Best Global Ideas by REQCapital

REQ Global Compounders Our Best Global Ideas

January 2022

REQ Global Compounders Our Best Global Ideas investors over the coming years. When investing in an equity fund you buy a collection of companies. Before investing you should spend time reading our Investor Manual. The Manual explains our investment philosophy. We want to attract clients who understand our way of thinking and who will join us on a longterm investment journey. The implementation of our investment philosophy can be found in this document – our “Best Global Ideas”. In this document we present the best investments we are able to find with our philosophy and a global investor mindset. All of these companies are part of REQ Global Compounders. These companies will create a lot of value for us as

These investments share many of the same characteristics. We seek to invest in strong capital allocators who organize their companies in a decentralized way to capture entrepreneurial energy. The managers are of the highest integrity. We trust the people running the businesses and sleep very good at night as a part owners. After reading our “Best Global Ideas” our aim is that you feel the same kind of conviction as us regarding the investments. We are confident these companies will expand and grow in a profitable way for many years and turn out to be good longterm investments.

Constellation Software ............................................................................................................................ 5 Halma ...................................................................................................................................................... 6 Boyd Group Services................................................................................................................................ 7 IMCD ........................................................................................................................................................ 8 Enghouse Systems ................................................................................................................................... 9 Heico ...................................................................................................................................................... 10 Topicus .................................................................................................................................................. 11 Lifco ....................................................................................................................................................... 12 DCC ........................................................................................................................................................ 13 Diploma ................................................................................................................................................. 14 First Republic Bank ................................................................................................................................ 15 Accenture .............................................................................................................................................. 16 Atlas Copco ............................................................................................................................................ 17 Indutrade ............................................................................................................................................... 18 Judges Scientific..................................................................................................................................... 19 Kerry Group ........................................................................................................................................... 20 MTY Food Group ................................................................................................................................... 21 Vitec Software ....................................................................................................................................... 22 Roper Technologies ............................................................................................................................... 23 Dassault Systemes ................................................................................................................................. 24 SDI Group .............................................................................................................................................. 25 Addtech ................................................................................................................................................. 26 Lagercrantz ............................................................................................................................................ 27 Brown&Brown ....................................................................................................................................... 28 Idex ........................................................................................................................................................ 29 Nordson ................................................................................................................................................. 30 Kelly+Partners ....................................................................................................................................... 31

Constellation Software Constellation Software is a Canadian software conglomerate established in 1995 by the current CEO, Mark Leonard. The company adopts an acquisition-based strategy where it buys small software companies. These acquisitions operate with a high degree of autonomy. Constellation Software is effectively a private equity business with permanent capital, that happens to be owned in a public vehicle. Constellation Software owns a range of companies across several industries. These niche software providers are essential for customers and are very sticky products. Therefore, the majority of the company’s earnings is recurring in nature. We like the management’s mindset of long-term business orientation combined with a highly disciplined capital allocation policy. As an example the company offers software solutions for traffic control in cities, waste management software, software to libraries and bowling centres and booking platforms for golf clubs. About 50% of revenues is government software which is the stickiest of the sticky. CSU is more of a capital allocation vehicle than a software conglomerate. We have invested in Constellation based on what we view as a unique culture and a strong and diciplined approach to M&A. We regard growth opportunities as good and the continued M&A opportunities as promising. The company did 90 acquisitions in 2020 and the acquisition pace is very strong so far in 2021. We see an interesting chance that CSU could start investing in sectors outside of software. People in CSU is highly incentivsed. The Management group and the 6 top managers in total own 2bn USD in shares. There are more than 100 equity millionaires in the company. The years of tenure in the company of the CEO, CFO, COO and CIO is respectively 26, 18, 26 and 26 years.

Halma Halma is a holding company with a range of different end market exposures through more than 40 operating units. Some examples of products in the portfolio are sensor products spanning from elevator sensors to gas sensors to water treatment systems and surgical devices. Halma ticks all our boxes in terms of capital allocation, organization and management. The company deploys lots of cash into bolt-on M&A at high returns on capital. The organizational structure is flat with a clear focus on generating value for shareholders. We have met management several times and the culture is performance-oriented with detailed measurement of all the business units on a monthly basis. The company has an aim to double revenue and profit every five years. Through its very diverse business structure we think Halma has a lot of room to grow both organically and through acquisitions in the coming years.

