| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | 0% | 0% |
Zeno Investment Fund's largest holding, Danaher, exemplifies how founder-led ownership creates superior long-term value through strategic transformation. Over 40 years, the Rales brothers evolved Danaher from a 1980s conglomerate into a pure-play bioprocessing, life sciences and diagnostics leader, compounding at 21% annually since 1984. Unlike typical executive-led companies that optimize for short-term metrics, Danaher's founders made bold decisions from positions of strength, spinning off profitable but lower-growth industrial businesses while acquiring high-quality assets like Pall Systems and GE Biopharma. This transformation required abandoning a successful playbook when marginal returns on capital declined, demonstrating true ownership mentality. The company's systematic execution through the Danaher Business System, combined with patient capital allocation focused on market power and organic growth opportunities, positions it for continued outperformance. The manager believes investing in companies with this founder mindset improves odds of long-term success by aligning decision-making with generational wealth creation rather than quarterly performance optimization.
Investing in companies with founder mindset and long-term ownership alignment, exemplified by Danaher's transformation from diversified conglomerate to pure-play bioprocessing leader, creates superior risk-adjusted returns through patient capital allocation and strategic business portfolio optimization.
The manager views Danaher 4.0 as a great investment opportunity, expressing confidence that shareholders are much better off after the transformation compared to where the company would have been without these changes.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 21 2026 | 2025 Q4 | BRK-A, DHR, FTV, GE, ITW, JCI, NVST, VRLT | Biotechnology, Capital Allocation, Conglomerates, Ownership, Spin-Offs, value creation | DHR | Danaher represents the power of founder-led ownership in creating long-term value. The Rales brothers transformed a diversified conglomerate into a pure-play bioprocessing leader through strategic spin-offs and acquisitions, compounding at 21% annually over 40 years. This patient capital approach and willingness to abandon successful strategies when necessary exemplifies superior risk-adjusted decision making. |
| Oct 21 2025 | 2025 Q3 | APH, CSU.TO, CTAS, DHR, EZJ.L, HCSG, LIN, ODFL, RYAAY, SNBR, TPG | Capital Allocation, compensation, execution, management, Ownership, Quality, returns | - | Zeno seeks companies led by owner-operators with Founder's Mindset who combine strong execution with disciplined risk assessment. Their portfolio companies like Amphenol, Linde, and Ryanair have management teams owning hundreds of millions in equity, delivering mid-teens returns through superior long-term decision making that prioritizes competitive positioning over short-term metrics. |
| Jun 30 2025 | 2025 Q2 | AAPL, ADI, IFX.DE, TSM, TXN | Analog, Automotive, Cyclical, Industrial, Manufacturing, Onshoring, semiconductors, technology |
TXN TXN |
Zeno added Texas Instruments in January 2024 as a long-term holding in analog semiconductors. TI's focus on catalog chips with multi-decade lifecycles, operational manufacturing excellence, and strategic US fab investments position it for sustained FCF growth. Despite cyclical headwinds, the fund expects 12%+ earnings growth and mid-teens IRR through superior competitive positioning. |
| Mar 31 2025 | 2025 Q1 | AMZN | Customer, E-Commerce, innovation, Leadership, long-term, technology, value | AMZN | Zeno holds Amazon as their only mega cap tech investment due to its unique Founders Mindset culture. Amazon consistently prioritizes long-term customer value over short-term profits through decisive leadership, collaborative innovation, and ownership mentality. This approach creates sustainable competitive advantages and high incremental returns, differentiating it from peers like Microsoft and Google. |
| Dec 31 2024 | 2024 Q4 | - | active management, Concentration, long-term, Quality, risk management, value | - | Zeno redefines active management as concentrated investing in exceptional businesses for long-term wealth protection rather than benchmark outperformance. They seek companies with Founder Mindset, Market Power and Reinvestment opportunity that can compound through economic cycles. The fund prioritizes business quality over diversification, expecting their concentrated approach to protect capital during inevitable market corrections while generating superior long-term returns. |
