In this episode we speak to Oddbjørn Dybvad, co-founder of REQ Capital, an Oslo-based investment firm.  Oddbjørn manages REQ’s Global Compounders and Nordic Compounders funds, which focus on acquisition-driven businesses.  We discuss the entrepreneurial energy within these companies, why they are able to reinvest capital at attractive rates for a long period of time and how their diversified and decentralised nature makes them both resilient and adaptable.

 Show notes:

[01:22 ] Oddbjørn discusses his career
[02:26 ] The risk and return characteristics of acquisition-driven compounders
[04:25 ] The influence of geography
[07:01 ] Defining the different types of serial acquirer
[09:12 ] Focusing on small/mid-caps with a long runway for redeploying capital
[10:41 ] The diversification benefits of acquisition-driven companies
[12:11 ] A preference for insider ownership, decentralisation and acquisitions funded by cash
[13:29 ] Communicating with investors in a different way
[14:53 ] Key person risk and the sustainability of culture
[16:28 ] Change at Diploma
[18:07 ] Harnessing entrepreneurial energy through decentralisation
[20:43 ] Decentralisation and adaptability
[21:59 ] Motivating behaviour through simple incentivisation structures
[24:52 ] Focusing on track record and management
[25:56 ] Constellation Software and the decentralisation of capital allocation
[28:07 ] The valuation differential between public and private markets
[30:51 ] The attractions of selling to acquisition-driven compounders
[33:06 ] Looking for the dual engine of organic and inorganic growth
[35:04 ] The underlying characteristics of REQ Global Compounders
[37:13 ] Becoming more conscious about evaluating risk and management
[39:07 ] Finding people who are process-oriented and have a long-term mind-set
[39:55 ] Learn from your mistakes