International Concentrated Growth: investor letter Q3 2025

As with any investment, your capital is at risk.

Innovation, sovereignty and the long game

Political pieces are moving around the global tech chessboard. From Washington’s push to re-shore chipmaking to Beijing’s race for silicon sovereignty, the contest to build and control the compute stack continues to intensify. For long-term growth investors, this is fertile ground. Disruption on this scale doesn’t just reshape industries; it creates new ones. Semiconductors are the new oil. With them, economies digitise and AI advances; without them, progress stalls.

For international investors, developments in US tech policy and capital allocation are increasingly relevant, given their influence on global supply chains and competitive positioning across markets. NVIDIA’s recent $5bn investment in Intel, alongside a multi-year product collaboration, is the latest public example of what is certainly fervent activity behind the scenes. 

The US needs domestically anchored, full-stack, semiconductor manufacturing capability, and market leaders are being nudged by economics and policy to help build it. That policy context matters, and the objective is unambiguous: restore leading-edge logic manufacturing onshore and hard-wire national security interests into industry objectives. 

That combination of carrots and constraints is designed to create a durable domestic champion that can serve hyperscalers, defence and industry without relying on supply chains vulnerable to geopolitical shocks.

While NVIDIA and Intel grab headlines, other important collaborations are flying somewhat under the radar. Recent news of ASML’s work with Mistral, the French large language model developer, is just one example. Alliances are being forged across the semiconductor ecosystem, broadening beyond the obvious players, potentially shaping new technology standards and shifting competitive dynamics in subtle but meaningful ways.

The US is not alone in treating chips as strategic infrastructure. Export controls have tightened the flow of top-end GPUs to China, increasing the incentive for domestic alternatives. During the quarter, we travelled to China, meeting with both public and private companies across their domestic semiconductor supply chain. 

From Jaguar Micro, developing data processing units for artificial intelligence workloads and next-generation data centres, to general-purpose GPU developer Biren Technology, who may only be a few years behind NVIDIA, what we witnessed was rapid progress towards self-reliance. Factories, research parks, supply chains, all moving with a single-minded purpose: self-reliance. We do not take a view on precise timelines, but we do expect persistent, determined evolution.

Leadership in AI won’t be decided by algorithms alone. It will be defined by who can deliver compute at scale, reliably and affordably, in the right geographies. That’s why we continue to back the ‘picks and shovels’ of the industry, while also spending time to understand substitutes and parallel stacks being developed around the globe, the ripple effects of which could be profound. As NVIDIA’s CEO noted recently, ‘anyone who discounts Huawei and Chinese manufacturing capabilities is deeply naive.’

The International Concentrated Growth portfolio has meaningful exposure to the semiconductor value chain. Holdings in NVIDIA, TSMC, and ASML each offer unique exposures to what we believe is the most valuable supply chain in the world. We see a notable disconnect between US hyperscalers’ capital expenditure forecasts and the growth expectations currently priced into the global supply chain. 

While hyperscaler investment appears durable, the supply chain’s growth potential is still materially underestimated. Many critical enablers of AI and advanced computing are still underappreciated by the market. 

Both ASML and TSMC were among the top contributors to the portfolio's performance over the quarter, reflecting their essential roles at the forefront of semiconductor manufacturing.

From rails to riders: the rise and rise of digital consumption

Historically, the greatest value has often emerged not just from building infrastructure, but from the businesses that operate on top of it. Railroads enabled commerce, but it was the companies moving goods and people that captured enduring growth. 

Today, the same logic applies in the digital world. The scale and local relevance that define digital infrastructure also underpin the consumer platforms we favour. Turning from the rails to the riders, we continue to see compelling opportunities in the rise of digital consumption.

Leading emerging market consumer internet companies illustrate the scale of the opportunity. They sit at the intersection of vast addressable markets and improving unit economics.

Crucially, today’s leaders are no longer dependent on external capital. They are increasingly self-funding and self-reinforcing. In many cases, fintech integration and logistics capabilities deepen their competitive moats. 

This is most evident in the case of MercadoLibre, which remains one of the largest positions in the portfolio and, despite detracting from performance during the quarter, remains one of the strategy's leading contributors to performance over the last five years.

MercadoLibre continues to demonstrate what an integrated commerce–fintech flywheel looks like in full motion. Even as the company invests in free shipping in Brazil to deepen customer habits, profitability remains intact. We’ve seen this playbook before: near-term trade-offs that consolidate share, reinforce loyalty, and ultimately strengthen the franchise.

