In the third quarter of 2025, Curreen Capital achieved a notable 9% increase in its fund's value, a testament to its agile investment approach. This period saw significant portfolio restructuring, including the divestment from Enhabit in response to escalating industry headwinds. The proceeds from this sale were strategically reallocated across several promising companies: Computacenter, Fortrea, VF Corp, and 4imprint, alongside a smaller investment in 4imprint. Further into the quarter, Curreen Capital trimmed its stake in Credit Acceptance to bolster positions in Kontoor, Thinkific, Pluxee, and GetBusy. These moves underscore the firm's commitment to continuously optimizing its portfolio for growth and resilience in a dynamic market environment.
Curreen Capital's decision to exit Enhabit was primarily influenced by increasing difficulties within the home healthcare sector. Concerns grew following a proposal from the Centers for Medicare and Medicaid Services (CMS) to implement more aggressive cuts to Medicare home health reimbursement rates. Given that Medicare represents Enhabit's most lucrative client, this unexpected and deeper reduction in rates led to a reassessment of the company's valuation. Despite Enhabit's adept navigation of past challenges and the robust performance of its Hospice division, the heightened and more severe industry pressures prompted Curreen Capital to seek more favorable investment opportunities. The firm noted that while demand for home health services is projected to rise with an aging population, securing adequate payment rates from CMS and other insurers to support profitable expansion now appears considerably more difficult than previously anticipated. Thus, the capital was redeployed into other companies perceived to have stronger growth prospects and more stable operating environments.
The shift in investment strategy also involved a significant move into Kontoor, a company Curreen Capital had previously held in its portfolio. Kontoor, which was spun off from VF Corp in 2019, encompasses the well-known denim brands Wrangler and Lee. Historically, Kontoor has operated as a robust cash-generating entity, consistently returning value to shareholders through dividends and share repurchases, albeit with stagnant revenue growth that had not surpassed its 2007 levels. A pivotal change occurred earlier in the year with Kontoor's acquisition of Helly Hansen, a prominent brand in the outdoor and workwear segments. This acquisition, finalized in July, signaled a new strategic direction for Kontoor. Curreen Capital interpreted this as Kontoor adopting a strategy reminiscent of VF Corp's historical approach: acquiring strong brands, effectively managing them, reducing debt, and repeating the process to drive growth. The addition of growth potential to a financially sound, but previously static, business model made Kontoor a more attractive investment. Curreen Capital acquired its stake in Kontoor at $72.54 per share.
In addition to these major adjustments, Curreen Capital made several smaller, targeted investments. A new, modest position was established in Thinkific, a Canadian enterprise specializing in helping clients develop and monetize online courses. Thinkific, led by one of its founders, is currently undergoing a strategic pivot to focus on larger, higher lifetime-value customers, leading to a reduction in its total customer count. Despite this, management has successfully sustained revenue growth and improved cash flow, demonstrating effective adaptation to its new strategy. Curreen Capital viewed the purchase price of C$1.87 per share as an excellent value for a well-managed business with promising long-term growth potential. Furthermore, the fund augmented its holdings in Pluxee and GetBusy. GetBusy, already the largest holding in the fund, saw additional investment at £0.66 per share following management's projection of substantial acceleration in its SmartVault division, reinforced by personal stock purchases from its CFO, CEO, and a director. The position in Pluxee was increased when its shares became particularly attractive, purchased at €14.65 per share.
These strategic reallocations were primarily financed by a reduction in Curreen Capital's stake in Credit Acceptance. While Credit Acceptance remains a sound business, actively engaged in share buybacks, its growth trajectory and profitability have moderated in recent years. Faced with the choice of deploying capital into opportunities perceived as having greater upside, Curreen Capital opted to decrease its exposure to Credit Acceptance, prioritizing investments in Kontoor, GetBusy, Thinkific, and Pluxee. The firm continues to hold shares in Credit Acceptance, but the strategic decision reflected a preference for newer, more dynamic growth avenues within the portfolio.