Gwen Hofmeyr on Methods to Verify a Company’s Market Share

August 29, 2025 in Audio, Case Studies, Diary, Equities, Invest Intelligently Podcast, Member Podcasts, Skills

Gwen Hofmeyr of Maiden Financial shared her research in a presentation entitled, Testing Market Share: Methods to Verify a Company’s True Market Position.

Gwen shares key insights into verifying a company’s market position — looking beyond standard market share disclosures to assess competitive standing. She demonstrates how investors can rigorously question management’s market share claims instead of accepting them at face value. By applying an “owner-like” scrutiny, Gwen shows that granular research can determine if a company’s touted competitive edge is genuinely defensible or overstated.

Gwen notes that companies often define their “market” selectively, making reported market share figures unclear or misleading. Because independently verifying those figures is time-consuming, management has latitude to present a rosy picture that may gloss over important nuances. When a company boasts “We have X% market share,” investors should ask, “What do you mean by that?”

She outlines three methods to test market share claims: product analysis, geospatial analysis, and platform analysis. Each technique examines a firm’s standing from a different angle—comparing specific product lines, mapping regional market presence, or benchmarking the breadth of its platform against peers. Together, these tools yield a more granular, owner-like view of competitiveness. The goal is to give investors an independent, fact-based understanding of a company’s position, akin to the insight of an industry insider.

For example, Melexis, a Belgian automotive sensor maker that ranks only 4th or 5th in global sensor sales, turned out to be the #1 supplier of certain niche sensors (magnetic position sensors) — a sub-market leadership that broad industry stats had overlooked.

Likewise, Palfinger (a knuckle-boom crane manufacturer) was found to command a majority share of the heavy-duty crane segment, even though its reported global share is ~30–35%. This specialization helped Palfinger keep prices firm even as broader construction markets softened.

Another case is 4imprint Group, a promotional products distributor with about a 5% North American market share. Gwen’s platform analysis revealed that 4imprint is #1 in product breadth across virtually all categories, so its modest overall share belies a commanding lead in its niche.

Finally, a geospatial study of regional grocer Ingles Markets debunked management’s claim that new discount rivals were heavily encroaching on its turf. Mapping 95% of Ingles’s store footprint showed that the threat from Aldi and Trader Joe’s was greatly overstated, and that Ingles’s ownership of strategic store sites provides a defensive advantage.

Across these cases, the findings either affirmed a company’s competitive moat or corrected the prevailing narrative about its market position. This demonstrates the value of verifying market share claims: by digging deeper, long-term investors can gain a clearer and more confident view of a business’s true competitive standing.

Presentation overview:

  • Introduction – Market Share Definitions & Context
  • Issues with Market Share Disclosure
  • Methods to Verify Market Share (Product, Geospatial, Platform Analysis)
  • Case Study: Melexis (Product Analysis – Automotive Sensors)
  • Case Study: Palfinger (Product Analysis – Heavy-Duty Cranes)
  • Case Study: 4imprint Group (Platform Analysis – Promotional Products)
  • Case Study: Ingles Markets (Geospatial Analysis – Store Footprint)
  • Conclusion – Key Lessons

The session was hosted by Tarek Andari and recorded in July 2025.

Watch this session:

This session is also available as an episode of Invest Intelligently, a member podcast of MOI Global. (Learn how to access member podcasts.)

About the instructor:

Gwen Hofmeyr is the founder of Maiden Financial. Previously, Gwen worked as an analyst for Folly Partners, the family office of Andrew Wilkinson and Chris Sparling, who are co-founders of the up-and-coming Berkshire Hathaway of internet businesses, Tiny Capital.

Nishant Gupta on the Nuances of Investing Across Geographies

August 13, 2025 in Equities, Interviews, Transcripts

We had the pleasure of speaking with Nishant Gupta, founder and CIO of Kanou Capital, a London-based long/short energy transition fund.

Nishant has over two and half decades of investment experience working alongside Peter Lynch and other renowned investors through his roles at Fidelity Investments, TT International, and Lansdowne Partners. He is an expert on energy, industrials, and materials and has covered multiple geographies including Asia, EU, and the US. Furthermore, Nishant has been co-teaching the value investing course at London Business School since 2019.

In this exclusive interview, Nishant provides insights into structuring Kanou Capital, how his experiences shaped Kanou’s investment philosophy and nuances of investing across the different geographies. We also dive into the investment strategy and the energy transition space, as well as its corresponding capital cycle. Finally, we learn more about Nishant’s contributions at London Business School.

Overview:

  • Nishant Gupta’s Background
  • Structuring Kanou Capital
  • Kanou Capital’s Investment Philosophy (Cheap + Quality = Value)
  • Nuances in investing Europe and Asia versus the US
  • Kanou Capital’s Investment Strategy
  • Insights into the Energy Transition Space, and Capital Cycle Dynamics
  • Co-teaching the Value Investing Elective at London Business School

Tarek Andari: Tell us about your professional background and how the idea of launching Kanou Capital came about.

Nishant Gupta: Kanou capital is a fundamental long/ short hedge fund focused on energy transition. We launched Kanou Capital in February 2025 with a US$100 million seed. Our investment approach is highly differentiated, grounded in deep fundamental research, and focused on global sector coverage.

In terms of my background, I grew up in India and studied chemical engineering at IIT Bombay. Following graduation, I worked for five years in Japan as a software engineer, primarily at UBS Investment Bank, where my interest in finance began.

I then earned the MBA from Columbia Business School, participating in its value investing program, which greatly influenced my investment philosophy. After Columbia, I joined Fidelity Investments, spending nine years across their Boston, Hong Kong, and London offices. At Fidelity, I covered energy transition-related sectors such as industrials, materials, utilities, and energy, and managed analyst sector funds. This experience taught me rigorous fundamental investing, financial modeling, primary research, engaging deeply with management teams, and assessing long-term intrinsic value.

Subsequently, I joined TT International in London, a reputable boutique firm established by former Fidelity colleagues. At TT, I incorporated a macroeconomic perspective into my investing approach, complementing my bottom-up analytical foundation from Fidelity. Though I don’t consider myself a macro investor, this macro-awareness proved essential.

In 2019, I joined Lansdowne Partners’ energy fund, which later became Clean Energy Transition (CET), managing multibillion dollars in assets making it one of the largest dedicated energy transition funds globally. Here, I refined my expertise in shorting and disciplined risk management.

Kanou Capital is the combination of these experiences: the deep fundamental research approach from Fidelity, macroeconomic insights from TT International, and disciplined risk management from Lansdowne Partners and Clean Energy Transition.

Tarek Andari: Can we touch on structuring Kanou Capital, and maybe tell us some of the operational and fundraising challenges you’ve had, and how you initially approached building trust with your seed client to get going?

Nishant Gupta: Launching a new fund in the UK involves significant complexity and takes longer than other regions, particularly the US, which partly explains why fewer funds launch here.

When I left CET, I knew that I wanted to set up my own fund rather than joining another platform because the most important thing for me in any business is culture, and culture comes from the top, and you can only set it if you are setting your own firm. Additionally, my experience from three respected firms, Fidelity, TT, and Lansdowne, and our focus on energy transition, a critical long-term investment theme, opened doors to initial investor conversations.

I knew most of these investors were not Day One investors, but I knew we were building a long-term institutional quality product, so building these relationships was important. I am lucky that we have a lot of interest from some very high-quality investors who are closely following us. In these conversations, we discussed our investment style, our team’s strengths, and why we believe we have a repeatable framework for generating attractive risk-adjusted returns. We were fortunate to find an excellent partner who backed us with seed capital.

Operationally, given that FCA registration in UK can take time, we’ve outsourced non-investment activities such as trading, compliance, and operations. Fortunately, the industry has evolved significantly, making outsourcing efficient and seamless. We plan to gradually bring these activities in-house once our regulatory license is secured, likely early next year.

“The most important thing for me in any business is culture, and culture comes from the top, and you can only set it if you are setting your own firm”

Tarek Andari: Just to follow up, is Kanou capital registered as an LLP and US domiciled?

Nishant Gupta: Kanou Capital’s management company is UK-domiciled, and the fund itself is registered in the Cayman Islands. We structured the management company as an LLP because it allows us to treat team members as true partners, aligning incentives and fairly rewarding their contributions. My previous two firms were also LLPs, and I find this structure best reflects the collaborative culture we’re building at Kanou.

