There are capital allocation mistakes that even the smartest management teams commit.The primary role of management in a company is simple: Provide shareholders with the best rate of return. This requires operational excellence, profitability, and most importantly, the prudent allocation of capital.Reaching the helm of a listed company is the pinnacle of professional ambition for many people, and therefore only the very smartest people in the world are selected to be leaders of listed companies.Yet despite ...

Core Viewpoint - Constellation Software's Lumine Group has successfully acquired Synchronoss Technologies, a company with over twenty years of experience serving global operators [1] Group 1 - The acquisition was completed through a wholly-owned subsidiary of Lumine Group [1] - Synchronoss Technologies has a long-standing presence in the market, having served global operators for more than two decades [1]

Core Viewpoint - Capital Planning LLC has initiated a new position in the Akre Focus ETF, acquiring 114,952 shares valued at $7.45 million, indicating a strategic investment move in a concentrated fund [1][2]. Group 1: Investment Details - The new position in the Akre Focus ETF represents 2.1% of Capital Planning's reportable 13F assets under management [3]. - As of January 23, the price of AKRE shares was $62.64, reflecting an approximate 11% decline from the fund's listing in October [3]. - The Akre Focus ETF has a market capitalization of $9.8 billion [4]. Group 2: ETF Overview - The Akre Focus ETF employs a disciplined, fundamentals-driven strategy to select companies with durable competitive advantages and proven management teams [6]. - The fund maintains a concentrated portfolio, focusing on business quality and growth potential to generate long-term value for investors [6][9]. - The fund has a 0.98% expense ratio and has delivered 15.5% annualized returns over three years on a NAV basis [11]. Group 3: Portfolio Composition - The ETF primarily comprises US equities, including common and preferred stocks, warrants, options, and equity-like instruments such as partnership interests and REITs [9]. - As of late January, the top holdings included Mastercard, Brookfield, Constellation Software, Visa, and Moody's, which together account for about 50% of the portfolio [11]. - The fund's strategy appears to accept more variance in exchange for differentiated outcomes, as it adds a concentrated strategy to its predominantly broad index fund and factor ETF assets [10][12].

Core Insights - S.A. Mason has initiated a new position in the Akre Focus ETF, purchasing 45,209 shares for approximately $2.96 million as of December 31 [1][2] - The Akre Focus ETF employs a focused investment strategy targeting companies with sustainable competitive advantages and strong management, aiming for long-term growth [6][9] - The ETF's price as of January 29 is $61.15, reflecting a 10% decline over the past year, contrasting with a 15% gain for the S&P 500 [3][10] Company Overview - The Akre Focus ETF has a market capitalization of $9.14 billion and operates within the financial services sector, specifically in asset management [4] - The fund focuses on high-quality U.S. equities and equity-like instruments, including preferred stocks and REITs, with a disciplined approach to valuation and portfolio turnover [9] Investment Strategy - The ETF prioritizes investments in businesses with proven management teams and attractive reinvestment opportunities, aiming to deliver consistent risk-adjusted returns [6][9] - The portfolio is concentrated, with top holdings including Mastercard, Visa, and Moody's, designed to reinvest at high incremental returns over long cycles [11] Performance Context - Since its launch in October, the Akre Focus ETF has underperformed, falling about 10%, while the S&P 500 has gained roughly 1% during the same period [10] - The concentrated strategy of the ETF is intended to complement broader exposure to mega-cap tech and index funds, suggesting a long-term investment perspective [12]

Core Insights - Lighthouse Wealth Management Inc. initiated a new position in the Akre Focus ETF (NYSE:AKRE) by acquiring 277,954 shares valued at $18.21 million during the fourth quarter [2][3][7] - The new position represents 12.44% of Lighthouse's 13F reportable assets under management, indicating a significant commitment to this ETF [4][7] ETF Overview - The Akre Focus ETF has a market capitalization of $9.8 billion and is categorized under the Financial Services sector, specifically in Asset Management [5] - As of the last market close, shares of AKRE were priced at $64.18 [5] Investment Strategy - The Akre Focus ETF offers a diversified portfolio that includes U.S. equities, common and preferred stocks, warrants, options, convertibles, REITs, and select foreign securities [9] - The ETF employs an actively managed strategy focusing on high-quality businesses with strong shareholder returns and reinvestment opportunities [10] - The fund aims for long-term capital appreciation through a concentrated portfolio of high-conviction holdings, typically maintaining around 10 core positions that constitute about 70% of total assets [12] Historical Context - The Akre Focus ETF is a successor to a long-running mutual fund established in 2009, which transitioned to an ETF format to enhance tax efficiency and transparency while maintaining its investment strategy [11] - The portfolio includes top-weighted companies such as Mastercard, Brookfield, Constellation Software, KKR, and Visa, selected for their durable returns on capital and management quality [12] Portfolio Positioning - Lighthouse's investment in the Akre Focus ETF complements its broader market exposure through other ETFs like QQQ, suggesting that Akre serves as a high-conviction counterweight rather than a direct market substitute [13]

