UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-21897
Manager Directed Portfolios
(Exact name of registrant as specified in charter)
615 East Michigan Street Milwaukee, WI 53202
(Address of principal executive offices) (Zip code)
Scott M. Ostrowski, President
Manager Directed Portfolios
c/o U.S. Bank Global Fund Services
777 East Wisconsin Avenue, 6th Floor
Milwaukee, WI 53202
(Name and address of agent for service)
(414) 516-3087
Registrant’s telephone number, including area code
Date of fiscal year end: December 31, 2024
Date of reporting period: June 30, 2024
Item 1. Reports to Stockholders.
(a) |
Spyglass Growth Fund | ||
Institutional Shares | SPYGX | ||
Semi-Annual Shareholder Report | June 30, 2024 |
Class Name | Costs of a $10,000 investment | Costs paid as a percentage of a $10,000 investment |
Institutional Shares | $50 | 1.00% |
Net Assets | $716,984,268 |
Number of Holdings | 25 |
Portfolio Turnover Rate | 32% |
Top Sectors | (% of Net Assets) |
Information Technology | 27.9% |
Consumer Discretionary | 20.0% |
Health Care | 17.0% |
Financials | 13.7% |
Industrials | 13.4% |
Real Estate | 4.5% |
Communication Services | 2.8% |
Cash & Other | 0.7% |
Top 10 Holdings | (% of Net Assets) |
Ascendis Pharma AS | 6.6% |
Shift4 Payments, Inc. | 6.4% |
AppLovin Corp. | 6.3% |
Sweetgreen, Inc. | 5.5% |
APi Group Corp. | 4.8% |
Affirm Holdings, Inc. | 4.7% |
Procore Technologies, Inc. | 4.6% |
CoStar Group, Inc. | 4.5% |
DoorDash, Inc. | 4.4% |
Exact Sciences Corp. | 4.4% |
Spyglass Growth Fund | PAGE 1 | TSR-SAR-56170L703 |
(b) | Not applicable. |
Item 2. Code of Ethics.
Not applicable for semi-annual reports.
Item 3. Audit Committee Financial Expert.
Not applicable for semi-annual reports.
Item 4. Principal Accountant Fees and Services.
Not applicable for semi-annual reports.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Investments.
(a) | Schedule of Investments is included as part of the financial statements filed under Item 7 of this Form. |
(b) | Not applicable. |
Item 7. Financial Statements and Financial Highlights for Open-End Investment Companies.
(a) |
Shares | Value | |||||
COMMON STOCKS - 99.3% | ||||||
COMMUNICATION SERVICES - 2.8% | ||||||
Spotify Technology SA(a) | 64,286 | $20,172,304 | ||||
CONSUMER DiSCRETIONARY - 20.0% | ||||||
DoorDash, Inc. - Class A(a) | 292,671 | 31,836,751 | ||||
Five Below, Inc.(a) | 229,952 | 25,057,870 | ||||
Floor & Decor Holdings, Inc. - Class A(a) | 202,004 | 20,081,218 | ||||
Global-e Online Ltd.(a) | 736,637 | 26,717,824 | ||||
Sweetgreen, Inc. - Class A(a) | 1,307,695 | 39,413,927 | ||||
143,107,590 | ||||||
FINANCIALS - 13.7% | ||||||
Affirm Holdings, Inc.(a) | 1,118,983 | 33,804,476 | ||||
Kinsale Capital Group, Inc. | 46,749 | 18,011,455 | ||||
Shift4 Payments, Inc. - Class A(a) | 627,340 | 46,015,389 | ||||
97,831,320 | ||||||
HEALTH CARE - 17.0% | ||||||
Ascendis Pharma AS - ADR(a) | 345,383 | 47,103,333 | ||||
Exact Sciences Corp.(a) | 739,081 | 31,226,172 | ||||
Medpace Holdings, Inc.(a) | 57,008 | 23,478,745 | ||||
Veeva Systems, Inc. - Class A(a) | 109,720 | 20,079,857 | ||||
121,888,107 | ||||||
INDUSTRIALS - 13.4% | ||||||
ACV Auctions, Inc. - Class A(a) | 805,338 | 14,697,418 | ||||
API Group Corp.(a) | 916,271 | 34,479,278 | ||||
TransDigm Group, Inc. | 18,093 | 23,115,798 | ||||
WillScot Mobile Mini Holdings Corp.(a) | 637,953 | 24,012,551 | ||||
96,305,045 | ||||||
INFORMATION TECHNOLOGY - 27.9% | ||||||
AppLovin Corp. - Class A(a) | 546,629 | 45,490,465 | ||||
GoDaddy, Inc. - Class A(a) | 187,398 | 26,181,375 | ||||
HubSpot, Inc.(a) | 49,377 | 29,122,061 | ||||
MongoDB, Inc.(a) | 81,929 | 20,478,973 | ||||
Palo Alto Networks, Inc.(a) | 43,553 | 14,764,903 | ||||
Procore Technologies, Inc.(a) | 499,053 | 33,092,204 | ||||
Snowflake, Inc. - Class A(a) | 230,104 | 31,084,749 | ||||
200,214,730 | ||||||
1 |
Shares | Value | |||||
COMMON STOCKS - (Continued) | ||||||
REAL ESTATE - 4.5% | ||||||
CoStar Group, Inc.(a) | 438,577 | $32,516,099 | ||||
TOTAL COMMON STOCKS (Cost $568,968,431) | 712,035,195 | |||||
TOTAL INVESTMENTS - 99.3% (Cost $568,968,431) | 712,035,195 | |||||
Money Market Deposit Account - 0.8%(b) | 5,387,976 | |||||