Boyd Group Services Boyd is one of the largest collision repair centers in North America in terms of number of locations and sales. The company also has glass operations in 34 states in the US and is the second largest retail auto glass operator in the US. The company is a consolidator in a very fragmented market. In North America the market is about 40bn USD of which Boyd is among the top-3 players with 2bn USD revenue. The large collision repair operators benefit from standardized processes, integration of technology platforms and expense reduction through largescale supply chain management. The aim of the company is to double the size of the business in 2025, based on 2019 revenues, which implies an average annual growth rate of 15%. Boyd ticks all the boxes in terms of capital allocation, organization and people. There are almost 32 000 collision repair shops in the US of which 70% are single shops. Car insurance companies prefer large collision repair centers benefiting Boyd. Boyd will continue to consolidate this industry for years to come and capital will be deployed in bolt-on acquisitions. Boyd uses cash flow to buy mostly family-owned independent businesses. Boyd is the only public company in the industry which gives it access to capital markets.

IMCD IMCD is a chemical distribution company located in the Netherlands. IMCD distributes specialty chemicals and food ingredients. The CEO Piet van der Slikke and CFO Hans Hooijmans have been with the company for 25 years and together own about 5% of the company. They run IMCD as if it was a private business with an exceptional long-term view. IMCD ticks all the boxes in terms of capital allocation, organization and people. The company uses cash flow to do small bolt-on acquisitions with high returns on capital. They organize in a decentralized fashion. IMCD does not guide the market on short term earnings expectations. The specialty chemical distribution market is highly fragmented. The company sources products from 1800 suppliers and sell products to 32 000 customers in more than 40 markets. The company is benefiting from a strong outsourcing trend among chemical producers globally. Hence, the inorganic growth opportunities are significant since there is much room for consolidation in the years to come.

Enghouse Systems Enghouse System is a Canada-based provider of software and services to a variety of distinct vertical markets. CEO Stephen Sadler is the father of Canadian M&A software models which was the inspiration for Mark Leonard in Constellation Software. The main part of Enghouse’s business is software to call centers across the world where the company has more than 4 000 customers ranging from simple phone support helpdesks to sophisticated multi-channel call centers. The vertical niches in which Enghouse operates have more than 90% customer retention rates. CEO Stephen Sadler owns 14% of the company and is very hands-on in the M&A-process where the objective is for a cash payback within 5-6 years. The company is in a net cash position and runs a negative working capital business. Cash flow is strong and since Enghouse is a small company in a very fragmented market we view growth opportunities as strong.

Heico Heico is an industrial conglomerate which ticks all the boxes in terms of capital allocation, organization and people. Heico is the Berkshire Hathaway of aviation – delivering highly engineered and complex products to aviation-, space and medical industries. A core skill of Heico management is M&A. The company has acquired 82 companies since 1990. The company has compounded net income with 18% CAGR since 1990 which is similar to the total return CAGR in the same timespan. The organization is decentralized which keeps an entrepreneurial culture in the company. The Henderson family owns 13% of the company and other employees own 10%. There is no succession risk since the two sons of the founder and CEO Larry Mendelson (82) are heavily involved in the business as directors. The family runs the company as a private company and makes long-term decisions that benefit all shareholders. More than 50% of sales is after-market sales. Heico is the global market leader in its niches with only 2% market share. Therefore, there is lots of room to grow over the coming years both organically and through M&A.

Topicus Topicus was spun out of Constellation Software and listed in 2021. We look at the company as a “2012 Vintage” of Constellation Software and is about 10% of the size of its mother company. The company is a vertical market software company with more than 100 000 customers in 13 countries with a proven track record of solid growth. Topicus serves customers in more than 40 different vertical markets. The company builds, acquires and manages industry specific software businesses. Topicus has nimble and agile business units that are close to the clients end markets. They provide a full range of software products. As an example the company offers software for training and talent management, IT solutions to the insurance and pension sector and a full range of applications, products and services that help wholesale and retail organizations maximize efficiency. As an example, 75% of primary schools in the Netherlands use the “ParnaSys” software from Topicus. Topicus is new to investors and we think it has a long runway of growth over the coming years. The company is listed in Canada but has most of their operations in Europe. The opportunities to consolidate various vertical software markets in Europe is even better than in the US. European vertical software markets are more fragmented with a higher degree of family-owned businesses. Constellation Software owns 30% of the capital and 50,1% of the votes. About 30% of the shares are free float. Topicus listed in February 2021 on the Toronto Stock Exchange.

