Strategic Divestment: Adapting to Market Shifts for Future Growth
Bristol Gate's US Equity Strategy: Q3 2025 Performance Overview
In the third quarter of 2025, Bristol Gate Capital Partners' US Equity Strategy faced challenges, underperforming against its benchmark, the S&P 500\u00ae Total Return Index. This underperformance was primarily attributed to the strategy's limited exposure to the high-growth AI/TMT sector and the Value sector, which benefited from the Federal Reserve's interest rate adjustments. Despite these hurdles, the portfolio demonstrated robust underlying fundamentals, achieving a 15% dividend growth over the preceding twelve months. This growth underscores the strategy's focus on companies with strong dividend-paying capabilities, even amidst broader market fluctuations.
Marsh & McLennan Companies, Inc. (MMC): An Investment Profile
Marsh & McLennan Companies, Inc. (MMC) is a prominent professional services firm renowned for its advisory services and comprehensive insurance solutions. As of December 30, 2025, MMC's stock closed at $187.36 per share, commanding a market capitalization of $92.111 billion. Over the last 52 weeks, the company's shares experienced an 11.79% decline in value, though it registered a 2.18% gain in the month leading up to the third-quarter report. These figures highlight the recent volatility and performance challenges faced by MMC in the market.
Reasons Behind Exiting Marsh & McLennan (MMC)
Bristol Gate US Equity Strategy elucidated its rationale for divesting Marsh & McLennan (MMC) shares in its Q3 2025 investor letter. The decision was primarily driven by recent market dynamics affecting both MMC's insurance brokerage and consulting segments. A notable factor was the continued decline in global commercial insurance rates into the third quarter, which is anticipated to create a near-term headwind for brokerage revenues and cash flows. Additionally, the uncertain macroeconomic environment is expected to curb corporate discretionary spending, thereby slowing down MMC's consulting-related businesses. These combined factors led Bristol Gate to foresee slower dividend growth for MMC in the near future, prompting the strategic exit.
Reallocating Capital: Seeking New Opportunities
Post-quarter end, Bristol Gate Capital Partners initiated a new position in Amphenol (APH) following the divestment of Marsh & McLennan (MMC). The firm is actively seeking investment opportunities that offer greater upside potential and mitigated downside risk. Their current focus includes identifying undervalued AI stocks that are well-positioned to benefit from prevailing economic trends, such as Trump-era tariffs and the onshoring movement. This strategic reallocation demonstrates Bristol Gate's proactive approach to optimizing its portfolio in response to market signals and future growth prospects.