Tarek Andari: You’ve combined 3 investment frameworks built upon from your experience. So, what would be an ideal client then? Are they still long-term clients with sticky capital, measuring you on a long-term benchmark, or given the long/ short aspect, are you a bit shorter to near term on your results?

Nishant Gupta: That’s a good question. While energy transition is undoubtedly a long-term theme, we chose a long/short approach rather than long-only because the sectors we invest in tend to be highly volatile and cyclical, driven by macro factors like commodities, politics, and regulation. Our goal is to compound investors’ capital at double-digit rates over a long horizon while carefully managing volatility.

We see energy transition today as being on the cusp of major change, much like the technology sector was 25–30 years ago. This inflection point presents a significant opportunity to generate attractive long-term returns. Our investment philosophy focuses on deep fundamental analysis, understanding management teams, and assessing capital allocation decisions, while allowing these investments to play out over time rather than relying on short-term trading.

Our analysis indicates that dispersion in returns within energy transition sectors is comparable to that in technology, a sector where long/short strategies have successfully generated strong risk-adjusted returns over multiple decades.

Tarek Andari: You touched on the investment philosophy, happy to move into that next. You mentioned, starting in UBS then going to the value investing program, learning fundamental analysis, then looking at shorting. So, which experiences have influenced you the most or shaped your philosophy over time?

Nishant Gupta: Great question. The first big shift for me was the value investing program at Columbia Business School, where I learned firsthand from great guest lecturers who were practicing investors on the Wall Street. While studying there, I also worked part-time at a very reputable hedge fund called Tyndall Management, founded by the universally respected Jeff Halis. We did deep-dive research but took only a handful of new positions each year, an experience that taught me the importance of patience and discipline in investing.

At Fidelity, I saw these principles in action. Portfolio managers like Will Danoff and Joel Tillinghast – completely different styles, one growth, one value—both beat the market for decades. Early on, I also had the privilege of spending time with Peter Lynch. Each quarter, he would sit down with our small group of new analysts for candid, in-depth discussions about investing. His passion for stocks was infectious, even after all his success, and it was incredibly inspiring to witness.

One lasting lesson came from a portfolio manager at Fidelity who had a sign on his door: “Cheap is not value. Cheap + Quality is value” That line stuck with me. It became central to how I invest and is something I still teach my students at London Business School.

Covering cyclical sectors over the past two decades reinforced those lessons. Cycles create windows where high-quality businesses temporarily trade cheap. If you stay patient, you can collect steady singles and, once in a while, swing for that home run.

Investing is endlessly fascinating—you’re always learning. Even being right 60% of the time can yield outstanding results. That mix of value discipline, patience, and passion for stocks shaped me into the investor I am today.

“Cheap is not value, Cheap + Quality is Value”

Tarek Andari: Thank you for bringing up ‘Cheap + Quality = Value’, there are different shades of value investing as you mentioned, and that anchors the discussion well. Could you maybe share with our community some nuances you consider when looking at stocks in different geographies, for example, or assessing other investor strategies in different geographies in terms of portfolio, turnover duration, etc, maybe. How does that shape your investment strategy?

Nishant Gupta: Sure and let me also connect this to your earlier question.

At Kanou Capital, our philosophy centers on changes in ROIC (Return on Invested Capital), which we see as the single most important metric for any business. We analyze stocks as businesses, looking at market position, competition, long-term drivers, and management’s capital allocation. Mauboussin’s work, and our own analysis, shows that companies moving up quintiles generate outsized returns. The market tends to price short-term earnings quickly but often misses these gradual, multi-year improvements in ROIC, whether driven by culture shifts or better capital efficiency. That’s where we find the most opportunity.

This also shapes how we look at sectors. Fast-moving themes like AI are quickly priced in, but areas such as energy infrastructure, much of which is 50–60 years old, are slower-moving and overlooked. The shift to renewables, EVs, storage, and electrification will take decades. These long-duration changes allow us to invest with conviction, compound capital steadily, and avoid the volatility that often comes with chasing near-term themes.

“In the U.S., management incentives are closely tied to shareholder returns, leading to efficient capital allocation and quicker decision-making. In Europe, management teams think longer-term but often operate with less efficient balance sheets, which can keep valuations lower.”

Geography plays a role too. Charlie Munger used to say that you need to understand somebody’s incentive to understand how they are going to act. In the U.S., management incentives are closely tied to shareholder returns, leading to efficient capital allocation and quicker decision-making. In Europe, management teams think longer-term but often operate with less efficient balance sheets, which can keep valuations lower. On the other hand, Asia is a difficult market to invest in, because the mentality that minority shareholders are owners is only acknowledged by very few companies and very few management teams. We focus there on high-quality businesses with durable moats only because of this reason.

Our strategy revolves around identifying slow, durable ROIC improvements and partnering with management teams that are aligned with shareholders. These dynamics differ by region, but the core philosophy remains the same.

“Asia is a difficult market to invest in, because the mentality that minority shareholders are owners is only acknowledged by very few companies and very few management teams.”

Tarek Andari: Thank you. A good way to round off both questions. I’m aware of the tables that you’re talking about on TSR and quintile movements. I have two questions from the same paper. I believe he’s presented a dispersion of returns of economic profit for companies, and the Russell 3,000 for the 4–5 year period between 2018 to 2022, and the dispersion shows that a lot of the economic profit is concentrated in the best decile firms versus having a sort of a linear spread between worst to best. You see a lot of the economic profit at the top 10%. Do you see something similar in Industrials and Energy Transition? Or is it more spread out? And you have winners across the spectrum.

Nishant Gupta: I’d say it’s a bit more balanced in our sectors. Unlike technology, where you often see a “winner-take-all” dynamic, sectors that we invest in tend to be more cyclical, so the dispersion is wider. That said, we mostly focus on companies in the 4th and 5th ROIC quintiles, the second-best and best quality buckets. Occasionally, if a high-quality company temporarily falls to a lower quintile, we’ll step in, but we generally avoid the lowest end of the spectrum.

As Ben Graham put it, “The fastest way to lose money is to buy low-quality, highly cyclical companies during good times.” People get overly optimistic when conditions are strong and pile into weak businesses, and that’s when mistakes happen. That quote, written back in the ’50s, is still just as true today.

Tarek Andari: Another topic that Mauboussin touches on as well is the level of investment in intangible assets versus tangible, given your comparison to the technology sector, do you see this in Industrials and Energy Transition as well? If so, what frameworks are you using to assess quality on the intangible scale, versus tangible?

Nishant Gupta: That’s a good question. In our universe, these are mostly heavy capital cycle sectors. The bulk of the assets are tangible, and when it comes to intangibles, what you typically see on the balance sheet is Goodwill, mostly from past M&A. So we don’t face the same complexities around intangibles that you see in tech or brand-driven businesses.

Tarek Andari: Maybe now is a good time to bring up the Bloomberg report. Since we’re touching on the sector in a bit more detail. A strand of the energy transition sector, which is clean energy, in my mind maybe encompasses software companies, some more tangible assets and infrastructure maybe, across the spectrum of business models there. I will leave it to you to guide me on that. Bloomberg quoted you saying that the sector was dead for now so could you maybe walk us through the rationale? And maybe again a question on frameworks whether you use the capital cycle framework here at all to come to such a conclusion.

Nishant Gupta: The headline didn’t fully capture the essence of what I was trying to say. Energy transition is complex. When we think of energy, there are three components to the pie: a third is electricity, a third is transport, which is oil, and a third is heating, which is mainly natural gas. Now, with that composition, clearly the electricity part is growing. Helped not only by AI-driven demand but also by the shift away from oil in transport and gas in heating. More EVs mean more electricity use, and building codes are increasingly pushing electric based heating.

“When we think of energy, there are 3 components to the pie: a third is electricity, a third is transport, which is oil, and a third is heating, which is mainly natural gas. Now, with that composition, clearly the electricity part is growing”

Our focus is on going deeper in the supply chain of this long-term transition. The capital cycle has started. We are in the second year of a 2-3 decade investment cycle . We’re focusing on the supply chain. We look at the energy transition from a non energy lens. Our focus is to invest in industrials and materials because you can find lots of companies with low capital intensity and high ROIC.

