The trades, themes and risks shaping Antipodes’ strategy

Those who are avid readers and watchers of Livewire content will know one of our most popular series: Buy Hold Sell. It features two fund managers going head-to-head to share their views on a handful of stocks - it’s fun, energetic, and a great source of ideas for further research.

However, single-stock calls have limitations. Views can change rapidly as new information emerges and, importantly, professionally managed portfolios are diversified, often containing 40–60 positions. The goal is to achieve smoother returns and reduce the risk of any single stock "blowing up" the portfolio.

To dig deeper into how a professional portfolio operates, we reached out to James Rodda, a Portfolio Manager at global equity house Antipodes Partners. The Antipodes Global SMID Fund has had a strong run, returning 25.86% over the past 12 months and averaging 24.77% p.a. over the past three years. 

Rodda leads the Europe/North America Domestic team, covering consumer, domestic services, financials, technology, media, and telecommunications. In this Q&A, we dive into recent portfolio changes, significant sector tilts, and the topics dominating discussions within the Antipodes investment team.

Can you share a recent portfolio addition and provide an overview of the thesis behind the position?

Against the software selloff, we are looking for companies that can be agentic winners. We recently initiated a position in Bandwidth (NASDAQ: BAND), which operates one of only a handful of privately-owned carrier-grade IP networks with global reach and connectivity to PSTN (public switched telephone networks) in over 60 countries. 

Bandwidth provides underlying calls for nearly every major cloud communications platform, including Microsoft Teams, Google Meet, and Zoom. Legacy contact centre software companies now allow them as an option for enterprises to use alongside legacy telcos. Carrier-grade IP networks are historically low-growth and are priced as such, but we see AI-powered voice as a structural growth driver. 

Every AI agent call must pass through a network like Bandwidth’s network so they will take a share of calls from the likes of Telstra, AT&T, who may not adapt fast enough to route a call to an agent and get the agent to process the conversation and talk back to you in the millisecond latency required. This can’t be vibe coded as they have government approvals (eg, Federal and state-based) to act as a telco and are installed in major Telco networks. These are very long lead approval items and complex deals. 

Already, we see the likes of Salesforce using Bandwidth’s network for their new Agentforce Contact Centre solution, which is an agent-first solution. Their AI-focused Maestro platform should generate 3-4x the revenue of a standard voice call for an agent call. The company trades on roughly 12x 2026 P/E, from around 9x when we added it. 

It is well placed for a world where over 1bn calls a year switch from human-made to agent-made, and we anticipate topline growth will accelerate to well into the double digits

What was the most notable sell or downsize in the portfolio this month/quarter and why?

The sharp drawdown in software triggered a reassessment in the competitive advantage and probability of disruption in a number of positions. 

The conclusion, which admittedly is now fairly consensus, is that software is becoming agentic and that names without a strong, logical agentic roadmap may suffer material disruption risk over time. As such, we exited positions in Monday.com (NASDAQ: MNDY), Similarweb (NYSE: SMWB), Kingsoft (HKG: 3888), Magnite (NASDAQ: MGNI) and Gitlab (NASDAQ: GTLB) despite their attractive valuations on concerns that agentic AI can disrupt their traditional seat-based SaaS models. 

We either do not anticipate with confidence these firms will be winners from the move to agentic software usage (via Claude, Chagpt or even Slack as access points) away from GUI (graphical user Interface) usage, or we are unclear and prefer to look for more evidence of success in sold-off software names where we have more confidence. 

Vertically integrated travel platform Navan (NASDAQ: NAVN) has been a recent software winner for us and a clear example of an agentic software product poised for high and accelerating growth with clear barriers to entry.

What’s is your most significant overweight and why?

We are very overweight defensive assets in general, essentially all defensive sectors with the exception of consumer staples. Real estate and infrastructure holdings combine for five of our top ten holdings and include;

• Brazilian regulated water utility SabesP (BVMF: SBSP3), which trades slightly above its RAB (regulated asset base) and has a 10+ year pipeline of projects that can allow it to grow its RAB double digits per annum and earn double-digit returns on that capital.
• Indonesian mega-mall owner Pakuwon Jati (IDX: PWON) is essentially the Westfield equivalent in Indonesia. We are buying Pakuwon at a 13% cap rate (cap rate = rent less costs like maintenance, insurance, taxes, etc., as a per cent of what we pay for the stock) with rental income growing in high single digits per annum, and it is effectively debt-free with a huge further land bank.
• The world’s largest flexible workspace solutions operator International Workplace Group (LON: IWG), a case I recently covered on our podcast. With office leasing set to become more popular as companies refrain from long leases and fit-out commitments in a world of AI-driven uncertainty over required employment levels, capital-light businesses such as IWG are positioned to benefit. IWG’s most notable competitor, WeWork, has been marred by questionable management decisions, meaning IWG can continue to grow quickly by taking share, yet is valued on a single-digit P/E by 2028 on our numbers.
• Nordic electricity utility Fortum (HEL: FORTUM), which is mainly powered by nuclear and hydro. These assets are low cost, but importantly, the electricity is sold for a fraction of both Western Europe's electricity prices and what AI companies pay for data centre capacity, let alone emission-free capacity. In our view, demand will find their supply over the next 5 years and their tariffs will rise.
• Lastly but not least, our largest position is Brookdale Senior Living (NYSE: BKD), which is an assisted living company providing residences to the elderly in the later stages of life. The first cohort of baby boomers just turned 80 and will be 85 in 5 years. Against this demand, we see a material bed shortage by 2028 in the US and think the stock can multiply over the next few years as room pricing is increased and bed utilisation rises, assuming an end cap rate of around 7%