Liabilities in Excess of Other Assets - (0.1)% | (438,903) | |||||
TOTAL NET ASSETS - 100.0% | $716,984,268 | |||||
(a) | Non-income producing security. |
(b) | The U.S. Bank Money Market Deposit Account (the “MMDA”) is a short-term vehicle in which the Fund holds cash balances. The MMDA will bear interest at a variable rate that is determined based on market conditions and is subject to change daily. The rate as of June 30, 2024 was 5.17%. |
2 |
Assets: | |||
Investments, at value (cost of $568,968,431) | $712,035,195 | ||
Cash | 5,387,977 | ||
Receivables: | |||
Fund shares sold | 195,118 | ||
Dividends and interest receivable | 12,341 | ||
Prepaid expenses | 19,716 | ||
Total assets | 717,650,347 | ||
Liabilities: | |||
Payables: | |||
Investment advisory fees | 529,950 | ||
Administration and fund accounting fees | 72,978 | ||
Fund shares redeemed | 17,250 | ||
Transfer agent fees and expenses | 17,209 | ||
Custody fees | 7,321 | ||
Compliance fees | 2,071 | ||
Other accrued expenses | 19,300 | ||
Total liabilities | 666,079 | ||
Net assets | $716,984,268 | ||
Net Assets Consist of: | |||
Paid in capital | $ 1,183,339,579 | ||
Total accumulated losses | (466,355,311) | ||
Net assets | $716,984,268 | ||
Institutional Shares: | |||
Net assets applicable to outstanding Institutional Shares | 716,984,268 | ||
Shares issued (Unlimited number of beneficial interest authorized, $0.01 par value) | 47,821,870 | ||
Net asset value, offering price and redemption price per share | $14.99 | ||
3 |
Investment income: | |||
Dividends | $8,152 | ||
Total investment income | 8,152 | ||
Expenses: | |||
Investment advisory fees (Note 4) | 3,789,909 | ||
Administration and fund accounting fees (Note 4) | 224,872 | ||
Transfer agent fees and expenses | 70,912 | ||
Custody fees | 26,184 | ||
Federal and state registration fees | 22,156 | ||
Legal fees | 15,360 | ||
Trustees’ fees and expenses | 14,438 | ||
Reports to shareholders | 8,652 | ||
Audit fees | 7,824 | ||
Compliance expense | 6,188 | ||
Other | 13,820 | ||
Total expenses before reimbursement from advisor | 4,200,315 | ||
Expense reimbursement from advisor (Note 4) | (410,406) | ||
Net expenses | 3,789,909 | ||
Net Investment Loss | (3,781,757) | ||
Realized and unrealized gain/(loss): | |||
Net realized gain on investments | 111,397,016 | ||
Net change in unrealized depreciation on investments | (84,788,231) | ||
Net realized and unrealized gain | 26,608,785 | ||
Net increase in net assets resulting from operations | $22,827,028 | ||
4 |
Six Months Ended June 30, 2024 (Unaudited) | Year Ended December 31, 2023 | |||||
Operations: | ||||||
Net investment loss | $ (3,781,757) | $ (4,579,610) | ||||
Net realized gain (loss) on investments | 111,397,016 | (107,099,017) | ||||
Net change in unrealized appreciation (depreciation) on investments | (84,788,231) | 408,144,978 | ||||
Net increase in net assets resulting from operations | 22,827,028 | 296,466,351 | ||||
Capital Share Transactions: | ||||||
Proceeds from shares sold | 75,337,085 | 84,319,092 | ||||
Cost of shares redeemed | (154,555,288) | (221,947,853) | ||||
Net decrease in net assets from capital share transactions | (79,218,203) | (137,628,761) | ||||
Total increase (decrease) in net assets | (56,391,175) | 158,837,590 | ||||
Net Assets: | ||||||
Beginning of period | 773,375,443 | 614,537,853 | ||||
End of period | $716,984,268 | $773,375,443 | ||||
Changes in Shares Outstanding: | ||||||
Shares sold | 4,873,257 | 7,530,411 | ||||
Shares redeemed | (10,225,662) | (19,494,939) | ||||
Net decrease in shares outstanding | (5,352,405) | (11,964,528) | ||||
5 |
Six Months Ended June 30, 2024 (Unaudited) | Year Ended December 31, | |||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||
Net asset value - beginning of period | $14.54 | $9.43 | $17.88 | $22.19 | $14.09 | $10.52 | ||||||||||||
Income from Investment Operations: | ||||||||||||||||||
Net investment loss1 | (0.08) | (0.08) | (0.10) | (0.22) | (0.17) | (0.10) | ||||||||||||
Net realized and unrealized gain (loss) on investments | 0.53 | 5.19 | (8.34) | (1.28) | 8.87 | 3.89 | ||||||||||||
