Virtu Financial Inc - Class A

Higher levels of individual security volatility – to the benefit of our largest holding Virtu Financial – served up an opportunity to acquire an archetypal 'Peter Lynch/Victor Kiam' business in the latest quarter. The shares are currently priced at a forward P/E of 22x with 27% ROE and – subject to regulatory compliance – a competitive advantage which doesn’t appear to reflect this. With rolling twelve months to March 2026 cross-border volumes up 31.5% feeding 17.3% revenue growth and customer balances up over 36%, in our view, the company is at an advantageous point of the growth curve.

Virtu Financial has demonstrated strong performance, contributing significantly to our portfolio with a 32% gain in Q425 results. The company is a major US liquidity provider in equities, which positions it well in the current market conditions. We believe that its operational advantages and market position will continue to yield positive results, justifying our decision to increase our stake in the company.

Virtu Financial was mentioned in the context of performance attribution, where it contributed negatively to the quarterly return. The letter notes that Virtu Financial had a negative contribution of -92bp with a return of -20.7%. However, there is no further analysis or directional argument provided regarding its future performance or investment potential.

Virtu Financial has demonstrated strong performance, contributing 244 basis points to our quarterly return and 99.4% over the past twelve months. This performance reflects the company's operational excellence and ability to generate significant cash flow. We believe that Virtu is well-positioned to capitalize on market opportunities, and its commitment to shareholder returns aligns with our investment philosophy. The company's robust earnings and strategic positioning in the financial services sector make it an attractive addition to our portfolio.