The following illustration summarizes the most important terms of the investment philosophy and shows which aspects characterize our investments. Further information can be found in our Owner's Manual "Investing With Insight" and in our book "Investing in Value Creators".
REQ Global Compounders The companies selected in REQ Global Compounders have been carefully chosen according to the principles described above. We invest in great capital allocators, decentralized organizations, and management teams with skin in the game and who act like owners. These three principles are powerful sources of long-term returns. Investing is a reductionist art, and those who can boil things down to the basics will generate strong long-term returns. Great companies are the ones you like more the longer you own them. For us, it's a short list of companies, and you'll find them in the fund. The table b elow is a visualization of the top 10 companies of REQ Global Compounders.
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Capital allocation is at the core of their strategy. There is a common theme in how our companies allocate their capital. They primarily use free cash flow to consolidate industries and buy small private companies. That's their skillset and something they've practiced for many years. They have a huge network of relationships with private sellers and tend to buy multiple small private companies every year. We think the leaders of our companies are excellent investors. The return on Capital Employed (ROCE) is high and because our companies reinvest large amounts of free cash flow each 20
