William Blair Small-Mid Cap Core Fund on Garrett Motion
Thesis
Garrett Motion designs turbochargers for gas and diesel engines and is benefiting from stronger-than-expected durability in hybrid and internal combustion vehicle demand. Commercial vehicle and industrial results were supported by growth across regions and strong aftermarket demand. Management raised its full-year outlook and continued share repurchases, reinforcing the operating momentum. The fund reduced the position after a strong re-rating, indicating that the fundamental thesis remains intact but the risk/reward has become less compelling.
“demand for hybrid and internal combustion engine (ICE) vehicles proved more durable than what had previously been priced into the stock”
Key risks
- Strong stock re-rating reduced risk/reward attractiveness