Title: Adding To Our Portfolio — Topicus, HgCapital Trust and Brown & Brown Show: Compounding Quality (Substack, paid post — compoundingquality.net) Guest: Pieter Slegers / Team Compounding Quality (author; byline "Compounding Quality") Date: 2026-04-30 URL: https://www.compoundingquality.net/p/adding-to-our-portfolio Length: written post — no timestamps Note: Paid-subscriber post captured via Stephen's logged-in session. Body text verbatim; UI chrome removed. Images (the Omaha schedule card, the Berkshire AGM photo, the HgCapital NAV chart and two Fiscal.ai panels) noted inline as [Image — ...]; every figure they carry is stated in the text. Transaction sizes, quantities and limit prices are transcribed exactly as published, including the original's "Q" prefix for quantity and its European decimal points ("$50.000", "3.075").
Dear Partner
As you are reading this, I'll be high in the sky.
Why? I'm flying from Brussels to Omaha to attend the Berkshire AGM.
This will be the fourth year in a row that I attend the Berkshire AGM.
My schedule looks as follows:
[Image — Omaha schedule card]
If you're in Omaha as well, just let me know and you're very welcome to attend the meetup TJ and I are organizing.
When: Saturday 2 May between 8:15 PM and 10:15 PM
Where: Howard & Fine (inside Moe & Curly's Pub and Grill - Omaha)
Register here for free: I want to attend the meeting
The Fairfax Way
As this will be the first AGM since Warren Buffett 'retired', the big question is how Berkshire Hathaway will evolve from here.
I don't think there is a next Berkshire Hathaway out there.
However, there are some companies that come close.
A book I recently read? The Fairfax Way.
The book tells the story of how Prem Watsa copied Berkshire Hathaway's business model and became tremendously successful over time.
[Image — The Fairfax Way book cover]
When Prem Watsa took charge of Faifax in 1985, the company traded at a stock price of 3.25 CAD.
Today Fairfax's stock price equals 2,346 CAD.
That's almost a 1.000-bagger (!).
It's an understatement saying that Prem Watsa has done a tremendous job at Fairfax.
It's no coincidence that people call him the Canadian Warren Buffett.
The shareholder letters of Prem Watsa are a must read. You can find them here.
(I am currently reading them on my flight to Omaha).
To conclude, I think Fairfax is an amazing company that will continue to do well in the years ahead.
I estimate the intrinsic value of Fairfax equals 3,000 CAD.
As the current stock price equals 2,340, this implies a discount of 22%.
We would love to buy Fairfax on weakness.
Adding to the Portfolio
Now let's dive into the three companies we're buying tomorrow.
Topicus ($TOI.V)
How does the company make money?
Topicus is a spin-off from Constellation Software.
It's a serial acquirer focusing on Vertical Market Software (VMS) companies in Europe.
Why are we adding more?
Topicus runs the same model as Constellation Software.
Acquire niche software businesses
Reinvest the free cash flow
Repeat...
Topicus is a younger, smaller, European version of Constellation Software.
That means it has more runway ahead.
Topicus is likely to grow faster than Constellation Software going forward.
Europe's VMS landscape is very fragmented, meaning there are lots of deals available.
Scale works against you in M&A. Constellation has grown so large that small acquisitions barely move the needle, while Topicus remains small enough to achieve rapid growth from the same deals.
European sovereignty concerns and stricter data regulation act as moats for local software companies, a tailwind that directly benefits Topicus's acquisition targets.
The best way to look at profitability for both Topicus and Constellation Software is through Free Cash Flow Attributable to Shareholders (FCFA2S).
It's the actual cash available to be reinvested or returned to shareholders after the company has paid all its costs (operating bills, replaced necessary equipment, and accounted for money owed to minority partners).
It's very similar to Warren Buffett's idea of Owner's Earnings.
