| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 9.0% | - | -8.2% |
| 2025 |
|---|
| -8.2% |
REQ Global Compounders declined 8.2% in 2025, primarily due to AI narrative impacting 20% exposure to vertical-market software companies, tariff-related uncertainty affecting specialty chemical distributors, and weak performance from recent Röko IPO investment. Despite headwinds, portfolio companies demonstrated resilience through dual growth engines, completing 145 acquisitions while maintaining disciplined capital allocation. Management believes AI creates opportunities rather than uniform threats for mission-critical VMS providers with high switching costs, positioning trusted incumbents favorably versus new entrants. Data center infrastructure beneficiaries including Halma, Diploma, and Amphenol delivered strong performance from AI build-out tailwinds. Portfolio valuation improved to attractive 20.8x EV/EBITA from 23.8x, with modest market expectations below historical delivery capabilities. Companies maintain healthy acquisition pipelines and improving organic growth outlook. Management deployed capital opportunistically, becoming net buyers of Constellation Software, Topicus, and Lumine during drawdown. Long-term compounding potential remains intact with portfolio companies generating average 17% earnings CAGR over past decade through disciplined reinvestment at attractive returns.
REQ invests in acquisition-driven compounders that reinvest large shares of incremental capital at above-average returns, creating high long-term per-share value through combination of organic growth and acquisitions of smaller private firms.
Optimistic about long-term compounding potential of portfolios despite weak 2025 performance. Portfolio companies remain confident about prospects, supported by healthy acquisition pipelines and improving organic performance outlook. Current market expectations appear modest with earnings growth well below historical delivery and management's medium-term capabilities.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 12 2026 | 2025 Q4 | ADDTECH-B.ST, APH, BERG-B.ST, BRO, CSU.TO, DPLM.L, GREEN.ST, HEI, HLMA.L, IMCD.AS, INDU-A.ST, JDG.L, LAGR-B.ST, LIFCO-B.ST, LMN.TO, MOMENT.ST, NCAB.ST, NIBE-B.ST, ROKO.ST, ROP, TOI.TO | Acquisitions, AI, Capital Allocation, compounders, Decentralized, long-term, Quality, software |
JDG LN BRO CSU CN |
AI narrative has negatively impacted vertical-market software companies, representing 20% of Global fund exposure. Management believes AI poses opportunities rather than uniform threats to VMS,… |
| Jul 30 2025 | 2025 Q2 | LMN CN, ROKOB SS, TOI CN | CashFlow, Compounding, Culture, Decentralization, M&A | - | Compounding: REQ emphasizes disciplined long-term value creation through sustained reinvestment, strong free cash flow generation, and cash-culture-driven performance. Portfolio companies announced 78 acquisitions in 1H25… |
| Dec 31 2024 | 2024 Q4 | AME, DCC LN, MTM SJ, VITB SS | CashFlow, Compounding, Culture, Decentralization, M&A | - | Compounding: Strong organic growth, cash generation, and sustained reinvestment drove performance. With 185 acquisitions announced across its companies, the fund emphasizes long-duration reinvestment at attractive… |
| Jul 1 2024 | 2024 Q2 | 0R4P LN, 3004 TT, CEG | CashFlow, Compounding, Decentralization, growth, M&A | - | Compounding: The letter emphasizes strong organic growth, high cash generation, and sustained reinvestment across decentralized acquisition-driven compounders. Portfolio companies announced 99 acquisitions in 1H24, supported… |
| Dec 31 2023 | 2023 Q4 | - | CashFlow, Compounding, Decentralization, growth, M&A | - | Compounding: The letter highlights strong portfolio performance driven by robust organic growth, high cash generation, and consistent reinvestment across a globally diversified set of acquisition-driven… |
| Jul 21 2023 | 2023 Q2 | - | CashFlow, Compounding, Decentralization, growth, M&A | - | Compounding: The fund highlights strong earnings and cash flow growth across its portfolio, driven by long-duration reinvestment at high returns. Companies consistently deploy free cash… |
| Jan 31 2023 | 2022 Q4 | HEI, TDY | Capital Allocation, CashFlow, Compounding, Decentralization, M&A | - | Capital allocation: The letter highlights that the fund focuses on companies capable of redeploying cash at high returns, especially through serial small acquisitions. These firms… |