What are you underweight or avoiding?

We are broadly underweight consumer discretionary and consumer staples, where we aren’t comfortable with the near-term outlook, especially for smaller companies. One of our advantages is being part of a global institutional-grade research team at Antipodes and our coverage of large and mega-cap stocks and deep industry research in most major sectors. This research usually has clear flow-on impacts for smaller companies.

On the discretionary side, we see several issues. Wallets are getting massively squeezed by energy, unemployment risks are large around AI, retail is becoming increasingly difficult and the big retailers keep winning and taking share. Think about the dominance of Amazon and Walmart, as well as Doordash and Uber in delivery. 

For staples, we see risks from improving private label offers, unlimited shelf space and low entry barriers online, advertising democratisation (driven by smaller demographic targeting you couldn’t do in the halcyon days of TV), and finally from a focus on healthy eating which, combined with GLP1 adoption, has resulted in food and drink category volume issues. Against those headwinds, the stories in these sectors need to be highly idiosyncratic.

Which positions have contributed most to recent portfolio performance?

Given the eclectic nature of the portfolio, contributors over the first quarter were diverse. Portfolio performance was positively driven by positioning in Brazil, Western Europe (Netherlands and Germany) and the US (US & Canada), with 6/11 GICS sectors contributing positively, with 10/11 GICS sectors contributing positively since inception in 2022. 

Over the March quarter, positive contributors included Brookdale Senior Living (covered above) and vertically integrated travel management company Navan (also covered above), however the most notable contributor to performance over the quarter was offshore drilling operator Valaris (NYSE: VAL) which surged after Transocean announced a US$5.8bn all-stock acquisition of the company, offering shareholders a ~31.6 % premium and creating the world’s largest offshore drilling contractor with a significantly expanded fleet and backlog. 

The deal reinforced expectations of stronger pricing power and industry consolidation as offshore drilling demand improves. We believe the industry outlook is excellent and that the world will be short of deepwater drill rigs by 2028 as shale basin growth slows and buyers look to diversify sources of oil away from the Middle East. We plan to continue to hold the position post-merger.

What are the themes and trends dominating discussions at Antipodes right now?

We see three global event risks where the market may be getting too complacent, each continues to shape portfolio positioning.

• First, protraction and/or regional escalation of the Iran conflict and Strait of Hormuz disruption. A sustained closure would create simultaneous supply shocks across energy, chemicals and agriculture where inventories are already lean.
• Second, private credit contagion. Rapid growth to over US1.7 trillion has occurred alongside loose underwriting, and refinancing walls are approaching while base rates remain elevated. Mark-to-market losses would hit companies reliant on credit and capital markets hardest, reinforcing our preference for self-funded businesses with strong balance sheets.
• Lastly, AI workforce displacement. The shift from conversational AI to agentic systems capable of executing real tasks is accelerating faster than the market appreciates. This creates downside risk for employment-sensitive consumer businesses and upside for companies enabling or benefiting from agentic deployment.

As such, we’ve recently rotated the portfolio with the aim of enhancing the expected return, and lowering the risk profile of the strategy, including:

• Continuing to look favourably on defensive assets. The portfolio is nearly 40% exposed to what we see as firmly defensive industries to protect capital against bullish market expectations and create room to deploy capital into faster-growing or cyclically attractive areas on any market pullbacks.
• Broadly moving towards tangible assets. The combined weight of materials, energy, infrastructure and real estate is also approaching 40% of exposure, providing a mix of macro cyclicality and defensiveness, but importantly, broader protection from AI-driven industry change and still high expected returns.
• Leaning into software and software-like consumer companies, we see as agentic winners; companies including Chime Financial (NASDAQ: CHYM), Roku (NASDAQ: ROKU), Instacart and Didi (OTCMKTS: DIDIY), as well as the software names mentioned above.

We continue to be willing to lean into what we view as parts of the market oversold for the wrong reasons, where we see pragmatic value in good stories.

It’s our process to be contrarian in situations where we have a reasonable degree of confidence that we are right. That mindset, backed by industry research, has driven fund returns to date.

Managed Fund

Antipodes Global SMID Fund

Global Shares

View