Lifco Lifco is a Swedish investment company owned by the well-known industrialist Carl Bennet. Lifco ticks all the boxes in terms of capital allocation, organization and people/ownership/culture. The company is a serial acquirer and the CEO Pär Waldemarson runs the business in a decentralized fashion where lots of entrepeneural energy is released. The company owns a range of businesses in many different sectors. In other words, Lifco is one stock but in many ways a fund in itself with exposure to lots of different geographies, sectors, products and customers. The very diversified business model reduces company specific risk. Managers in Lifco are incentivized to create value by pursuing growth opportunities with high return on capital. The managers treat the business as their own and top management spends little time on the analyst community and investors – a priority we like. We like the combination of strong organic growth, lots of small bolt-on acquisitions and growth at high return on capital.

DCC DCC is a decentralized distribution company operating in a variety of sectors spanning LPGproducts, technology and health care. The company has a strong history of growth through acquisitions while maintaining a high return on capital. DCC has over the years been a consolidator of very fragmented markets. Management has a very good track record of growing the business, while keeping a strong balance sheet and distributing cash to shareholders. The company has a decentralized structure and there are significant incentives to grow the business with strict focus on return on capital. DCC owns more than 300 underlying companies. Over the last 5 years the stock has derated significantly due to a bearish “energy transition-related narrative” which we think is excessive since the company on many fronts are a positive contributor to more sustainable transport fuels in its Energy division. We have met management on several occasions over the years. Management is down to earth, conservative, pragmatic and runs the business like a private business. We are impressed by the capital allocation skills of the management group. They are owners, and act like owners. We expect DCC to continue to consolidate its end markets through many bolt-on acquisitions. We expect strong growth and value creation in the years to come.

Diploma Diploma is a specialized distributor operating in three different segments; Healthcare, seals and controls. A key to the business model is distribution of consumable products, short leadtimes to customers and being part of its customers’ operating budgets rather than capital budgets. Diploma ticks all the boxes in terms of capital allocation, organization and people. The business is diversified across products, customers and geographies. Over the last few years the company has been through a successful management change. We continue to observe lots of bolt-on acquisitions which is central to our investment thesis. Diploma is one of the smallest companies in the fund without much coverage from the sell side community. Diploma can still move the needle buying businesses sub £5m in EBIT. Diploma runs a very diversified and decentralized business model with strong margins, cash generation and return on capital. Diploma has a long runway of growth. We think investors and analysts underestimate the long term impact from value creating acquisitions in the years to come.

First Republic Bank We do not view First Republic Bank as a bank in the traditional sense. It is a customer-oriented service organization. It is a private banker focusing on high net-worth individuals. It is a fascinating and unique case study as a compounder in the US banking sector. First Republic has a unique business model that differentiates it from other banks. The bank has an entrepreneurial culture where the relationship manager owns the relationship to the customer and is compensated like an owner of the business. Relationship managers share the downside and therefore stay very conservative in their lending practices. Consequently, loan-to-value and loan losses are very low. FRC’s 2% annual customer attrition rate is 75% lower than the 8% banking industry average. The bank trades at a premium valuation which is justified based on the superior track record of value creation. The bank taps the market for equity opportunistically and often far ahead of growth needs. The company’s consumer satisfaction score is far ahead of other banks and in the same league as consumer companies like Apple and Nike. Strong referrals from existing customers drive growth for First Republic Bank. James Herbert founded the bank in 1985 and is still part of the management team.

Accenture We have invested in Accenture due to its performance-based culture combined with an acquisition-driven model and strong position in an ever-increasing digital economy. Technological change is positive for one of the world’s leading IT service companies. The company operates in the intersection of strategy and technology. Accenture has a very flexible business model which makes the company able to adjust capacity and costs in a weak economy. Accenture’s global capabilities is a competitive advantage. 92 out of the 100 largest clients have stayed with the company over the last 10 years. Accenture delivers stable growth and very high return on capital due to its capital light business model. Our research shows a unique corporate culture based on meritocracy and proud employees. It is a performance-based culture with strong opportunities to grow for those who deliver extraordinary performance.