| Jul 31 2022 | 2022 Q2 | - | Capital Allocation, Compounding, growth, M&A, ROIC | - | Growth: The fund invests in companies capable of long-duration high-ROIC compounding, with strong earnings and cash-flow growth despite market volatility. These businesses reinvest free cash… |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
AcquisitionsPortfolio companies completed 145 acquisitions in 2025, with 70% outside Nordic countries. Companies maintain disciplined approach to M&A with average acquired sales of EUR 12m. Acquisition-driven compounders demonstrate resilience through dual growth engines of organic growth and acquisitions. |
M&A Bolt-on Decentralized Capital Allocation Compounders |
AIAI has been integrated into RGA's research process through tools like NotebookLM, Gems in Gemini, and Claude Code. The firm views AI as a force multiplier for human judgment rather than a replacement, emphasizing the Kasparov Law principle. They believe the market narrative around AI displacement is swinging to unhelpful extremes, creating investment opportunities. |
Machine Learning Automation Software Productivity Innovation | |
Data CentersSupply constraints curtailing infrastructure buildout rate, but compute capacity is being used immediately upon coming online. This differs from dot-com bubble when dark fiber was installed ahead of need. Labor, power and land shortages creating bottlenecks. |
Supply Constraints Utilization Bottlenecks Infrastructure | |
Trade PolicyRecent tariff policies continued to negatively impact U.S. consumers and companies throughout the year. However, international companies have been finding new trade arrangements and growth opportunities, benefiting from shifts in global trade patterns as the new U.S. administration alters terms of international cooperation. |
Tariffs International Growth Cooperation Impact | |
| 2025 Q2 |
BiotechBiotech companies rallied over 25% in the fourth quarter, driven by a series of high-profile biotech acquisitions by large pharma buyers. The managers generally avoid biotech stocks due to their highly binary nature, though they participate through investments in companies that sell products and services to biotech customers. |
Biotechnology Pharmaceuticals M&A Healthcare Binary Risk |
| 2024 Q4 |
MediaWarner Bros Discovery was the top contributor as multiple parties submitted acquisition offers, with Netflix acquiring the Streaming and Studios business while Global Networks spins to shareholders. Paramount Skydance made a $30 per share offer for the entire company, creating a bidding war that unlocked shareholder value. |
Streaming M&A Content Entertainment Bidding |
| 2024 Q2 |
Mispricing |
|
| 2023 Q4 |
BiotechBiotech companies rallied over 25% in the fourth quarter, driven by a series of high-profile biotech acquisitions by large pharma buyers. The managers generally avoid biotech stocks due to their highly binary nature, though they participate through investments in companies that sell products and services to biotech customers. |
Biotechnology Pharmaceuticals M&A Healthcare Binary Risk |
| 2023 Q2 |
CloudAmazon's positioning to benefit from both infrastructure and application layers of AI is highlighted. The company's logistical prowess represents one of the foremost moats in business and will be enhanced with AI through better orchestration of logistics assets and buildout of more sophisticated robotics. |
Infrastructure Logistics Automation Efficiency Coordination |
| 2022 Q4 |
Mispricing |
|
| 2022 Q2 |
UraniumDemand surging from nuclear restarts and new construction while supply faces operational challenges. Google, Meta partnerships signal corporate adoption of nuclear power. Sprott Physical Uranium Trust resumed buying 10 million pounds since June, helping drive 45% price increase. |
Nuclear SMR Utilities Physical |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jan 12, 2026 | Fund Letters | Oddbjørn Dybvad | JDG LN | Judges Scientific plc | Industrials | Scientific & Technical Instruments | Bull | New York Stock Exchange | Acquisitions, Decentralization, dividends, Researchfunding, Scientificinstruments | Login |
| Jan 12, 2026 | Fund Letters | Oddbjørn Dybvad | BRO | Brown & Brown, Inc. | Financials | Insurance Brokers | Bull | New York Stock Exchange | Acquisitions, Brokerage, cashflow, dividends, Insurance | Login |
| Jan 12, 2026 | Fund Letters | Oddbjørn Dybvad | CSU CN | Constellation Software Inc. | Information Technology | Application Software | Bull | New York Stock Exchange | Automation, Integration, Missioncritical, Pricingpower, Recurringrevenue, Regulation, Switchingcosts, Verticalsoftware | Login |
