Merchant West Sanlam Collective Investments Dividend Equity Fund on Broadridge Financial Solutions
Thesis
Merchant West rotated from Paychex into Broadridge because it sees a materially more durable competitive moat. Broadridge processes more than 80% of US shares outstanding held in street name for proxy materials and investor communications, supported by long-dated broker-dealer contracts where switching carries substantial regulatory and operational costs. The fund believes this regulatory entrenchment is more durable than a technology-based moat and should support long-term compounding. P(1) Merchant West SCI Dividend… SEC
“We view Broadridge's structurally entrenched position, emanating more from regulatory barriers than technology factors, as the more durable compounder”