Atlas Copco Atlas Copco is a Swedish industrial company with world-leading positions in compressors and air treatment systems. After the spin-off of Epiroc in 2017, Atlas Copco has become a market-leading company in its niches of compressors, vacuum solutions and generators. We like the strong market position of Atlas Copco and its ability to acquire and build strong niches in areas where it can use its expertise in compressed air. It has over the years done lots of value enhancing acquisitions. The main part of the business is the compressor technique business area where it turns industrial ideas into compressed air solutions and industrial compressors. The business area has a global service network. Today almost half of group sales is service-related revenues. With return on capital employed of around 30%, value creation is strong. The company’s value creation agenda is mirrored in its mission of "achieving sustainable profitable growth"

Indutrade Indutrade consists of more than 200 independent subsidiaries in almost 30 countries. The foundation of the Indutrade business model is to acquire many small companies with strong positions in narrow niches. These companies are normally family-owned. Indutrade provides engineering equipment and industrial components and sells its products primarily to customers in Northern Europe. We find a lot of value in the decentralized business model. It sells a range of products to many customers in a lot of different markets. Indutrade ticks all the boxes in terms of capital allocation, organization and people. In terms of capital allocation, Indutrade uses free cash flow to buy small family-run businesses. The organizational structure is decentralized and there is a lot of benchmarking on a monthly basis among the companies. We believe Indutrade will continue its growth path through a combination of acquisitions and organic growth.

Judges Scientific Judges Scientific is a small company listed on the AIM-market in London. It is still owned 12% by David Sicurel who founded the company in 2005. The company ticks all the boxes in terms of capital allocation, organization and people. The company deploys most of free cash flow to acquire small manufacturers of scientific instruments. These scientific instruments are primarily used in laboratory facilities at universities and in research departments at major customers like L’Oreal. The company has since its very beginning been able to deploy capital in a very efficient manner through acquisitions of family-owned companies. Since 2005 it has acquired 19 companies. The market in which Judges operates is fragmented with over 2 000 potential acquisition candidates. Judges pays 3-6 times EBIT according to size of the targets. The company is organized in a decentralized way and management is down to earth and pragmatic. Approximately 40% of employees are shareholders. We have met management several times. David Sicurel is an “outsider” manager with a great investment track record. Judges has lots of room to grow over the coming years. The company has been able to hire very senior people from organizations like Halma which is another very successful “buy-and-build”-model that we own in the fund. Judges is still a small company and has a multi-decade horizon until they run into very competitive bidding scenarios.

Kerry Group Kerry is an Irish company with more than 95% of revenues outside of Ireland. Kerry has a global market leading position in ingredients and flavours – two segments of the food,- and beverage industries with good growth prospects. Consumers are becoming more aware of the unhealthy effects of sugar, fat and salt. The food scientists at Kerry have the expertise to help food,- and beverage companies develop new product categories with less sugar, fat and salt without sacrificing taste. Kerry works with both small regional businesses but also global giants like Coca-Cola and Unilever. Kerry will enjoy a multi-year tailwind of good growth prospects in the years to come. Kerry has built a worldwide leadership position within the ingredients industry through strong organic growth and more than 150 acquisitions since 2000. It has a very diverse customer base with 15 000 customers in 140 countries. The long-term drivers of the business are shorter product cycles, health and wellness and more innovation-driven product development. The company’s strong market position and its collaboration model with customers make Kerry unique as a company and as an investment over the coming years.

MTY Food Group MTY Food Group is a North-American quick service restaurant group which is very well diversified across more than 70 brands. The company was founded by three Chinese immigrants in 1979 and the Chairman Stanley Ma still owns 23% of the company. MTY has a very strong record of capital allocation. In spite of doing a lot of acquisitions since 2008 the market share in Canada is still only 3%. MTY is organized as a franchise model with lots of autonomy for restaurant owners. As a franchisee you get the opportunity to run your own restaurant and enjoy the scale benefits of MTY as a group in terms of marketing and purchasing power. MTY has started a consolidation journey in the US where its market share is basically zero. The US market is highly fragmented with lots of room to grow. The company is run by entrepreneurs. We like the business model and acquisition strategy. Since there are lots of brands in MTY portfolio we view “menu-risk” and reputational risk as low.

Vitec Software Vitec is a market leader for Vertical Market Software in the Nordic region. The company grows through acquisitions. The products can be found in a variety of businesses and activities like pharmacies, car repair shops, real estate, health care, church operations, waste management and education. Since 1999 the company has bought more than 35 profitable and wellfunctioning companies. Vitec has a decentralized decision-making process in which the acquired entities remain independent business units of Vitec. The top-10 customers only constitute 7% of sales. Vitec covers a range of sectors and geographies spanning software for church activities in Norway to real estate agents in Sweden. The business model is based on a high percentage of recurring revenues and the software is delivered through a SaaS-model. Recurring revenue has increased from 59% ten years ago to 82% today. This provides stable and predictable cash flows. For customers this entails minimal investment costs and the long-term security of having quick access to upgrades and new functions. The companies that Vitec acquires are well-managed vertical software companies. The company is highly decentralized and conducts operations through 30 independent business units.