Total from investment operations | 0.45 | 5.11 | (8.44) | (1.50) | 8.70 | 3.79 | ||||||||||||
Less Distributions: | ||||||||||||||||||
Dividends from net realized gains | — | — | (0.01) | (2.81) | (0.60) | (0.22) | ||||||||||||
Total distributions | — | — | (0.01) | (2.81) | (0.60) | (0.22) | ||||||||||||
Net asset value - end of period | $14.99 | $14.54 | $9.43 | $17.88 | $22.19 | $14.09 | ||||||||||||
Total return | 3.09% ^ | 54.19% | (47.23)% | (6.42)% | 61.82% | 36.03% | ||||||||||||
Ratios and Supplemental Data: | ||||||||||||||||||
Net assets, end of period (thousands) | $ 716,984 | $ 773,375 | $ 614,538 | $ 2,064,723 | $ 1,742,762 | $ 253,018 | ||||||||||||
Ratio of operating expenses to average net assets: | ||||||||||||||||||
Before reimbursements | 1.11% + | 1.13% | 1.09% | 1.05% | 1.09% | 1.21% | ||||||||||||
After reimbursements | 1.00% + | 1.00% | 1.00% | 1.00% | 1.00% | 1.00% | ||||||||||||
Ratio of net investment loss to average net assets: | ||||||||||||||||||
Before reimbursements | (1.11)% + | (0.80)% | (0.85)% | (1.00)% | (1.04)% | (0.97)% | ||||||||||||
After reimbursements | (1.00)% + | (0.67)% | (0.76)% | (0.95)% | (0.95)% | (0.76)% | ||||||||||||
Portfolio turnover rate | 32% ^ | 63% | 54% | 51% | 38% | 39% | ||||||||||||
+ | Annualized. |
^ | Not Annualized. |
1 | The net investment loss per share was calculated using the average shares outstanding method. |
6 |
A. | Security Valuation: All investments in securities are recorded at their estimated fair value, as described in Note 3. |
B. | Federal Income Taxes: It is the Fund’s policy to comply with the requirements of Subchapter M of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its taxable income to its shareholders. Therefore, no federal income or excise tax provisions are required. |
C. | Securities Transactions, Income and Distributions: Securities transactions are accounted for on the trade date. Realized gains and losses on securities sold are determined on the basis of identified cost. Interest income is recorded on an accrual basis. Dividend income and distributions to shareholders are recorded on the ex-dividend date. Withholding taxes on foreign dividends have been provided for in accordance with the Fund’s understanding of the applicable country’s tax rules and rates. |
7 |
D. | Use of Estimates: The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets during the reporting period. Actual results could differ from those estimates. |
E. | Reclassification of Capital Accounts: GAAP requires that certain components of net assets relating to permanent differences be reclassified between financial and tax reporting. These reclassifications have no effect on net assets or net asset value per share. |
F. | Events Subsequent to the Fiscal Period End: In preparing the financial statements as of June 30, 2024 and through the date the financial statements were available to be issued, management considered the impact of subsequent events for potential recognition or disclosure in the financial statements and had concluded that no additional disclosures are necessary. |
8 |
Level 1 | Level 2 | Level 3 | Total | |||||||||
Investments | ||||||||||||
Common Stocks* | $712,035,195 | $ — | $ — | $712,035,195 | ||||||||
Total Investments | $712,035,195 | $— | $— | $712,035,195 | ||||||||
* | Refer to the Schedule of Investments for industry classifications. |
Spyglass Growth Fund Institutional Shares | 1.00% | ||
9 |
Amount | Expiration | ||
$1,213,828 | 12/31/2024 | ||
1,050,279 | 12/31/2025 | ||
858,277 | 12/31/2026 | ||
410,406 | 12/31/2027 | ||
Administration & fund accounting | $224,872 | ||
Custody | $ 26,184 | ||
Transfer agency | $70,912 | ||
Compliance | $6,188 | ||
Administration & fund accounting | $72,978 | ||
Custody | $7,321 | ||
Transfer agency | $17,209 | ||
Compliance | $2,071 | ||
Purchases | Sales | |||||
Spyglass Growth Fund | $239,646,333 | $329,222,303 | ||||
10 |
Cost of investments(a) | $593,455,070 | ||
Gross unrealized appreciation | $240,956,862 | ||
Gross unrealized depreciation | (59,409,553) | ||
Net unrealized appreciation | 181,547,309 | ||
Undistributed ordinary income | — | ||
Undistributed long-term capital gain | — | ||