Nubank is executing with similar clarity. Growth is no longer just about adding new clients. The story is shifting toward expanding share of wallet with credit, savings, and insurance products, all underpinned by powerful data, low distribution costs, and a brand with exceptional customer resonance. Profitability at this stage reinforces the durability of its economics, even as the macro backdrop shifts.

We have also spent time with Sea and Coupang recently, two companies whose models rhyme more than they overlap. Sea’s integrated ecosystem is thriving, with commerce and gaming reinforcing one another, while new engagement mechanics, like live streaming and gamification, keep users deeply embedded. Coupang, by contrast, remains the clearest expression of ‘logistics as a moat’, building scale advantages through relentless efficiency and density. Both approaches are working, each suited to its home market and growth ambitions.

Enduring scarcity at the other end of change

Digital infrastructure and consumption are the two most prominent structural trends represented in your portfolio. At the other end of the spectrum sit companies unlikely to be fundamentally altered by digital advances. 

Luxury brands such as Hermès and Ferrari, whose value rests on scarcity, craftsmanship, heritage, and pricing power, may use digital tools to enhance operations, but the core product and demand drivers are unlikely to change.

We have held Ferrari in the strategy since it was spun off from Fiat in 2016. In fact, it was Ferrari, long the jewel in the Fiat crown, that drew us to add Fiat to the portfolio in 2012, as we noted at the time:

"The main attraction of Fiat is undoubtedly Ferrari, a supply-constrained luxury brand for which demand in a number of countries is growing rapidly. This has consistently been a profitable part of the Fiat group, but what appeals to us is the potential for production to rise rapidly for some time, as happened at Porsche a few years ago. We think it is quite conceivable that Ferrari could produce 2-3x its current number of cars without damaging its brand."

Over the following decade, Ferrari has indeed doubled sales volumes and compounded its advantages by willingly growing value rather than units. That discipline will be on display again at Ferrari’s Capital Markets Day later this month, when management will outline the first-ever full electric Ferrari. 

The important point for us is not a single model, but the consistency of Ferrari’s stewardship of the brand, protecting scarcity and compound advantages. That they do this so consistently, and the financial outputs they produce can sometimes be taken for granted, yet what they have achieved is remarkable value creation for shareholders.

Contrast that with Porsche's recent experience. A distant peer by brand cache, Porsche has delivered a very different experience since its 2022 listing. The company continues to reduce its financial outlook, reflecting slower-than-hoped electric vehicle (EV) uptake and the profitability drag of overlapping launches. 

We do not doubt Porsche’s engineering depth, but the franchise currently faces high execution risk across electrification and pricing power, variables where Ferrari’s smaller scale and tighter control have historically been assets.

Luxury businesses remind us that brand is a system: product excellence, scarcity management, and a culture that knows when not to grow. Ferrari has been exemplary in each dimension. We will listen closely at the Capital Markets Day to hear how the company intends to carry those principles into an electric era, but we approach that event as long-term owners of a scarce asset.

Innovation Endures, Sovereignty Matters

Although returns remain positive, the portfolio has given up some ground during the quarter and is modestly behind the index year to date. We do not aim to outperform on a quarter-by-quarter or even year-by-year basis; instead, our focus is on delivering superior returns over long horizons. On this measure, the strategy’s longer-term performance remains excellent.

Just as semiconductors embody sovereignty in the digital age, and as consumer platforms redefine scale and relevance in commerce, so too do luxury brands exemplify enduring scarcity and value creation. 

In each case — whether chips enable AI, platforms reshape consumption, or brands preserve scarcity — the common thread is the pursuit of scarce assets with compounding advantages. These are enterprises aligned with structural change, not short-term cycles. 

Our role as long-term growth investors is to identify and support scarce franchises early, stay patient as they scale, and remain aligned with managements who focus on long-term value creation. That is the long game we continue to play on your behalf: backing innovation and stewardship where they intersect to create enduring value. 

International Concentrated Growth 

Annual past performance to 30 September each year (%)

Annualised returns to 30 September 2025 (%)

Source: Revolution, MSCI. US dollars. Returns have been calculated by reducing the gross return by the highest annual management fee for the composite. 1 year figures are not annualised.

Past performance is not a guide to future returns.

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