Performance Overview - The Akre Focus ETF's fourth quarter 2025 performance was -2.80%, underperforming the S&P 500 Total Return, which was 2.66% [2] - For the trailing 12-month period ending December 31, 2025, the ETF returned 1.23%, compared to 17.88% for the S&P 500 Total Return [2] Market Context - 2025 exhibited a significant performance disparity between the S&P 500 and the S&P 500 Quality Index, the largest since 1999, with a difference of 445 basis points [5] - The S&P 500's gains were largely driven by "Magnificent 7" mega-cap stocks, which rose nearly 25% in aggregate during 2025, contributing to over half of the S&P 500's return over the past three years [3] Historical Comparison - The performance disparity in 2025 mirrors the market conditions of 1999, where the S&P 500 benefitted from the inclusion of internet companies that did not meet quality markers [4] - From 1998 to 2025, the S&P 500 Quality Index had an annualized return of 10.2%, compared to 8.2% for the S&P 500, illustrating the long-term benefits of quality investing [6] Portfolio Insights - The portfolio faced drawdowns in several holdings, including Constellation Software (down 22.00%), Roper Technologies (down 13.84%), and CCC Intelligent Solutions (down 32.23%), primarily due to valuation multiple compression linked to AI concerns [8] - The narrative surrounding AI has favored tool providers over users, but the company believes that established software businesses will ultimately benefit from AI advancements [9] Investment Philosophy - The company emphasizes a long-term investment approach, focusing on businesses with durable competitive advantages and strong fundamentals, despite short-term market pressures [12] - The strategy involves maintaining cash for high-return opportunities rather than a pro-rata distribution across existing positions, which is a common practice among ETFs [14][15] Sector and Holdings - As of December 31, 2025, the top five holdings included Mastercard (13.3%), Brookfield Corp. (11.2%), and Constellation Software (10.2%) [26] - The sector weightings were heavily concentrated in Financials (56.1%) and Information Technology (20.6%), with cash and equivalents making up 3.1% of the fund [26]

Core Insights - The Akre Focus ETF targets high-quality U.S. companies with strong reinvestment strategies and disciplined portfolio oversight [1][5] - JBR Co Financial Management initiated a new position in the Akre Focus ETF, acquiring 108,793 shares valued at approximately $7.13 million [2][3] Investment Position - The new position represents 2.98% of JBR Co's 13F reportable assets under management (AUM) as of December 31 [3] - As of the latest pricing, AKRE shares are valued at $66.00 [3][4] ETF Overview - The Akre Focus ETF has a market capitalization of $9.97 billion and operates within the financial services sector, specifically in asset management [4] - The ETF emphasizes a concentrated portfolio focusing on business quality, management integrity, and capital reinvestment strength [5][9] Investment Strategy - The fund's strategy involves identifying U.S. companies with sustainable competitive advantages and attractive growth prospects, while also allowing for investments in select foreign securities and alternative equity instruments [5][9] - The Akre Focus ETF recently transitioned from a mutual fund to an ETF format, bringing approximately $10 billion in assets, aimed at improving tax efficiency and transparency [9][10] Market Trends - The initiation of a position in the Akre Focus ETF indicates a growing comfort among investors with actively managed ETFs that differ from traditional index-based products [6][10] - The ETF serves as a quality anchor in investment portfolios, suggesting a broader trend of utilizing ETF formats for high-conviction strategies previously held in mutual funds [10]