Total distributable earnings | — | ||
Other accumulated losses | (670,729,648) | ||
Total accumulated losses | $(489,182,339) | ||
(a) | The difference between the book basis and tax basis net unrealized depreciation and cost is attributable primarily to wash sales. |
Fiscal Year Ended December 31, | ||||||
2023 | 2022 | |||||
Ordinary income | $ — | $385,085 | ||||
Long-term capital gains | — | — | ||||
Total | $— | $385,085 | ||||
Total Accumulated Earnings/Loss | Paid-In Capital | |||||
Spyglass Growth Fund | $4,579,610 | $(4,579,610) | ||||
11 |
12 |
(b) | Financial Highlights are included within the financial statements filed under Item 7 of this Form. |
Item 8. Changes in and Disagreements with Accountants for Open-End Investment Companies.
There were no changes in or disagreements with accountants during the period covered by this report.
Item 9. Proxy Disclosures for Open-End Investment Companies.
There were no matters submitted to a vote of shareholders during the period covered by this report.
Item 10. Remuneration Paid to Directors, Officers, and Others of Open-End Investment Companies.
See Statement of Operations within Item 7(a).
Item 11. Statement Regarding Basis for Approval of Investment Advisory Contract.
Not applicable.
Item 12. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable to open-end investment companies.
Item 13. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable to open-end investment companies.
Item 14. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable to open-end investment companies.
Item 15. Submission of Matters to a Vote of Security Holders.
There have been no material changes to the procedures by which shareholders may recommend nominees to the registrant’s board of trustees.
Item 16. Controls and Procedures.
(a) | The Registrant’s President/Principal Executive Officer and Treasurer/Principal Financial Officer have reviewed the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”)) as of a date within 90 days of the filing of this report, as required by Rule 30a-3(b) under the Act and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934. Based on their review, such officers have concluded that the disclosure controls and procedures are effective in ensuring that information required to be disclosed in this report is appropriately recorded, processed, summarized and reported and made known to them by others within the Registrant and by the Registrant’s service providers. |
(b) | There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting. |
Item 17. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies
Not applicable to open-end investment companies.
Item 18. Recovery of Erroneously Awarded Compensation.
Not applicable.
Item 19. Exhibits.
(a) | (1) Any code of ethics or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy Item 2 requirements through filing an exhibit. Not applicable. |
(2) Any policy required by the listing standards adopted pursuant to Rule 10D-1 under the Exchange Act (17 CFR 240.10D-1) by the registered national securities exchange or registered national securities association upon which the registrant’s securities are listed. Not applicable.
(4) Any written solicitation to purchase securities under Rule 23c-1 under the Act sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons. Not applicable.
(5) | Change in the registrant’s independent public accountant. Not applicable. |
(b) | Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Furnished herewith. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) | Manager Directed Portfolios |
By (Signature and Title)* | /s/ Scott M. Ostrowski, | ||
Scott M. Ostrowski, President/ | |||
Principal Executive Officer |
Date | September 3, 2024 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By (Signature and Title)* | /s/ Scott M. Ostrowski, | ||
Scott M. Ostrowski, President/ | |||
Principal Executive Officer |
Date | September 3, 2024 |
By (Signature and Title)* | /s/ Ryan Frank, | ||
Ryan Frank, Treasurer/ | |||
Principal Financial Officer |
Date | September 3, 2024 |
* Print the name and title of each signing officer under his or her signature.