Roper Technologies Roper is an industrial conglomerate which over the years has transformed into a software conglomerate. We like the decentralized business model with lots of underlying operating companies and the outstanding capital allocation from top management. Roper owns 45 independent businesses with leadership positions in niche markets. Businesses remain independent after acquisition. The strategy is to own, operate and lead a portfolio of high-performing businesses for the long run. Roper is a highly diversified technology company that sells a lot of different software products to many different clients in a range of different markets. The leadership-positions are manifested in above 60% gross margins, negative working capital and powerful cash compounding. Cash flow is consistently stronger than net income due to its asset light nature and negative net working capital. The company uses excess free cash flow to grow through acquisitions. Roper has consistently generated more cash flow than earnings due to its asset light business model with low capex needs. Top management guides its portfolio companies on incentive structures and performance analysis.

Dassault Systemes Dassault is, in our view, one of the strongest software companies in Europe. The company develops “Product Lifecyle Management” software or computer-assisted design (CAD) for industrial applications. It is a very diversified company which sells a range of different products to lots of clients in many end markets. 90% of all global aircrafts and 80% of all global autos are made with Dassault Systemes software. A strong driver for Dassault is digitalization of industrial processes – for example the design of complex production systems. Dassault becomes part of the customer’s early-stage design process. The main product categories CATIA and SolidWorks are extremely sticky products. Applications of CATIA ranges from design of jet engines to entire ships. Dassault also supplies simulation software which makes it possible to test products ahead of the production process. The switching cost for customers is very high and almost 70% of revenues is recurring in nature. The Dassault family is the largest shareholder owning 40%. There are lots of room to enhance operating margins in the coming years by adopting cloudtechnology as most customers have not moved to the cloud yet. As more customers move to the cloud we expect margins to increase. Dassault is a family-owned company where the family owns 41% of the company.

SDI Group SDI is a buy and build model within the science and technology sectors and offers a good spread of niche technologies in diverse global markets. SDI designs and manufactures scientific products for use in applications including life sciences, healthcare, astronomy, consumer manufacturing and art conservation markets. Examples of products are control systems, sensors used in laboratories, digital imaging and highly sensitive cameras for life science and industrial applications. The company is investing in companies at the forefront of scientific and technological innovation. An important part of the group’s growth strategy is pursuing strategic complementary acquisitions. So far the company has done 13 acquisitions since launch. SDI grows through strategic acquisitions and has the reputation of allowing companies to operate autonomously. Consequently, companies across the group adapt quickly to changing market conditions. SDI does not aim for cost synergies across companies. The most important KPIs are Return on capital and cash generation. Mike Creedon as CEO has been instrumental in building SDI and remains important in the acquisition process. SDI Group is a small company and is only covered by two brokers and insiders have more than 5% stake in the company.

Addtech Addtech is a technical solutions group. The business consists of more than 130 independent companies that sell high-tech products and solutions to customers in the manufacturing and infrastructure sectors in more than 20 countries. Example of products offered by Addtech are industrial sensors; filters, joysticks, control systems, vision solutions and a range of other industrial technology solutions. Addtech has an entrepreneurial spirit and a smallscale approach to business. The company runs a highly decentralized business that combines the flexibility, efficiency and entrepreneurial spirit of small businesses with the resources, network and long-term perspective of a large corporation. Freedom with responsibility is the core principle that applies throughout the organisation. The independence of the subsidiaries is crucial in recruiting talented employees and entrepreneurs. Addtech does not micromanage its companies, and instead exercises active ownership through its Board of Directors. The parent company provides a range of tools that contribute to subsidiaries’ efficiency and profitability. These tools are available in areas such as law, accounting and finance, training, quality management and IT systems. Each company has considerable freedom in choosing customers and the route to market, but also bears considerable responsibility to meet ambitious expectations in terms of profit growth and profitability. The Tisenhult-gruppen through the Börjesson-family owns about 16% of the votes. The long term growth target of the company is 15% annual profit growth. Since listing in 2001 the company has overdelived on growth with 18% EPS CAGR since listing.