Last year:
Topicus grew its FCFA2S by 23%
Constellation grew its FCFA2S by 14%
If Topicus grows its FCFA2S by 20% in 2026, the projected FCF would be EUR 262 million.
This implies a forward FCF Yield of over 5%.
This is one of the cheapest valuation levels the company ever traded at.
Topicus might be an interesting buy today:
Free cash flow growing very fast
Plenty of acquisition targets
Cheap valuation level
Transaction
We will add $20.000 to Topicus.
This means we buy Q 285 at a limit price of 97 CAD.
HG Capital Trust ($HGT)
How does the company make money?
HG Capital Trust is a Private Equity firm that invests in and grows unlisted software and technology services companies, making money from capital appreciation and dividends.
Why are we adding more?
The best way to look at the intrinsic value of HG Capital Trust? It's Net Asset Value (NAV).
Here's how they calculate this number:
Take the intrinsic value of all companies they own
Add the cash they have in the bank
Deduct all debt
What's left over is the Net Asset Value.
At the end of last year, HGT's NAV equaled 560 pence.
The current share price is 350 pence.
That means the stock is trading at a 37.5% discount to its NAV.
[Image — HGT NAV vs share price. Source: HG Capital Trust Investor Relations]
I think Mr. Market is being way too negative on software companies like the ones HG Capital Trust invests in.
HG Capital Trust looks cheap at the moment.
It's also one of the smaller positions in Our Portfolio.
That's exactly why we'll be adding to it.
Transaction
We will add $15.000 to HG Capital Trust.
This means we buy Q 3.075 at a limit price of 365 pence.
Brown & Brown ($BRO)
How does the company make money?
Brown & Brown is an insurance broker that helps customers find and buy coverage from various insurance companies.
They earn commissions and fees for placing this coverage across property and casualty, employee benefits, and specialty programs.
They also earn contingent commissions, which are incentive payments from carriers based on the underlying profitability of the business they manage
Why are we adding more?
The majority of insurance markets Brown & Brown is involved in are currently softening and slowing.
While this does slow down organic growth in the short-term, it gives us an opportunity to buy more at an attractive price.
The recent Accession acquisition contributed $445M in Q1 revenue.
[Image — Brown & Brown revenue. Source: Fiscal.ai]
The market didn't seem to like the low organic growth in the most recent earnings report.
But in the long-run, Brown & Brown should continue to perform well.
E&S CAT property rates have declined 15-35%, but there is an inverse correlation where lower rates often lead to higher contingent commissions, keeping margins from falling too far.
B&B has live AI agents automating over 25% of end-to-end submission processes in their programs and wholesale businesses
Management expects organic growth to improve throughout 2026 as the Accession business enters the organic comparison.
I believe Mr. Market is focused on short-term headwinds and missing the massive earnings power of the integrated Accession business.
To my knowledge, this is the cheapest valuation level they have ever traded at.
[Image — Brown & Brown valuation history. Source: Fiscal.ai]
When the insurance market catches up again, the EPS (which grew 8% to $1.39 in Q1) and the valuation multiple should both rise significantly.
As a result, the stock price should follow.
Transaction
We will add $15,000 to Brown & Brown.
This means we buy Q 160 at a limit price of $63.
Conclusion
On Monday, we are adding to three stocks:
Topicus (Buy for $20,000)
A younger, faster-growing version of Constellation Software with a massive European runway
Grew FCFA2S by 23% in 2025. At current prices, it offers a rare 5% forward FCF yield
HG Capital Trust (Buy for $15,000)
The best Private Equity company in Europe
Owns great software companies that you normally can't access
Trades at a significant discount to NAV
Brown & Brown (Buy for $15,000)
A high-quality insurance broker with 38.5% EBITDAC margins
Trading at a historically low valuation with a projected organic growth improvement through year-end
Everything in life compounds Team Compounding Quality
Book
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Used sources
Interactive Brokers: Portfolio data and executing all transactions
Fiscal.ai: Financial data
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