“The capital cycle has started. We are in the second year of a 2–3 decade investment cycle”

Clean energy specifically is struggling right now because subsidies have created volatility rather than stability. I saw something similar back in 2007–08: policy noise drove boom-and-bust cycles that prevented the supply chain from planning capacity properly. Ironically, clean energy today is competitive on cost even without subsidies. If we removed subsidies and allowed demand to stabilize naturally, it would create more certainty and accelerate the build-out. But I really hope, because I do care about the environment and the planet, and we all should do, I really hope the renewables and cleaner fuel should take a bigger market share.

I’ll give you an example. I’m in Boston today visiting after a very long time. My investment journey started in Boston when I started in 2008. I remember Boston winters had snowfall everyday and big snowstorms every winter. I was shocked to learn that it barely snows in Boston anymore. And people are still debating whether there’s global warming or not. To go back to the meaning of Kanou. The word Kanou is a Japanese word which means ‘Possible’, and to my earlier point and to the energy transition, this word Kanou, it highlights the various opportunities, challenges, and uncertainties associated with moving towards a more sustainable and low carbon energy system. It acknowledges the complexity of this transaction involving technological, economic, social, and political dimension. The reason we chose Kanou, which means “Possible”, is that it is still possible. It’s getting late, but it’s still possible to stop and reverse climate change. But we don’t have a lot of time.

Tarek Andari: What KPIs then, or metrics, are you using here to gauge over or under capacity at different points in the market?

Nishant Gupta: In capital-intensive and manufacturing-driven sectors, the key KPI is utilization, but we also closely watch inventories, order intake, and organic growth.

Demand can be volatile in the short term, but over the long run, it usually tracks GDP-like growth rates. Supply, on the other hand, is easier to forecast in our sectors because it takes multi-years for new capacity to come online.

Another KPI we watch is marginal cost. Understanding both utilization and how the marginal cost curve is moving gives you a sense of where pricing power and profitability are headed.

Finally, we focus on free cash flow generation and how management reallocates that cash. We also emphasize ROIIC, or Return on Incremental Invested Capital, which is forward-looking. ROIC looks backward, but ROIIC answers: “If you invest a dollar today, what’s the expected return on that incremental capital?” That forward view is critical for judging management decisions and future returns.

ROIC looks backward, but ROIIC answers: “If you invest a dollar today, what’s the expected return on that incremental capital?” That forward view is critical for judging management decisions and future returns.

Tarek Andari: We have a couple of minutes left, should we conclude with your excellent contributions in academia over the past 7 years. I’m aware you’ve been a Visiting/ Affiliate lecturer at London business school co-teaching the value investing elective. Could you reflect on why you think this is very important to do? Is there any advice you’d share with the MOI Global community to be more engaged or aligned with an academic body?

Nishant Gupta: The Value Investing program I took at Columbia Business School was truly exceptional because it was all about learning from real investors and real-world situations, not just textbooks. At Columbia, every week we worked on fresh, live case studies, companies that were actively being debated in the market. You learn by doing the work, discussing with professors and fund managers, and engaging with classmates who are all analyzing different stocks. That kind of hands-on experience is invaluable. That’s what we try to do at London Business School.

Having spent 15 years alongside investors who consistently beat the market, I don’t question whether markets are efficient, I know they’re not. The key is figuring out how to exploit those inefficiencies. One of the core lessons we emphasize is that “cheap is not value”. Twenty years ago, buying low-multiple stocks might have worked, but with today’s quants and multi-managers competing on short-term moves, you need to focus on quality and on long-term undercurrents that the market often overlooks.

Our teaching emphasizes understanding businesses deeply: what they do, their drivers, how to value them, and only then looking at price. There’s a great line from an ex-Fidelity fund manager: “The paradox of investing is that the more long-term your perspective, the more short-term outcomes you get right”. That’s exactly what we want students to internalize, focus on the long-term fundamentals, and the near-term noise takes care of itself.

For me, giving back through teaching is personal. My parents were both schoolteachers. I learned a lot about investing at Columbia, and it feels like a responsibility to help the next generation of investors develop the same foundation.

Tarek Andari: Thank you that’s inspirational. If we can have maybe two more minutes, I would like to ask a challenging question. Why do you feel that it is relevant to teach value investing when the active investing space is under pressure?

Nishant Gupta: That’s a great question. I’d say there are many ways to make money in markets. I’m not claiming that value investing is the only way, but it’s the approach that has worked for me, and it’s what I know best, so it’s what I can teach with conviction.

When we talk about value investing today, it’s very different from what it was 20–30 years ago. Modern value investing isn’t just about buying something cheap on a low multiple. We’re happy to pay a fair price, even a premium, for a high-quality business with strong management, a clear MOAT, good growth prospects, and the ability to compound over time. To us, that combination – quality, durability, and growth at a reasonable price – is what creates real value.

We see our role as providing various frameworks and being a resource to students. It’s deeply rewarding to share what’s worked for us and help them develop the skills and mindset needed to invest with a long-term perspective.

Tarek Andari: Sure, and in terms of the tools being learned, and the applicability of the tools in a challenging active management industry. Would you say it’s still right to teach the class? And it’s important for these tools to be taught even though the prospects of a long-term career in this field may not be available for too long?

Nishant Gupta: I’d push back on the idea that long-term investing is dying. If you look at where the real capital sits, endowments and large institutions, they care deeply about long-term compounding. They value investors who can deliver steady double-digit returns and remain focused on the long game.

In my view, the key is to integrate technology into every aspect of money management and risk management.

That said, I understand where the question comes from. The increasing focus on short-term trading has created more volatility in markets.

Too often, investors let market moves undermine their conviction, but today’s markets are driven far more by flows and algorithms than by fundamentals. If you treat those moves as signals, it’s easy to get shaken out of good ideas.

Instead, focus on what you do best: deep research, conviction in your process, and holding through volatility. If you can do that, there’s still enormous opportunities for long-term investors who think independently. For students, my message is simple: be positive. The opportunity for thoughtful, long-term investing today is every bit as good as it was when I started in 2006, if anything, it’s better given the higher volatility due to increasingly short-term focus.

Tarek Andari: As a closing statement, can I ask you to provide a piece of advice, one you would have given yourself when starting out or when reflecting on your journey for the MOI Global community?

Nishant Gupta: I don’t think this will be something you haven’t heard before, but it’s timeless: do what you genuinely enjoy. Don’t choose finance, or any field, just because of the money. Look at Meta paying US$200 million to AI engineers. If you truly enjoy what you do, you’ll naturally get better at it, and the success will follow.

Tarek Andari: Perfect thanks so much, Nishant. I really appreciate it.

Nishant Gupta: Thank you for the opportunity.

printable transcript


The content of this website is not an offer to sell or the solicitation of an offer to buy any security. The content is distributed for informational purposes only and should not be construed as investment advice or a recommendation to sell or buy any security or other investment, or undertake any investment strategy. There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information set forth on this website. BeyondProxy’s officers, directors, employees, and/or contributing authors may have positions in and may, from time to time, make purchases or sales of the securities or other investments discussed or evaluated herein.

Interest Rate Paradigm Shift: Eastern Europe Poised for Revaluation

August 6, 2025 in Commentary, Diary, Equities, Europe, Ideas

This article is authored by MOI Global instructor Steve Gorelik, portfolio manager at Firebird Management.

Firebird has been investing in Eastern European equities for over thirty years, and over that time, we’ve learned to take a few things for granted: inflation and interest rates tend to be higher than in developed markets, and local currencies typically depreciate—gradually or abruptly—against the dollar and euro.

This pattern is well documented. Weaker institutions raise perceived risk and elevate inflation expectations. These expectations fuel actual inflation, which puts further downward pressure on the currency. Depreciation then raises the cost of imports, reinforcing inflation and creating a vicious cycle.

But what would happen if the circumstances change and these assumptions no longer hold true?

As noted in a recent FT Alphaville piece, “The U.S. is NOT an emerging market.”[1] While developed economies like the U.S. grapple with political interference in monetary policy, many of the emerging markets once dismissed as fiscal basket cases are now pursuing more orthodox, credible economic policies. Countries such as Brazil, South Africa, and Turkey are running restrictive interest rate regimes aimed at reining in inflation and restoring consumer confidence.

In our investment universe, in countries like Georgia and Kazakhstan, central banks maintain high interest rates while inflation is seemingly under control and has been coming down for the last two years. Real interest rates in these countries are well over 6%, which is higher than the peak reached in U.S. during the Volcker era. The central banks are run by western educated technocrats who have seen the first-hand impact that high inflation has on the economy and haven’t just read about it in textbooks.