| Sep 30 2024 | 2024 Q3 | MC.PA | Brand Power, Long Term, Luxury, LVMH, Market share, valuation | - | LVMH represents the ultimate luxury franchise with unassailable brand power and distribution scale. Despite current cyclical headwinds causing near-term underperformance, the company's sustainable competitive advantages and Arnault's long-term stewardship create a compelling path to double-digit returns as luxury consumption normalizes and market share consolidation continues favoring mega-brands. |
| Jun 30 2024 | 2024 Q2 | AER, AIR.PA, BA, DHR, GE, GEHC, GEV, HEI, HON, PH, SAF.PA, TDG | aerospace, Aftermarket, Concentration, Market Power, value | GE | Zeno's largest position GE Aerospace leverages 70% commercial engine market share and razor-blade aftermarket model generating 3.5x engine sale revenue. High switching costs from regulatory requirements and complexity create sustainable pricing power. CEO Larry Culp's operational discipline and $300M+ ownership align interests. Secular air travel growth and efficiency-driven fleet upgrades support mid-single digit volume growth and low-double digit cash flow expansion. |
| Mar 31 2024 | 2024 Q1 | - | Capitalism, concentrated, long-term, Philosophy, Quality, value creation | - | Zeno runs a concentrated 19-stock portfolio targeting rare companies that have escaped capitalism's competitive forces through system failures. They seek businesses earning excess profits managed by long-term oriented leaders who balance stakeholder interests. The fund completed its independence from Dynamo while acknowledging the extreme rarity of companies meeting their criteria. |
| Dec 31 2023 | 2023 Q4 | APH, AZE.BR, CSU.TO, DHR, DSGX.TO, GE, HEI, IPUMP.MI, LIN | Founder Mindset, Investment Criteria, Market Power, Portfolio Transition, Quality | - | Zeno completed major portfolio restructuring, selling eight companies and buying nine new investments that better align with their three investment criteria: market power, reinvestment opportunity, and founder mindset. New holdings include quality names like Constellation Software, Danaher, and Linde. Portfolio changes should normalize going forward with minimal turnover expected. |
| Nov 30 2023 | 2023 Q3 | - | Concentration, Europe, long-term, Quality, value | - | Zeno Equity Partners launches with a concentrated value strategy targeting 25 companies in Europe and Americas. The fund seeks businesses with Market Power, Reinvestment Opportunity, and Founder Mindset, expecting 12-15% annual returns over 5+ years. Large positions are 10-15% of NAV in a low-turnover portfolio focused on long-term free cash flow growth. |
| Jul 18 2023 | 2023 Q2 | APPF | Market Power, Property Management, Reinvestment, SaaS, Vertical Software | APPF | AppFolio dominates property management software with high switching costs and strong unit economics. The company serves 8 million of 79 million addressable units with 30% revenue CAGR since IPO. Patient capital from IGSB enables long-term reinvestment. Despite rich 9x revenue valuation, underlying earnings multiple of 30x for 20%+ growth appears attractive for long-term investors. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
AIAI infrastructure plays dominated 2025 returns, with 65% of Russell 2000's return coming from AI infrastructure. The manager views this as a concentrated market levered to a singular theme - essentially a bet on how much CAPEX five companies will spend building data centers. Questions whether the AI trade will persist given its concentration. |
Infrastructure Data Centers CAPEX |
Small CapsSmall caps continued to underperform large caps in 2025. The Russell 2000's returns were dominated by AI infrastructure plays and speculative unprofitable companies, creating extreme bifurcation between unprofitable stocks and quality stocks. Small cap index exposure increasingly means exposure to both AI CAPEX and unprofitable companies. |
Russell 2000 Underperformance Quality | |
QualityQuality businesses today trade at historically cheap multiples despite extreme valuation disparities between winners and losers reaching historic extremes. The manager believes if earnings are the long-term driver of stock prices, the current market dynamics will ultimately reverse in favor of quality. |
Valuation Multiples Earnings | |
| 2025 Q3 |