| TICKER | COMMENTARY |
|---|---|
| APH | We trimmed Amphenol Corp. |
| BRO | In 2026, we plan to publish deep dives on Brown & Brown |
| CSU.TO | Broad pressure on the stocks of software companies enabled us to initiate a position in Constellation Software. This is a unique business we had on our radar for a long time but were never able to purchase due to its high valuation. At its core, the company is a permanent capital vehicle designed to acquire 'vertical market software' (VMS) businesses and hold them indefinitely. |
| DPLM.L | Diploma delivered strong, broad-based performance, supported by multiple businesses benefiting from the build-out of high-performance computing and data center infrastructure. |
| HEI | We've held HEI since early 2021. It's one of those quietly excellent family businesses. The Mendelsons have run it for decades, they own a meaningful stake, and they've built durable niches in aerospace parts and defense electronics. HEI was up 36% in 2025, hitting new highs on strong results across both their Flight Support and Electronic Technologies divisions. They keep doing what they do: disciplined acquisitions, high returns on capital, strong cash generation. |
| HLMA.L | Halma consists of over 50 manufacturers operating in global niches within the safety, environmental and healthcare sectors. Halma's diversification, focus on differentiated products and exposure to structurally growing markets have allowed yearly profits to compound at a 15% rate for more than four decades, with low variability. We believe Halma is exceptionally well-managed and expect this growth to continue. Despite Halma's share price rising 32% in 2025, its valuation remains reasonable given the durability and quality of its growth. |
| IMCD.AS | IMCD is a global leader in the marketing, sales and distribution of specialty chemicals and ingredients. The company is widely regarded as best-in-class, benefiting from a highly technical salesforce and extensive global scale. These strengths make IMCD a preferred partner, enabling it to drive consistent organic growth, enhance visibility across distribution channels, and streamline points of contact for customers and suppliers alike. IMCD specializes in the 'true specialties' area of the market, where chemicals or ingredients often have a material impact on end-product performance. That translates into significant pricing power and demand inelasticity – market features we find particularly attractive. Despite strong fundamentals, the stock price has fallen significantly due to a combination of cyclical downturn and market fears that we believe are overstated. This presented us with the opportunity to invest in a well-managed company with substantial M&A opportunities that we think should re-rate over the long term. |
| JDG.L | Judges Scientific continues to face headwinds in its end markets. The company supplies scientific instruments to universities in the US, and recent reductions in federal research funding have affected short-term performance. Over the past 18 years, Judges has grown revenues at a compound annual rate of 20% and EBIT at 26%, while increasing dividends by 22% annually. |
| LMN.TO | We have been net buyers of Lumine throughout this period. Lumine focuses on a large hybrid vertical spanning telecom and media and tends to pursue larger transactions, including complex corporate carve-outs where a proven integration playbook is critical. |
| ROKO.ST | During March, we made a significant investment as a cornerstone investor in the IPO of Swedish-based acquisition-driven compounder Röko AB. The stock price since the IPO is down 19%, despite delivering a strong EBITA growth of 11% for the first 9 months of 2025. We believe the business possesses the characteristics required to compound capital at attractive rates. |
| ROP | After a decade-long partnership with Roper Technologies, we have made a strategic decision to exit our position. Our decision to sell was based on three factors. Firstly, Roper's organic growth rates have begun to lag its pure-play software peers. Secondly, we believe many of these businesses are approaching market saturation, which limits their future growth prospects. Lastly, the valuation no longer provides an attractive margin of safety given the first two challenges. |
| TOI.TO | Detracting from performance were holdings of Constellation Software and spinoff Topicus despite strong underlying earnings amid concerns that AI could affect their software offerings |
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