Source: Bloomberg, Firebird Value Advisors Research

The latest policy rates for Kazakhstan and Georgia are set at 15.25% and 8% respectively, which raises a question: What happens to these economies—and to asset values—if interest rates begin to seriously decline?

The U.S. offers a compelling historical parallel. From 1980 to 1990, real interest rates fell from nearly 6% to under 1%. During the same period, the Fed funds rate dropped from 18% to 7%, and inflation declined from over 12% to under 6%. This shift catalysed a virtuous cycle: declining rates spurred investment, which drove productivity and growth. Between 1983 and 1990, U.S. real GDP grew at an average annual rate of over 4%, compared with just under 1% in the preceding five years.

The effect on equity markets was even more dramatic. While corporate after-tax profits grew at 4.5% annually, the S&P 500 delivered returns of more than 14% per year, thanks in large part to multiple expansion.

Source: Bloomberg, multpl.com, Firebird Value Advisors Research

In another example from an emerging market, Brazil over the past two decades experienced multiple periods when real interest rates were sharply increased to combat inflation, and later brought down once price pressures were under control. In 2002, with inflation spiking above 12%, the central bank raised its target rate to 25%. This decisive action helped stabilize prices, and both inflation and interest rates declined steadily over the following decade. During that time, equity markets delivered annualized returns of 25%.

Source: Bloomberg, Firebird Value Advisors Research

Inflation surged again in 2015, prompting the central bank to raise rates to over 14%. By 2019, both inflation and policy rates had fallen to around 4%, and equities once again posted impressive returns of 27% per year. Remarkably, this performance occurred against a backdrop of intense political turbulence—including the Lava Jato corruption scandal, the impeachment of President Rousseff, the imprisonment of former President Lula, and the election of the highly polarizing far-right populist Jair Bolsonaro. This suggests that, in emerging markets, investors often care more about the direction of interest rates than the noise of political headlines—no matter how dramatic they may be.

Looking at interest rates and equity valuations around the world, a clear pattern emerges: countries with higher policy rates tend to have equities trading at lower valuations. The theoretical explanation lies in the Discounted Cash Flow (DCF) model, where the interest rate is a key component of the denominator. In practice, however, it is important to consider not only domestic interest rates but also the discount rates used by the marginal buyers of securities. If the buyers are primarily domestic, then local interest rates and risk premiums apply. However, if the buyers are foreign, their funding costs and risk perceptions may differ significantly—either lower or higher—than those of the domestic audience.

Source: Bloomberg, Firebird Value Advisors Research

As shown in the earlier examples, high real interest rates often signal that rates are likely to decline once the central bank believes inflation is under control. When that happens, equity trading multiples typically rise, as the discount rate used by marginal buyers falls.

Going back to Georgia and Kazakhstan, we believe that these countries boast some of the bestmanaged companies in the emerging markets universe. Banks such as Halyk Bank and Lion Finance (Georgia) have been in recent years generating returns on equity in excess of 30%. Despite delivering outstanding results—EPS growth of 21% p.a. for Halyk and 33% for Lion since 2019—these companies remain astonishingly cheap, trading at just 3.5x and 6x earnings, respectively. With GDP growth already exceeding 5% in Kazakhstan and 9% in Georgia, a sustained decline in interest rates could provide the catalyst for multiple expansion and a rerating of these stocks.

In thirty years of investing, we saw some of the best opportunities emerge when long-held assumptions began to crack. Markets can be slow to adjust their frameworks, even when the underlying fundamentals have already shifted. This inertia creates pockets of profound mispricing—particularly in regions that are overlooked and where investors have been conditioned to expect certain outcomes. When perceptions finally catch up to reality, the adjustment tends to be substantial.


[1] https://www.ft.com/content/a9a9dd1e-36cf-4e2e-81d0-05c64a01871f

The content of this website is not an offer to sell or the solicitation of an offer to buy any security. The content is distributed for informational purposes only and should not be construed as investment advice or a recommendation to sell or buy any security or other investment, or undertake any investment strategy. There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information set forth on this website. BeyondProxy’s officers, directors, employees, and/or contributing authors may have positions in and may, from time to time, make purchases or sales of the securities or other investments discussed or evaluated herein.

Polaris Renewable Energy: Attractive FCF Yield with Upside Optionality

July 18, 2025 in Audio, Discover Great Ideas Podcast, Equities, Ideas, Member Podcasts, Transcripts, Wide Moat, Wide-Moat Investing Summit 2025, Wide-Moat Investing Summit 2025 Featured

Shawn Kravetz of Esplanade Capital presented his investment thesis on Polaris Renewable Energy (Canada: PIF) at Wide-Moat Investing Summit 2025.

Thesis summary:

Polaris Renewable Energy is a Canadian renewable energy company focused on owning, operating, developing, and acquiring projects primarily in Latin America and the Caribbean. Headquartered in Toronto, Polaris recently had a market capitalization of C$253 million (US$185 million) and net debt of around US$127 million. Despite a track record characterized by modest overpromising and occasional underdelivery, the business remains compelling due to its substantial and durable cash generation. Polaris yields a notable ~7% dividend, supported by strong free cash flow with a payout ratio of ~45%.

Polaris’s valuation appears deeply discounted compared to its peers, trading at just 5.4x estimated 2025 EV/EBITDA. In contrast, comparable renewable energy companies like Boralex, Brookfield Renewable, Clearway Energy, Innergex, and Northland Power trade at average multiples of ~12x EV/EBITDA. Polaris’s discounted valuation is noteworthy, considering its robust cash generation, with a free cash flow yield recently estimated at 15.7% after deducting debt repayments.

Operationally, Polaris’s results have shown relative stability with occasional step-changes, reflected in adjusted EBITDA progressing from US$43.8 million in 2021 to a projected US$58 million in 2025. While its stock price has experienced significant volatility, it has essentially traded sideways over the past five years. This stagnant stock performance masks the underlying durability of Polaris’s cash flows and its potential growth catalysts.

Looking ahead, Polaris has multiple pathways to unlock shareholder value. A significant potential catalyst is its Puerto Rico battery storage project, representing up to US$50 million in net investment with expected EBITDA returns near 30% annually for twenty years, translating into an unlevered internal rate of return exceeding 20%. Additionally, organic growth initiatives or selective acquisitions could further enhance its value proposition. Should the valuation gap persist, strategic alternatives including a potential sale could come into play, further underpinning the attractiveness of the stock at recent valuation levels.

In sum, Polaris Renewable Energy offers investors a stable business model with meaningful optionality. Its strong cash flow, deeply discounted valuation, and clear strategic pathways position the company as an attractive opportunity, presenting multiple routes to potential upside over the next two years.

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About the instructor:

Shawn Kravetz is President and Chief Investment Officer of Esplanade Capital LLC, an investment management company he founded in 1999. Esplanade Capital LLC manages capital for a small number of like-minded families, private investors, and institutions.

Prior to founding Esplanade, Shawn was a corporate executive and strategic advisor, including: Principal at The Parthenon Group, a leading strategy consulting boutique, where he advised chief executives on corporate strategy; Director of Strategic Planning and Corporate Development at The CML Group (NYSE traded), where he oversaw activities at subsidiaries including NordicTrack, The Nature Company, and Smith & Hawken; Consultant with Monitor Company, a leading strategy consulting firm.

Shawn received an MBA with High Distinction from Harvard Business School in 1995, where he was awarded: The Thomas M. and Edna E. Wolfe Award; The Henry Ford II Scholar Award; and a Baker Scholarship. Shawn received an A.B. in Economics from Harvard University, magna cum laude, in 1991.

Shawn has been active in his community, having served as: Steering Committee Vice Chairman of The Museum of Fine Arts Council at The Museum of Fine Arts Boston; Member of the Steering Committee of The Vilna Center for Jewish Heritage; and Treasurer of the PTO for the Frances Jacobsen Early Education Center.

Shawn currently serves as Trustee and Chairman of the Investment Committee at Temple Israel, Boston.

The content of this website is not an offer to sell or the solicitation of an offer to buy any security. The content is distributed for informational purposes only and should not be construed as investment advice or a recommendation to sell or buy any security or other investment, or undertake any investment strategy. There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information set forth on this website. BeyondProxy’s officers, directors, employees, and/or contributing authors may have positions in and may, from time to time, make purchases or sales of the securities or other investments discussed or evaluated herein.