QualityThe fund focuses on companies with exceptional execution and long-term risk assessment capabilities. They seek businesses with owner-operators who demonstrate Founder's Mindset, combining executional urgency with disciplined capital allocation. These quality companies have delivered mid-teens or higher long-term total shareholder returns through superior business models. |
Execution Owner-operators Returns Moats Compounding |
| 2025 Q2 |
SemiconductorsThe semiconductor industry has grown at ~8% annually for 40 years, driven by exponential innovation. The fund focuses on analog semiconductors, which are more stable than digital chips and have multi-decade product lifecycles. Analog chips condition real-world signals like temperature and pressure, requiring high precision for applications in medical equipment, automotive, and industrial systems. |
Analog Cyclical Manufacturing Automotive Industrial |
OnshoringTI is constructing multiple new fabs in Texas and Utah while ~70% of analog chips are manufactured in East Asia. In today's geopolitical world, having US-based chipmaking capacity is a large asset as companies like Apple, defense industry and carmakers aim to source more locally. TI is uniquely positioned to answer to this new need for supply chain security. |
Manufacturing Geopolitical Supply Chain Defense Domestic | |
Semiconductor CycleThe semiconductor industry is notoriously cyclical with long lead times for capacity expansion while demand changes can be sudden. TI initiated its largest capex cycle while the industry entered one of its largest cyclical downturns, which troughed below the previous cycle bottom. The company is expanding domestic capacity ahead of the upcoming semiconductor upcycle. |
Cyclical Capacity Investment Downturn Recovery | |
| 2025 Q1 |
E-commerceAmazon demonstrates exceptional customer obsession through consistent price reductions, free shipping innovations, and willingness to cannibalize profitable businesses for customer benefit. The company has reduced AWS prices 151 times since 2006 and introduced free shipping thresholds that cut margins but removed customer pain points. This customer-first approach creates sustainable competitive advantages and long-term value creation. |
Customer obsession Free shipping AWS pricing Digital transformation Market leadership |
| 2024 Q4 |
QualityZeno focuses on building a portfolio of incredible companies with Founder Mindset, Market Power and Reinvestment opportunity. They seek businesses that can continually generate high returns on capital over very long periods and through different economic cycles, managed by trustworthy and aligned people. |
Quality Returns Capital Cycles Management |
ResilienceThe fund emphasizes investing in businesses that will protect wealth when the world looks terrible and take advantage of tough times to position themselves even better for good times. They seek companies with resiliency to thrive when economic cycles turn against them. |
Resilience Protection Cycles Downturns Survival | |
| 2024 Q3 |
LuxuryLVMH represents the crown jewel of luxury conglomerates with powerful brand equity and distribution scale. The company has built significant market power through Louis Vuitton and Dior, which have consistently outgrown the industry and increased market share from 19% to 37% among mega-brands since 2016. Despite current cyclical weakness, luxury consumption has compounded at 6% CAGR over 30 years with strong secular tailwinds from globalization of wealth. |
Brand Power Distribution Pricing Power Market Share Desirability |
| 2024 Q2 |
AerospaceGE Aerospace represents the global leading provider of jet engines with approximately 70% market share of commercial engines. The business model consists of low margin engine sales followed by high margin aftermarket services that generate 3.5x the revenue of initial engine sales. The aftermarket dynamic creates one of the largest and most defensible profit pools in the aerospace ecosystem. |
Commercial Aviation Aftermarket Services Market Power Switching Costs Scale Benefits |
| 2024 Q1 |
QualityThe fund focuses on finding companies that have escaped capitalism's gravitational pull on returns and can earn significant excess profits for extended periods. They seek businesses managed by people with incentives for generational value creation who balance profit maximization with fair treatment of stakeholders. |
Moats Excess Returns Long-term Stakeholders Generational |
