Broad Run Focus Equity Composite letter to investors for the first quarter ended March 31, 2016.

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For the quarter, the Broad Run Focus Equity Composite returned 2.1% net of fees1 compared to 1.0% for the Russell 3000 Index. The results for your account will differ somewhat from the Composite due to variations in account holdings and other client-specific circumstances. Your account’s actual results are presented in an attachment. We remind you that we manage your account for long-term results, so we encourage you to evaluate its performance over a multi-year time frame. Long-term Composite performance is presented at the end of this letter.

Broad Run Focus Equity Composite

Broad Run Focus Equity Composite - The "Watch List"

As you know, in your portfolio we seek to own a small collection of exceptional businesses at attractive valuations, and to hold these businesses long-term allowing their growth in earnings to drive most of your investment results. It is challenging to identify businesses that meet our high hurdle for earnings growth, and rare to find them at appealing valuations. Fortunately, our concentrated and long-term oriented investment approach does not require frequent activity; on average we only need to add a few new investments each year.

A key tool in our search for these new investments is our “watch list.” This is our shopping list of exceptional businesses that we would like to own if valuation and/or other circumstances allowed. This list reflects our collective knowledge after more than a decade of scouring the markets and conducting research to identify businesses that meet our five criteria (high-quality business, large growth opportunity, excellent management, low “tail risk,” and discount valuation).

Some businesses have been on the watch list for just a few months, while others have been there for many years. We are continually looking to add to and refine this list, while advancing our understanding of these businesses and the industries in which they operate. Over the course of time, some development will typically occur at a watch list business spurring a fresh look and intensified consideration for its inclusion in the portfolio; perhaps the stock overacts to negative short-term news, there is a favorable industry development, or our own synthesis of information leads to a breakthrough insight. If we had not previously studied these businesses and been monitoring them, we would not be well positioned to notice the particular catalyst, nor able to intensify our research and reach an investment conclusion in as timely a manner.

During the first quarter, we established a new position in AMETEK, Inc. at a 1% initial weighting. AMETEK makes a wide variety of specialized electrical and mechanical instruments for industrial applications. AMETEK compounded earnings per share at close to 16% per annum over the last 10 years by acquiring leading niche instruments businesses and dramatically improving them using a variety of management tools (low cost sourcing, value engineering, lean manufacturing, etc.). The same people that executed this business plan in the past remain largely in place today, and we believe there is sufficient runway to continue executing this acquisition model for at least the next decade.

AMETEK is an idea from our watch list. We first studied AMETEK in early 2015 while making a systematic review of acquisition-oriented industrial conglomerates. AMETEK stood out from its peers for a variety of reasons so we advanced our work and added it to our watch list in the second quarter of 2015. At the time we liked the business but were concerned that falling oil prices, weakening emerging markets, and the strengthening U.S. dollar were not sufficiently reflected in consensus earnings expectations. By the first quarter of 2016, after revenue and earnings guidance were reset lower several times, we thought expectations more accurately reflected the macroeconomic challenges. Our continued research had advanced our understanding and appreciation of the business, so we initiated a small position. Over time, should our ongoing research reinforce our investment thesis, we will look to add to the position opportunistically.

Conclusion

We thank you for entrusting your capital to us. We will continue to do our best to protect and grow your investment over time.

Please let us know if there is any change to your financial circumstances that might impact how we manage your account. Additionally, please share any updates that may be necessary to keep our records current.

Sincerely,

Broad Run Investment Management, LLC