Clearwater Analytics: Wide Moat in Investment Operations SaaS

July 18, 2025 in Audio, Diary, Discover Great Ideas Podcast, Equities, Ideas, Member Podcasts, Wide-Moat Investing Summit 2025, Wide-Moat Investing Summit 2025 Featured

Charles Hoeveler of Norwood Capital Partners presented his investment thesis on Clearwater Analytics (NYSE: CWAN) at Wide-Moat Investing Summit 2025.

Thesis summary:

Clearwater Analytics, founded in 2004 and headquartered in Boise, Idaho, is a leading provider of enterprise SaaS solutions for investment operations, recently valued at $7.5 billion enterprise value and $6.7 billion market capitalization. The company’s cloud-native, multi-tenant architecture, built around a single security master across front, middle, and back-office functions, positions it distinctively in the $23 billion and growing investment operations software market. Its competitive advantages include exceptional customer retention (\~98% gross retention), robust net revenue retention (~115%), and consistently high customer satisfaction scores (+60-65 NPS).

Clearwater’s merger with Enfusion creates a combined platform uniquely capable of addressing the full investment lifecycle — from front-office order management and portfolio construction to middle and back-office accounting and reporting. The strategic rationale behind this combination lies in Clearwater’s established excellence in middle and back-office functionalities and Enfusion’s superior front-office solutions, notably in portfolio management systems and real-time data analytics. Integrating these two complementary cloud-native platforms creates the potential for significant market share gains and margin expansion, effectively forming a comprehensive investment operations solution that legacy providers such as SS&C, SimCorp, and BlackRock Aladdin currently lack.

The company’s technological edge centers around its highly scalable and secure single-security master architecture, facilitating accurate, reconciled real-time data across accounting, risk, compliance, and reporting workflows. Clearwater’s investment in artificial intelligence, through the Clearwater Intelligent Console (CWIC), further enhances its competitive position by automating reconciliation, anomaly detection, risk modeling, compliance monitoring, and advanced analytics. These advanced capabilities not only strengthen Clearwater’s moat but also offer differentiated value to institutional asset managers, insurers, and corporate treasuries facing increasing complexity in investment operations.

From a financial perspective, Clearwater has delivered impressive organic growth exceeding 20%, driven by robust incremental EBITDA and free cash flow margins. The company’s disciplined execution and integration roadmap for Enfusion promise even stronger operational leverage and earnings growth. With Clearwater recently trading around $22.40 per share, applying its historical 28x forward EBITDA multiple suggests a potential share price in the mid-$40s by 2027, translating to a compelling internal rate of return (IRR) in the low-30% range.

Overall, Clearwater Analytics represents an attractive long-term investment opportunity, combining high growth potential, significant market opportunity, and a defensible competitive moat reinforced by proven technology, exceptional management, and strategic integration of complementary capabilities.

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About the instructor:

Norwood Capital Partners, LP is a concentrated, fundamental value-based long/short investment fund. Norwood relies on primary research to build a portfolio of dominant businesses trading at a discount to intrinsic value. Norwood is managed by Charles Hoeveler, with 20+ years of experience in institutional asset management.

Kadokawa: Media Leader Capitalizing on the Anime and Manga Boom

July 9, 2025 in Asia, Audio, Discover Great Ideas Podcast, Equities, Ideas, Member Podcasts, Transcripts, Wide Moat, Wide-Moat Investing Summit 2025, Wide-Moat Investing Summit 2025 Featured

Clement Loh of Lion Rock Partners presented his in-depth investment thesis on Kadokawa Corporation (Japan: 9468) at Wide-Moat Investing Summit 2025.

Thesis summary:

Kadokawa is a leading Japanese entertainment conglomerate with diversified operations spanning publishing, film and TV production, video games development, and digital content services. Founded in 1945, Kadokawa has evolved from a traditional publishing house into a fully integrated entertainment company, capitalizing on its extensive intellectual property (IP) portfolio, which includes manga, light novels, anime, and films. Its strategic advantage lies in its vertical integration, allowing it to effectively monetize content across multiple platforms and channels, driving a broad and robust revenue stream.

The company is uniquely positioned to benefit from increasing global demand for Japanese content, supported by its strong IP assets and cross-media monetization strategy. Kadokawa’s IP is particularly appealing due to its complex storylines, detailed world-building, and visually distinctive art styles, all of which have universal appeal and strong international growth potential. With the Japanese government setting ambitious targets for cultural exports — aiming for ¥10 trillion by 2028 and ¥20 trillion by 2033 — Kadokawa is well-placed to capture a significant portion of this growth through expanded global distribution channels and strategic partnerships with major streaming platforms like Netflix.

Kadokawa is undergoing a digital transformation, shifting towards higher-margin digital platforms and recurring revenue streams, while modernizing its existing digital offerings. Initiatives such as enhanced user analytics, platform redesign, multi-language support, and direct e-commerce integration are expected to significantly enhance user experience and expand international reach. This transition is anticipated to drive long-term margin improvements and sustained revenue growth.

Kadokawa shares recently traded at a valuation of approximately 25.4x earnings and 12.3x EV/EBITDA, reflecting growth expectations but still appearing attractive relative to peers. A sum-of-the-parts valuation and discounted cash flow analysis suggest meaningful upside potential. Moreover, Kadokawa’s strategic value as an acquisition target for global media conglomerates and technology companies adds another layer of potential value realization. Notably, Sony previously acquired a 10% stake, emphasizing Kadokawa’s strategic importance in the broader global entertainment landscape.

However, investors must consider several risk factors, including cybersecurity vulnerabilities highlighted by a past hacking incident, international IP protection challenges, potential capital misallocation risks exemplified by the costly cultural museum project, and execution risk inherent in international expansion initiatives. Nonetheless, the combination of robust IP assets, global content demand growth, ongoing digital transformation, and potential strategic interest from larger entities creates a compelling investment proposition with substantial upside.

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About the instructor:

Clement Loh is the Investment Manager of Lion Rock Partners, a private family fund based in Hong Kong. The fund applies the principles of value investing to seek out companies with competitive advantages selling at a reasonable price with a focus on emerging Asian markets and smaller companies. Clement holds a master’s degree in business administration from the University of Toronto and a degree in pharmacy. Prior to entering the investment profession, Clement worked in the pharmaceutical industry and is a non-practicing pharmacist. His interests include economics, strategy, science, education and history.

The content of this website is not an offer to sell or the solicitation of an offer to buy any security. The content is distributed for informational purposes only and should not be construed as investment advice or a recommendation to sell or buy any security or other investment, or undertake any investment strategy. There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information set forth on this website. BeyondProxy’s officers, directors, employees, and/or contributing authors may have positions in and may, from time to time, make purchases or sales of the securities or other investments discussed or evaluated herein.

LPL Financial: The Operating System for US Wealth Management Advisors

July 9, 2025 in Audio, Discover Great Ideas Podcast, Equities, Ideas, Member Podcasts, Transcripts, Wide Moat, Wide-Moat Investing Summit 2025, Wide-Moat Investing Summit 2025 Featured

Diego Grove of LRZ Capital presented his investment thesis on LPL Financial (US: LPLA) at Wide-Moat Investing Summit 2025.

Thesis summary:

LPL Financial is the largest independent broker-dealer in the United States, providing essential front-, middle-, and back-office support to approximately 29,500 advisors managing over $1.8 trillion in assets. Formed from the merger of Linsco and Private Ledger in 1989, the company serves the expansive $31 trillion U.S. advisor-mediated marketplace. LPL’s scalable business model, characterized by robust incremental returns, has allowed the company to capture significant market share from competitors, with notable penetration in both independent and institutional channels. The firm recently traded at a market capitalization of approximately $29 billion with net debt of $5 billion.

LPL operates an asset-light model with a favorable financial profile, characterized by EBITDA margins nearing 47%, high 30s return on equity, and incremental ROIC ranging from mid-20s to mid-30s. Revenue growth is underpinned by organic growth of 7%-13%, market-driven returns of 2%-4%, and incremental contributions from strategic M&A or share buybacks. This model has enabled mid-to-high teens EPS CAGR, supported by a historically high retention rate of 98%+. Despite significant past performance — including an eight-fold increase in stock value over the past decade — the company remains poised for growth, especially given its undermonetized gross profit ROA of just 29 basis points.