| 2023 Q4 |
QualityThe fund applies three rigorous investment criteria: market power, reinvestment opportunity, and founder mindset. Companies must demonstrate all three characteristics to qualify for investment. This quality-focused approach led to significant portfolio changes as existing holdings were tested against these standards. |
Market Power Reinvestment Founder Mindset Quality Criteria Investment Standards |
| 2023 Q2 |
Property ManagementAppFolio operates as a vertical market software provider serving the property management industry with an operating system that handles rent collection, maintenance requests, tenant screening, and accounting for property managers. The company serves approximately 20,000 property managers managing 8 million units out of a total addressable market of 79 million units in the US. The business benefits from high switching costs as it serves as a mission-critical operating system used daily by entire property management staffs. |
Property Management Vertical Software SaaS Real Estate Services Workflow Automation |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jan 21, 2026 | Fund Letters | Cristiano Souza | DHR | Danaher Corporation | Health Care | Life Sciences Tools & Services | Bull | New York Stock Exchange | Capitalallocation, compounding, Governance, Ownership, Spinoffs | Login |
| Jul 17, 2025 | Fund Letters | Zeno | TXN | Texas Instruments Incorporated | Information Technology | Semiconductors & Semiconductor Equipment | Bull | NASDAQ | Analog Semiconductors, automotive, Catalog Products, Cyclical, Free Cash Flow, geopolitical, Industrial, manufacturing, US Domestic Production, vertical integration | Login |
| Jun 30, 2025 | Fund Letters | Cristiano Souza | TXN | Texas Instruments Incorporated | Information Technology | Semiconductors | Bull | NASDAQ | Analog Semiconductors, capital expenditure, Catalog Chips, Free Cash Flow Growth, Supply Chain Security, US Manufacturing, vertical integration | Login |
| Apr 22, 2025 | Fund Letters | Zeno | AMZN | Amazon.com Inc. | Consumer Discretionary | Internet & Direct Marketing Retail | Bull | NASDAQ | AWS, Cloud computing, Competitive Moats, Customer Obsession, e-commerce, Founders Mindset, High returns, innovation, Long-term Value, mega-cap tech | Login |
| Jul 16, 2024 | Fund Letters | Zeno | GE | GE Aerospace | Industrials | Aerospace & Defense | Bull | NYSE | Aerospace, aftermarket services, Commercial Aviation, Defense, Jet Engines, lean manufacturing, market share, Pricing power, secular growth, turnaround | Login |
| - | Fund Letters | Zeno | APPF | AppFolio | Software & Services | Application Software | Bull | NASDAQ | ARPU growth, high switching costs, Long-term Ownership, Market Power, property management, real estate technology, recurring revenue, SaaS, vertical software | Login |
| TICKER | COMMENTARY |
|---|---|
| BRK-A | Miles mentioned that he had been a long-term shareholder of Berkshire Hathaway and had never sold his shares. Over roughly twenty-five years, his investment compounded at about 10.9% annually. The first dollar he invested became approximately thirteen dollars. Since around 1990, Berkshire has only marginally outperformed the S&P 500. By Buffett's own historical standards, this period could be described as mediocre. And yet, admiration for Buffett has not faded—if anything, it has intensified. |
| DHR | After lagging through the first three quarters of 2025, Danaher's stock rebounded during Q4 as bioprocessing, life science, and diagnostics demand continued to recover from a cyclical trough. On the 3Q25 call, management established conservative 2026 growth expectations. Revenue is expected to continue to lag long-term trends at 3-6% but improve throughout the year. |
| GE | For insight into the real economy operating beneath this AI and data center boom, we must look elsewhere within the S&P 500, including bellwethers like General Electric |
| ITW | Names like Berkshire Hathaway, Johnson Controls, ITW, GE or United Technologies pale in comparison. |
| JCI | We exited Johnson Controls, where we have seen strong datacentre sales, but where the residential segment has been impacted by oversupply, with de-stocking expected to continue into 2026 before normalising again. |
| NVST | Envista Holdings Corp. 2.43% |
| VRLT | Finally, in 2023, Danaher spun off its Environmental and Applied Solutions business into a new public company called Veralto. |
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