William Blair Small-Mid Cap Growth Fund on Bentley Systems
Thesis
Bentley Systems provides engineering software for end-to-end infrastructure construction and delivered a broad-based quarterly beat while maintaining guidance. Demand from resources and utilities customers is being supported by investment in data centers and power generation. The stock de-rated on industry-wide fears that AI could disrupt software, even though Bentley is adding generative AI capabilities to enhance its own products. The fund added to the position because it believes AI can create high-margin monetization opportunities that expand revenue growth, cash flow and the company's competitive moat.
“We added to our position as the risk/reward opportunity in the stock became more attractive in the quarter.”
Key risks
- AI disruption risk for software business models
- Financial impact of new AI capabilities remains opaque