Core Insights - The article discusses the investment strategy of Right Tail, emphasizing a long-term approach focused on high-quality businesses rather than chasing short-term trends like artificial intelligence [4][19]. Performance Overview - Since its inception in May 2022, Right Tail's investments have increased significantly, with an initial $1 million growing to approximately $1.36 million under performance fees and $1.39 million under management fees [5]. - The portfolio's value is projected to grow to about $4.75 million in 10 years and $16 million in 20 years at a 13% annual compounding rate, or to approximately $3 million in 10 years and $6.5 million in 20 years at an 8% rate [6]. Market Comparison - In 2025, Right Tail's portfolio increased by approximately 0.34% before fees, lagging behind the S&P 500's 17.8% and the S&P 500 Equal Weight Index's 11.2% [7]. - Over a longer timeframe, Right Tail accounts have increased between 36% and 39%, which is significantly lower than the S&P 500's 79% increase [9]. Market Dynamics - The S&P 500 is increasingly concentrated, with the "Magnificent 7" companies representing 35-40% of the index, leading to a shift towards a large-cap growth index rather than a diversified one [10]. - The S&P 500 Equal Weight Index provides a different perspective, showing how most companies are performing amidst the AI-driven market enthusiasm [11]. Investment Philosophy - Right Tail's strategy focuses on investing in businesses with durable advantages and predictable earnings, aligning with the belief that markets reward such companies over time [19]. - The current market environment is seen as favorable for long-term active management, as passive investing has led to concentration in a few high-performing companies [21]. Specific Holdings - Alphabet (GOOG, GOOGL) has been a significant holding for Right Tail, with the company viewed as undervalued despite its strong performance in the AI sector [16][17]. - Other holdings include Constellation Software (CSU:CA), which is trading at low valuations despite strong fundamentals, and a coal royalty business expected to return substantial cash to shareholders [20]. Learning and Adaptation - The past year has reinforced the importance of patience and continual learning in investment practices, with a focus on improving investment processes over time [23].

Core Thesis - Roper Technologies, Inc. is viewed positively due to its high-margin, recurring software business model and disciplined acquisition strategy, which positions it well for long-term growth and profitability [2][4]. Group 1: Business Model and Strategy - Roper Technologies focuses on acquiring high-quality, asset-light, cash-generative companies in niche markets, similar to Constellation Software but targeting larger, established vertical market software businesses [2]. - The company operates a decentralized model, granting autonomy to individual business units while centralizing cash management at the corporate level [2][3]. - A lean headquarters team strategically deploys centralized cash primarily for acquisitions and R&D, driving organic growth within existing businesses [3]. Group 2: Financial Performance and Valuation - Following a significant decline in share price after a recent earnings report, Roper is now considered attractively valued, presenting a compelling entry point for investors [3][5]. - The company's disciplined capital allocation has allowed it to maintain strong cash flow and margin resilience, continuously expanding its portfolio of high-quality businesses [3][4]. - The market may be underestimating the value of Roper's well-managed, cash-generative businesses, making the current valuation appealing relative to its fundamentals and growth prospects [4]. Group 3: Growth Potential - Roper's combination of autonomous operations and strategic acquisitions supports ongoing organic growth and enhances scale and profitability across its diversified portfolio [4]. - Investors benefit from both the organic growth of existing businesses and the optionality provided by future acquisitions, which have historically contributed to the company's success [4].

Core Insights - Bending Spoons has agreed to acquire Eventbrite for approximately $500 million, significantly lower than its $1.76 billion valuation at the time of its IPO in 2018 [1][5] - Eventbrite's revenue has stagnated, with audited annual revenue remaining flat at about $325 million for both fiscal years 2024 and 2023 [5] Company Overview - Eventbrite was co-founded in 2006 by Julia and Kevin Hartz, and Renaud Visage, raising around $330 million in venture capital from notable investors like Sequoia Capital and Tiger Global Management during its private years [2] - Bending Spoons operates differently from traditional private equity firms, focusing on acquiring companies to hold indefinitely, aiming to make them profitable through cost-cutting, price increases, and new product features [3] Acquisition Details - The acquisition price represents about 1.7 times Eventbrite's trailing twelve months revenue of $295 million [5] - Eventbrite stockholders will receive $4.50 in cash per share, which is an 81% premium over the previous day's closing price of $2.48 [5] Industry Context - Other investors are also pursuing a similar strategy of acquiring and revitalizing stalled software firms, often referred to as "venture zombie" companies, including firms like Constellation Software and Curious [4] - Andrew Dumont, CEO of Curious, indicated that their strategy involves purchasing quality companies at low prices and quickly reviving them to achieve profit margins of 20% to 30% [4]