The strategic leadership of CEO Rich Steinmeier and CFO Matt Audette has substantially transformed LPL’s operations, emphasizing capital efficiency, prudent acquisitions, and operational leverage. Recent strategic acquisitions such as Commonwealth Financial Network and prudent expansions in the enterprise channel underscore management’s disciplined capital allocation framework. These acquisitions not only expand the firm’s asset base but also solidify its competitive advantage through economies of scale, improved compliance capabilities, and enhanced advisor retention.

A critical variant view articulated in the thesis is that LPL Financial’s superior business model and competitive positioning within the advisor-mediated space remain significantly undervalued. Market concerns, primarily revolving around cash sorting and regulatory scrutiny on client cash balances, appear overstated. The management’s proactive measures and strong treasury management capabilities significantly mitigate these risks. Furthermore, LPL’s diversified revenue streams and fee-based advisory services continue to demonstrate resilience, presenting potential valuation upside.

Given its compelling earnings trajectory, prudent management, and robust competitive moat, LPL Financial offers an attractive risk-reward profile. Management’s clearly articulated earnings growth algorithm forecasts EPS growth of 11%-27%, with potential for higher valuation multiples. Conservatively projected, investors may achieve a ~15% IRR over the next five years, assuming reasonable exit multiples. Thus, LPL Financial represents a high-quality, high-convexity investment opportunity benefiting from sustained structural tailwinds in the independent advisor space.

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About the instructor:

Diego Grove is a Partner, CEO, Portfolio Manager and Business Development strategist at LRZ Capital, an investment management firm that deploys thoughtful long-term capital into public and private markets. In the past, Diego led Megeve Investments International and remains a member of Megeve Investments VC and SAA committees. Diego started his career studying Latin American businesses, in both equity and distress credit markets. Prior to rejoining Megeve, Diego worked for Orbis Investment Management, Triarii Capital and Linzor Capital Asset Management. Diego is a former rugby player, soccer coach and restaurateur, and is now an enthusiastic runner, avid travel surfer and podcast nerd. He recently relocated from New York to Miami. Diego received a B.S. from Pontificia Universidad Catolica de Chile an MSc in Finance from the same University and an MBA and a Sustainability Certificate from M.I.T. Sloan School of Management.

The content of this website is not an offer to sell or the solicitation of an offer to buy any security. The content is distributed for informational purposes only and should not be construed as investment advice or a recommendation to sell or buy any security or other investment, or undertake any investment strategy. There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information set forth on this website. BeyondProxy’s officers, directors, employees, and/or contributing authors may have positions in and may, from time to time, make purchases or sales of the securities or other investments discussed or evaluated herein.

Boston Beer: Inflection Opportunity at America’s Largest Craft Brewer

July 9, 2025 in Audio, Discover Great Ideas Podcast, Equities, Ideas, Member Podcasts, Transcripts, Wide Moat, Wide-Moat Investing Summit 2025, Wide-Moat Investing Summit 2025 Featured

Chris Crawford of Crawford Fund Management presented his investment thesis on Boston Beer Company (NYSE: SAM) at Wide-Moat Investing Summit 2025.

Thesis summary:

Boston Beer Company is the largest American-owned alcoholic beverage company, holding leading positions across several niche segments including craft beer, hard cider, flavored malt beverages, and hard seltzers. After enduring significant headwinds following the burst of the hard seltzer bubble in recent years, Boston Beer now presents compelling turnaround potential. The company’s founder-led management team has demonstrated a long history of effective innovation and successful operational recoveries, positioning the firm well to capitalize on emerging growth drivers.

Recent product launches, notably Sun Cruiser and Sam’s American Light, have shown promising early traction. Sun Cruiser, positioned against High Noon in the vodka tea segment, has successfully doubled its market share since its initial launch. Sam’s American Light, launched nationwide in 2025, is strategically aimed at the massive mainstream light beer segment, potentially extending brand equity beyond traditional craft beer boundaries. Although the growth potential of another product, Hard Mountain Dew (a collaboration with Pepsi), is less certain, these new product introductions significantly enhance the company’s growth profile.

Boston Beer’s competitive advantages are underpinned by robust brand recognition, a resilient nationwide distribution network, regulatory barriers to entry, and significant economies of scale. Despite these strengths, periodic market disruptions — such as the craft beer and hard seltzer downturns — have historically impacted its trajectory. Nevertheless, these disruptions have been followed consistently by recoveries and renewed growth, demonstrating the company’s resilience and adaptability.

Financially, Boston Beer maintains a debt-free balance sheet, allowing significant flexibility for internal investments and opportunistic repurchases of undervalued shares. Management’s disciplined share repurchase strategy, buying back stock at substantial discounts to intrinsic value, further underpins shareholder value creation. Founder Jim Koch, who owns 20% of the company, remains actively involved and deeply committed to long-term strategic growth, underscoring a strong alignment of interests with shareholders.

Recently, Boston Beer shares traded significantly below intrinsic value estimates, down approximately 85% from their 2021 highs. Chris’s valuation suggests substantial upside potential, assigning a blended appraisal value of $302 per share, reflecting a 60% base case scenario. Given the embedded optionality of Boston Beer’s innovative R&D pipeline, robust balance sheet, and historical valuation ranges, upside scenarios could be considerably higher, positioning the company as both an undervalued turnaround story and a potential acquisition target.

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About the instructor:

Chris Crawford is the Managing Partner and Chief Investment Officer of Crawford Fund Management, LLC, a Boston-based Investment Partnership. The firm manages a long/short fund that invests in equities and options with an emphasis on underfollowed public companies. Prior to co-founding Crawford Fund Management in 2009, Chris was Managing Director, Portfolio Manager and head of the Boston office with Stark Investments, a $10B multi-strategy global hedge fund. At Stark, Chris built the firm’s equity long/short team and managed $1.5B in equity long/short assets as well as a $200M short-biased portfolio. From 2003-2006, Chris was Senior Vice President and Portfolio Manager with Putnam Investments, and co-Portfolio Manager of the $3B Putnam International Capital Opportunities Fund and related client accounts. From 2000 to 2003, Chris was a Partner and Senior Analyst with ABRY Partners on a team managing a $400M TMT-focused hedge fund. From 1996 to 2000, Chris was with Wellington Management Company, where he served as a Global Industry Analyst covering the media industry and as a Portfolio Manager for $600M in client sector-fund and institutional assets. Chris holds an MBA from The Wharton School of Business and graduated magna cum laude from University of Pennsylvania with a BA in Physics, BS in Economics, BAS in Systems Engineering and an MA in International Relations.

The content of this website is not an offer to sell or the solicitation of an offer to buy any security. The content is distributed for informational purposes only and should not be construed as investment advice or a recommendation to sell or buy any security or other investment, or undertake any investment strategy. There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information set forth on this website. BeyondProxy’s officers, directors, employees, and/or contributing authors may have positions in and may, from time to time, make purchases or sales of the securities or other investments discussed or evaluated herein.

Dave Sather on Building an Enduring Financial Advisory Firm

July 9, 2025 in Audio, Building a Great Investment Firm, Equities, Featured, Full Video, Interviews, Transcripts

We had the pleasure of speaking with Dave Sather, founder and CEO of Sather Financial Group, based in Victoria, Texas. Sather Financial is a “fee-only” financial planning and investment management firm responsible for overseeing more than $2 billion in client assets.

In this conversation, Dave shares key insights into building a successful financial advisory firm, navigating client relationships, and cultivating long-term value investing principles. Celebrating over 26 years at the helm of Sather Financial Group, Dave brings a wealth of practical experience and thoughtful perspectives to investors seeking to deepen their understanding of how to establish and sustain an advisory business grounded in trust and long-term growth.

Dave’s journey began in the modest setting of Victoria, Texas, shaped by a desire to balance personal and professional life, a decision spurred by family commitments. His candid reflections on the early challenges of cold-calling and the realization that traditional brokerage models didn’t align with his value-investing principles offer powerful lessons for aspiring financial advisors. Dave emphasizes the importance of authenticity and maintaining a clear moral compass in serving clients, often noting that great advisory relationships are built not just on financial acumen, but on understanding and addressing the comprehensive needs of wealthy individuals, from tax and estate planning to retirement and risk management.

Central to Dave’s approach is transparent, direct communication. He describes the meticulous attention he and his team give to client relationships, advocating for managing separate accounts rather than pooled funds to ensure transparency and foster lasting trust. His commitment extends beyond financial strategy, touching on behavioral finance — highlighting the need to help clients navigate not only market volatility but also their emotional responses to financial decisions.