Lagercrantz Lagercrantz is a technology group consisting of 60 different companies. All these companies have a niche focus on a specific sub-market. The operations are conducted in a decentralized manner, and each subsidiary is followed-up in relation to clear objectives. The degree of independence is high where the management team of each subsidiary can work with considerable freedom and own responsibility. Critical decisions are made close to the customer. The company has over the years moved from being a “value added distributor” to a company with its own proprietary products. The technology products span solutions that meet the need for an increasingly electrified and connected society like sensors, security and surveillance products like alarms and fire protection. Lagercrantz is a “business-to-business” operation where M&A is core in the strategy. The company is increasing its capacity within M&A and we expect strong value creating growth both from M&A and organic in the coming years. Management Jörgen Wigh and other insiders own a total of about 7% of the shares. The Tisenhult-gruppen owns about 29% of the votes.

Brown&Brown Brown&Brown is a consolidator in the fragmented market of insurance brokers in the US. Since 1993 the company has bought 561 businesses and compounded earnings by 16,3% annually. In 2020 the company acquired 25 businesses. It runs a very efficient decentralized sales and service culture with a disciplined focus on acquiring businesses that fit culturally. Insurance policies tend not to be standard and a strong relationship to the customer is key. The business in general is very stable in economic downturns and renewal rates are low to mid 90%. In most cases Brown&Brown operates as an advisor and consultant for customers which makes the customer relationship sticky. The company is owned by the Brown family. Chairman J. Hyatt Brown owns 14,9% of the company. Since almost 60% of all employees are shareholders the total ownership by insiders is almost 25%. The vesting period for stock incentive grants is 7 years. Consequently, B&B is more focused on the long term rather than quarter-to-quarter results. 94% of employees say that B&B is a Great Place to Work®. The market opportunity for the company to continue to consolidate is promising. There are tens of thousands of small brokers in the US that are attractive acquisition opportunities for B&B over the coming years.

Idex Idex is a US-based multi-industrial company with 40 diverse businesses around the world. It is an acquisition-driven businesses model and manufactures pumps, flow meters and valves. It has a decentralized approach to business with lots of entrepreneurial energy. Idex ticks all the boxes in terms of capital allocation, organization and people. Management of Idex has managed to deploy capital at high returns over many years and has organized themselves in a decentralized fashion with accountability and close interaction with customers. Idex generates double digit earnings growth and strong cash flow with superior return on invested capital. It is an asset light business model which makes mission-critical applications of highly engineered products. The markets in which Idex competes are niche markets where the company is the #1 or #2 player, giving it a structural advantage and pricing power. Few companies reinvest like Idex. The company has over 2bn USD in capital it can deploy in M&A in the near future.

Nordson Nordson manufactures and sells adhesive dispensing equipment used by a range of different industries. For example, Nordson equipment is a natural part of the production lines of companies like Coca Cola where they use the equipment by Nordson to apply labels on the bottles. Nordson has carried through a lot of small bolton acquisitions over the years. The twin engines of both strong organic growth and acquisitions have created strong shareholder returns over the years. Cash conversion is very close to 100% which has contributed to increasing dividends every year for 56 years in a row. Nordson generates strong return on capital due to its asset light business model. More than 50% of sales comes from parts and consumables which is one of the reasons the company generates more than 50% gross margins. The company has strong growth prospects for its products in both the medical sector and electronic manufacturing sector. We have met Nordson many times over the last years and impressed by the culture and leadership of the company.

Kelly+Partners Kelly+Partners is a specialist chartered accounting network established in 2006 in Australia. The company consists of 26 operating businesses. The company got an acquisition-driven model where it buys small accounting firms in Australia – primarily in the Sydney-region. The group showed a very consistent performance through the COVID pandemic due to the defensive nature of the business model. Almost 99% of revenue is annuity style. Brett Kelly is the CEO and founder of the business. With inspiration from Warren Buffett he has built a structure and a strong foundation for a successful long-term business. Intelligent capital allocation is an important aspect of the strategy and is based on the work by William Thorndike in “The Outsiders”. From a human capital point of view the company scores very high on employee engagement surveys and was officially certified as a “Great Place to Work” in June 2021. The annual letters are open and transparent. The company does not guide on short term earnings prospects which we applaud. Brett Kelly owns 50,1% of the company and other insiders own about 10% of the company. Kelly+Partners is the smallest company in the portfolio with lots of room to grow. Kelly+Partners has been a listed entity since 21st of June 2017.