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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
|---|---|---|---|---|---|---|---|
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"RDCP delivered 20% enterprise value growth through strategic acquisitions in UK industrials while disposing underperforming assets. The diversified holding company targets £50m EBITDA by 2025 through continued buy-and-build strategy across construction, electrical distribution, and engineering services."
RD Capital Partners achieved 20% enterprise value growth in 2024, reaching £600m through three highly accretive acquisitions totaling £12.5m of new EBITDA. The firm acquired MCS Group (£130m revenue construction contractor), Links Electrical (renewable energy distributor), and Grayton (industrial engineering services), while disposing of underperforming assets including Pexion and Intelling. RDCP now operates 12 portfolio companies across industrials (72%), healthcare (13%), and consumer (12%) sectors, generating £305m combined revenue and £30m EBITDA with 2,000 employees. The company maintains no outside capital and focuses on acquiring businesses from retiring owners with permanent capital approach. Key risks include execution challenges from rapid growth and integration complexity. Primary catalysts include the 2025 transformation from holding company to integrated conglomerate and targeting £50m EBITDA through continued acquisitions. The firm expects significantly higher growth rates in 2025, maintaining confidence in high double-digit returns while expanding minimum acquisition criteria to £2m EBITDA businesses.
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Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.
Market Conviction
High conviction evidenced by concentrated portfolio of 12 companies with detailed thesis explanations for each major acquisition. Manager provides specific financial targets (£50m EBITDA by 2025), names and sizes major positions, and demonstrates willingness to hold through volatility while disposing of non-performers. Clear strategic framework with permanent capital approach supports high conviction assessment.
Growth Outlook
Manager expresses strong optimism about 2024 being a year of measured growth and significant turnaround, with confidence in maintaining high 70% average annual growth rates. Forecasts significantly higher enterprise value growth in 2025 than the 20% achieved in 2024, demonstrating clear bullish market outlook.
Risk Appetite
RDCP deployed £12.5m of new EBITDA through three major acquisitions while simultaneously disposing of underperforming assets, demonstrating aggressive capital deployment and risk-on positioning. The firm is actively scaling acquisition criteria and targeting larger deals, indicating high risk appetite.
Capital Deployment
Aggressive deployment evidenced by £12.5m of new EBITDA acquired through three major transactions while simultaneously disposing of underperforming assets. Manager explicitly states focus on offense as primary growth strategy and describes live pipeline for continued sizeable acquisitions, indicating strong net deployment activity.
Forward Guidance
Manager provides explicit forward deployment guidance with live pipeline of sizeable acquisitions targeting £50m EBITDA goal. Clear intention to continue aggressive acquisition strategy with increased minimum deal sizes, representing strong deployment bias and active scaling of investment activity.
Language Signal
Language is predominantly positive with terms like strong optimism, extraordinary results, soared, and compounding machine. While some risk language exists around past challenges with Pexion and Intelling, the overall tone emphasizes opportunity, growth, and value creation significantly more than downside risks.
Perceived Risk
Manager acknowledges some operational complexity and past challenges with Pexion and Intelling but frames these as learning experiences rather than ongoing threats. Risk discussion is limited and immediately reframed as opportunities for improvement and discipline, with minimal focus on systemic or environmental risks.
Opportunity Density
Manager describes live pipeline of sizeable acquisitions and increasing deal criteria from £1.5m to £2m minimum EBITDA with sweet spot rising to £4m, indicating abundant opportunity set. Focus on larger, higher-quality businesses suggests selective but rich opportunity environment in target sectors.
Time Horizon
Explicit permanent capital approach with no outside investors and philosophy of investing like you might own the business forever, citing Warren Buffett's favorite holding period is forever. Manager describes long-term vision of becoming largest private company in UK and emphasizes stewardship for retiring business owners, indicating very long-term horizon.