Moreover, Dave shares valuable insights into his firm’s internal practices, such as profit-sharing and peer evaluations, which cultivate a cohesive, motivated team environment. He also outlines his thoughtful approach to succession planning, underscoring the importance of giving talented team members ownership stakes to ensure continuity and shared success.

Finally, the interview touches on Dave’s passion project, Bulldog Investment Company at Texas Lutheran University, highlighting his commitment to mentorship and education. This successful program underscores his broader philosophy and his dedication to nurturing the next generation of investors.

The interview was conducted by Tyler Howell of MOI Global.

Topics and themes:

  • Early Career and Founding Sather Financial
  • Client Relationships and Communication
  • Behavioral Finance and Client Education
  • Building a Cohesive Team and Firm Culture
  • Succession Planning and Ownership Transfer
  • Insights into Practical Value Investing
  • The Bulldog Investment Company Story

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About the interviewee:

Dave Sather is a CFP and the CEO of Sather Financial Group, a $2 billion firm managing individual accounts  headquartered in Texas. Dave has degrees in business from Texas Lutheran University and Texas A&M University. Dave serves on the Board of Regents at Texas Lutheran University, chairing the Investment Committee. He developed and teaches the Bulldog Investment Company internship at Texas Lutheran University (www.BulldogInvestmentCo.com). This student managed investment fund has compounded at 15.4% per year over the last 15 years outperforming the S&P 500 by 264 percentage points. Recently, the program was recognized as the top student led business program by the Accreditation Council for Business Schools and Programs, which oversees more than 1,200 programs internationally. Dave also created and runs the Big Dog Endowment program (www.BigDogEndowment.com) , also at TLU, which teaches analytical and business skills for non-profit and philanthropic endeavors.

The content of this website is not an offer to sell or the solicitation of an offer to buy any security. The content is distributed for informational purposes only and should not be construed as investment advice or a recommendation to sell or buy any security or other investment, or undertake any investment strategy. There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information set forth on this website. BeyondProxy’s officers, directors, employees, and/or contributing authors may have positions in and may, from time to time, make purchases or sales of the securities or other investments discussed or evaluated herein.

Noah Snyder on Value Investing in Programmatic Acquirers

July 2, 2025 in Case Studies, Diary, Equities, Featured, Idea Appraisal, Idea Generation, Interviews

We had the pleasure of interviewing Noah Snyder, founder of Snoboll Capital.

Few investors are as intensely focused on the compounding power of disciplined M&A as Noah Snyder. With a background spanning hedge funds, global small-cap investing, and the Columbia Business School Value Investing Program, Snyder has spent over 20,000 hours studying what he calls “programmatic acquirers” — companies that use repeatable, high-ROIC acquisition strategies as a core operating capability.

In this interview, Snyder shares his investment philosophy, why he focuses on overlooked regions like Sweden and the Nordics, and how programmatic acquirers differ from the often-misunderstood “serial acquirer” model. He also introduces lesser-known but high-potential companies such as Bergman & Beving and Chapters Group, and offers reflections on the enduring influence of Warren Buffett, Charlie Munger, and the power of proper capital allocation.

Ezra Crangle, MOI Global: Tell us about your professional background and how the idea to launch Snoboll Capital came about.

Noah Snyder: I’ve been obsessed with the stock market since I was a teenager, and from early in my career, my goal was to build a better mouse trap than what most other investment managers were doing. I started my career on the buyside at a family office just as they opened to outside capital. Then after finishing my MBA at Columbia Business School and partaking in its Value Investing Program, I joined a hedge fund just as it launched so I could gain the experience of building a fund from scratch. This hedge fund went on to be Barron’s Top 100 fund and grew to over US$1 billion in AUM. As the firm’s #2 investment professional, I helped develop and lead its mental-model-based research approach and I was named an Institutional Investor Hedge Fund Rising Star. Yet more than ten years ago a clear pattern emerged: my biggest winners were all “programmatic acquirers” or companies that compound capital by combining organic growth with highly disciplined acquisition playbooks where management had a lot of skin in the game.

This led to many winners like Constellation Software (CSU), TransDigm (TDG) and Danaher (DHR) and I saw how powerful this strategy was mostly in large U.S. listed companies. However, I believed that even higher risk-adjusted returns could be achieved by finding these companies earlier in their lifecycle in more inefficient markets. This inspired me to join a leading international small-cap team at a US$250 billion mutual fund, where I proved that the strategy worked even better outside the U.S., and especially in Sweden. After more than 20,000 hours of studying public programmatic acquirers globally, I became convinced this opportunity was too compelling to pass up and there was no other way to pursue it.

In 2023, I launched Snoboll Capital with a clear vision: to own a concentrated portfolio (~15 longs) of the world’s best programmatic acquirers globally. At Snoboll we apply our Snöboll Roll-Up Framework to find companies with long reinvestment runways, decentralized cultures, and aligned owner-operators who can acquire niche, high-quality businesses at attractive prices. These companies often improve the businesses they buy, enhance margins, accelerate growth, and reinvest the resulting cash flows back into more M&A creating a true “snowball” effect. This approach provides exposure to three engines of value creation: 1) organic growth; 2) acquisitions; and 3) valuation expansion. Since launch, our results have been rewarding, and we believe Snoboll is uniquely positioned to outperform as we’ve developed expertise in a niche part of the market that consistently outperforms.

MOI: There’s often confusion between “programmatic acquirers” and “serial acquirers.” What’s the difference between the two?

Snyder: We make a clear distinction between programmatic and so-called “serial” acquirers. The term “serial” carries negative connotations for good reason. These are companies that simply do many deals. They pursue one-off, haphazard deals, often relying on financial engineering with little discipline, integration, or repeatability. More often than not, they destroy returns on capital. Which is great because it scares many investors away from companies that grow through acquisitions altogether.

However, in contrast, “programmatic acquirers” treat M&A as a core competency. They pursue several small, bite-sized deals each year using repeatable playbooks and robust business systems. The best ones are what we call Advantaged Acquirers, buyers of choice even when they don’t offer the highest price, often because sellers prefer to stay on and keep building their businesses. In turn, their acquisition process is more akin to a high-quality manufacturing operation, with value creation embedded across every phase from deal sourcing to post-close optimization. For us, great capital allocation is the true north, and programmatic M&A is the best expression of it.

Programmatic acquirers are a rare breed of companies that build acquisitions into their DNA. They use disciplined playbooks and scalable business systems to consistently buy and improve companies, often at 5–7x EBITDA, and can sustain 15–20% ROICs. They are relentlessly focused on cash flow, returns on capital, and aligned incentives. As they grow, they become flywheels, spitting off increasing cash that fuels further M&A and they solve the two biggest challenges in compounding: reinvestment rate and reinvestment duration.

We recently partnered with a second-year MBA in Columbia’s Value Investing Program to conduct an Independent Study on the ~250 programmatic acquirers in Snoboll’s universe. The results reinforced what we believed: these companies consistently outperform, especially when identified early. Yet markets struggle to value their long-duration compounding as most growth stocks see fading growth and ROICs overtime. When done well, programmatic acquirers can maintain high ROICs and for long periods. They control their own destiny, are less macro dependent and benefit from a large public/private valuation arbitrage that can be exploited over and over again.

MOI: You describe your approach as “a global investor in great CEOs and acquisition-focused companies.” Could you walk us through your investment philosophy at Snoboll Capital?

Snyder: At Snoboll Capital, our investment strategy is built to create a “Lollapalooza” effect where multiple reinforcing pillars work together to drive outsized returns. We concentrate capital in our highest-conviction ideas rather than hugging benchmarks. We operate with a clear circle of competence: exceptional CEOs and programmatic acquirers. Our process is anchored in codified pattern recognition tools, aka “Frameworks” especially our Snöboll Roll-Up Framework, which allows us to identify high-quality companies early in the value creation journey. On top of this, we emphasize game selection or playing the games/markets that are easiest to win. We gravitate towards smaller companies with less institutional ownership at meaningful inflection points. Our edge is magnified outside of the US, where informational advantages are greater and investor competition is less pronounced.

The fund’s name is in Swedish which reflects our focus and expertise in Sweden, an overlooked market that serves as a hot bed for skilled programmatic acquirers. We complement our longs with shorts focused three specialized frameworks: 1) Competition Shorts; 2. Cyclical/Commodity Peaks; 3) and Spin-off Shorts. Together, our approach combines deep specialization, global breadth, and structural edge. Ultimately, we’re hunting for the next Danaher, Constellation Software, or Roper, elite companies led by exceptional managers that can be worth multiples of their current value and we continue to believe that we are witnessing a once-in-a-decade to find these companies on the cheap outside of the US.

