamentals. Despite reporting strong first-quarter earnings, the company’s performance did not meet the growth and profitability improvements that many investors had priced into the stock, resulting in a share price pullback even as the business remains solid.

Tradeweb has been part of the Fund for just under two years. The company continues to strengthen its presence across asset classes that are still in the early stages of electronic trading adoption. February’s strong trading volumes further solidify the company’s leadership in its core market being rates or government bonds. More notably, Tradeweb has secured the top position in electronic trading for U.S. high-grade credit, capturing a 17.8% market share—driven by advancements in trading protocols and growth in portfolio trading. With the structural shift toward market electronification and the backdrop of ongoing market volatility, we believe Tradeweb remains well-positioned for continued success.

Tradeweb Markets Inc. operates electronic marketplaces for fixed income securities. Shares rose during the quarter due to strong volume trends driven by favorable market conditions and share gains in key products. Credit products saw accelerating growth with trading volume up 39%, while rates products saw stable trends with 14% growth. We believe Tradeweb can achieve solid growth in a variety of macroeconomic conditions and expect further market share gains to drive growth long-term upside. We continue to own the stock due to Tradeweb’s strong network effects, long track record of innovation, and significant growth opportunities from the ongoing electronification of the capital markets.