MOI: Constellation Software is one of the best-known examples of a programmatic acquirer. Could you tell us about one or two lesser-known companies that you find particularly interesting?

Snyder: We prefer not to widely publicize our holdings, as Buffett says, “great ideas are both rare and subject to competitive appropriation,” but we’re happy to highlight two under-the-radar programmatic acquirers that embody Snoboll Capital’s strategy.

The first is Bergman & Beving (B&B), a ~US$1 billion market cap Swedish industrial group undergoing a powerful transformation. While it’s been called “the ancestor of stock market rockets” by Dagens Industri due to the massive success of its spin offs, B&B itself had stagnated. That was until 2021. when Magnus Söderlind, former Head of M&A at Lagercrantz, took over as CEO. He’s now executing the exact same playbook that underpinned Lagercrantz’s 2,000%+ return (30%+ CAGR) during his tenure. Since Magnus arrived B&B has been divesting its legacy low-margin distribution businesses and acquiring proprietary product companies with 15%+ EBITDA margins at just 6–7x EV/EBITDA. Despite negative organic growth from portfolio pruning and cyclical headwinds tied to construction end markets, EBITDA is up ~30% over the last two years and gross margins have expanded 700bps+. Moreover, incremental capital has generated ~20% returns, which should continue to bolster its ROIC, and in turn its valuation.

We believe B&B is still deeply misunderstood and undervalued, trading at a ~40% discount to its sister companies. But Söderlind is leveraging business systems like its “Tool Box” and its “Focus Formula,” to drive value creation at its decentralized subsidiaries. Its recent divestment of Skydda (~10% of revenues) removes most of the remaining legacy drag and management now targets ~8 high-margin acquisitions per year. We believe B&B can double EBIT in four years, resulting in much higher than expected earnings. With a robust pipeline, visible catalysts, and a proven operator at the helm, B&B is a quintessential Snoboll Capital investment entering the steep part of its compounding curve.

The second is Chapters Group (CHG GR), a ~US$1.1 billion German-based vertical-market-software (VMS) acquirer. Its quietly becoming one of Europe’s most promising compounders. Originally a defunct healthcare IT firm, it has been transformed under Jan-Hendrik Mohr, a Buffett disciple, and now full-time owner-operator. Its largest investors include Mitch Rales (Danaher’s founder), Sator Grove, MIT, and William Thorndike, an All-Stars team of capital allocators. Since 2019, when Chapters began its programmatic acquisition journey they’ve done ~50 acquisitions and it now generates more than €165 million in run-rate revenues and more than €40 million in EBITDA (~25% margins). However, it still trades in obscurity on the junior exchange in Germany. Mitch Rales has said publicly that he believes Chapters could be a 50–100x return and Rales has also said he thinks that they can build an even better version of Constellation Software, with more organic growth, and he is coaching its CEO Jan Mohr.

Chapters is institutionalizing its business system (“Manuscript Model”) modeled after DBS and building a structure that’s similar to Constellation Software’s platform. What makes Chapters truly special is that they have highly recurring, mission-critical revenue streams with strong pricing power and low capital needs. This means that most of its revenue growth can be converted to cash for deals and macro conditions should have little impact to earnings. Also, ROIC per share is their main KPI which creates a cash flow–obsessed culture. Recent additions like COO Marc Mauer, who led one of CSU’s platforms, further put odds in our favor. This year organic growth is expected to inflect towards mid-teens. Over time, we expect Chapters to scale to 15–20 platforms and for EBITDA margins to reach >35%. Despite its strong recent performance, Chapters is still early in its journey.

Both companies reflect what we specialize in at Snoboll: programmatic acquirers that have compounding flywheels of value creation. In both cases, time is our friend as higher earning power should be rewarded with higher valuations.

MOI: I understand that your investment philosophy has been strongly influenced by Warren Buffett and Charlie Munger. What key lessons have you learned from them, both in investing, business, and life?

Snyder: Snoboll Capital was named after Warren Buffett’s famous metaphor for compounding: “It was like rolling a snowball down a hill, what started as a small handful eventually grew bigger and bigger.” Our mission is to generate wealth that like a Snöboll (“snowball” in Swedish), compounds as it grows.

Berkshire Hathaway may be the best programmatic acquirers of all time. Their influence shows in our preference for decentralized companies with systems that scale, leaders who think like owners, and cultures which ensure a strong focus on returns on capital. But it’s Munger’s thinking which underpins more of Snoboll’s philosophy. His emphasis on simplicity, the power of incentives, and usage of mental models are all key tenets of our strategy. Moreover, we focus on a deceptively simple but powerful idea: programmatic acquirers. As Munger said, “Take a simple idea and take it seriously.” We’ve done exactly that.

MOI: In addition to investing in the United States, you also focus on Sweden, the Nordic markets, the United Kingdom, and Australia. Why did you choose to concentrate on these regions instead of, for example, Asia or continental Europe?

Snyder: We invest in what we deem to be the 10-15 best risk/reward wherever they are in the developed world. While most funds remain U.S. —centric, ~95% of our longs are currently invested internationally, primarily in Sweden, the Nordics, the UK, and Australia. There are markets that have the best performing stocks and long histories of programmatic acquirers which have generated significant alpha. Also, these markets have strong rule-of-law and corporate governance. In these markets we find underfollowed, high-quality small/mid-sized compounders at much lower valuations.

Currently, the valuation gap between U.S. and international equities is near a 50-year high and there is extreme crowding as U.S. equities make up ~70% of global market cap, levels last seen in the late 1960s. This was followed by two decades of U.S. underperformance. While history doesn’t repeat perfectly, this context is helpful. A potential turning point is the end of Europe’s austerity as Germany recently unveiled its €1 trillion “bazooka” and Trump is providing global investors reasons to look elsewhere.

Sweden stands out as it is where we have the most differentiated edge. At one time I was probably the largest US investor in the Swedish stock market. It’s also the market with the highest concentration of programmatic acquirers in the world. Yet many Swedish stocks trade at discounted valuations mainly due to structurally lower levels of liquidity. This illiquidity discount allows Snoboll to buy better quality companies at cheaper valuations, before they are large and liquid enough for larger institutions, like the one we once worked for, can buy the stock.

Over the years, we’ve built deep credibility in Sweden. In Q1 2025, Snoboll Capital was one of the few U.S. funds invited as a Cornerstone investor in Röko Group’s IPO, Sweden’s most anticipated listing in years. Our specialization gives us access that even larger firms can’t replicate. We avoid Southern Europe and emerging markets, where M&A often reflects empire-building, governance is weaker, and few companies have excelled at acquisitions.

MOI: When it comes to companies that grow through acquisitions, the CEO’s leadership is critical. What skills do you believe are essential for a CEO leading this type of company?

Snyder: At Snoboll Capital, we look for a very specific type of CEO. We gravitate towards those who build enduring institutions and strong cultures, not just earnings per share. These CEOs are often operators first, and capital allocators second. They have meaningful amounts invested alongside shareholders and they have a maniacal 24/7 focus on value creation. They’re disciplined, long-term, and rather than simply chasing growth, they obsess over return on capital and cash flows which are the lifeblood of programmatic acquirers.

They institutionalize excellence and focus intensely of employee development, decentralization, and heavily aligned incentives. They build business systems, proprietary playbooks and focus on continuous improvement rather than long term guidance. These companies create loyal, empowered employees, which enables organizations to scale while preserving culture and performance.

Finally, the best ones are humble and honest, rarely flashy or promotional. The best leaders know that culture isn’t just a byproduct. it’s a strategic asset that enables them to generate higher returns. Above all they “get it” and know how to get the Snoboll rolling.

MOI: What advice would you give to our community of investors who are always striving to “be a little wiser every day”?

Snyder: Be a generalist at the start of your career, if possible. Consider each investment part of your continuous improvement. Journal about what you learned from your mistakes. Also, I believe investors should focus WAY more on slugging percentage, not just batting average. Knowing what to own isn’t enough, you need to use position sizing to your advantage. Just like a blackjack player who is counting cards… bet big when you have a great opportunity. Position sizing is the key driver for both returns and risk management in our portfolio. Lastly, stay balanced, you’re never as smart, or as dumb, as you think you are.

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