Pieter Slegers — Who is Chuck Akre?

Mastercard is Akre's single largest holding at 18.6% of the portfolio — more than a sixth of a book run by an investor who has been doing this since 1989. He bought it in 2010 and has never sold; the shares are up more than 3,200% since.

The reason given is the same one that appears everywhere in this archive: the network cannot be started from either end. Shops take the card because customers carry it, customers carry it because shops take it, and a rival would have to sign up both halves at once. Akre's version puts a price on that: it "would cost competitors hundreds and hundreds of billions of dollars."

What makes it an Akre holding rather than merely a good business is the reinvestment leg of his framework. Mastercard does not need to build anything to process more payments — the rails exist — so growth requires very little new capital and the cash it throws off can compound rather than being consumed. That is the definition of the compounding machine he says he is looking for.

Brookfield owns the things economies run on — property, ports and pipelines, power stations, and stakes in private companies — and collects the rents and tariffs they generate while the assets themselves appreciate. Alongside that it manages money for pension funds and sovereign wealth funds, taking a management fee and a share of the profits.

It is structured as a family of listed companies, and this post lists what the parent owns of each: 73% of the asset manager, all of the insurance arm, 60% of infrastructure, 30% of renewables, 90% of the private-equity vehicle. Owning the parent gives you a slice of all five plus the fee stream, which is why the parent is the pick rather than any of the pieces. Bruce Flatt, who runs it, is "often referred to as the Canadian Warren Buffett," and the shares have compounded at 19% a year since 1993.

Here it is Akre's second-largest position at 11.3%, and Slegers interrupts the profile to add his own note: "It's a high-quality business we're proud to own in our portfolio." Two concentrated quality investors independently sizing the same name near the top of their books is the useful information in this entry.

KKR raises money from institutions, buys companies and other assets with it, improves them and sells them later. It earns in two ways: a steady annual fee on everything it manages, which arrives whether or not investments do well, and a share of the profits when they do — usually about a fifth.

Akre's stated reasons are the diversification across asset classes, the quality of management, and specifically the recurring fee revenue, which behaves like a subscription rather than like a trading business. The strategic ambition is quoted directly: KKR wants to build "the next Berkshire Hathaway" — meaning it increasingly wants to own things permanently, financed partly with insurance money, rather than only running funds with fixed lives.

He first bought in 2018 and the shares are up more than 300% since, and it sits at 10.2% of the portfolio. It is also one of the five names Slegers and Akre both own — and one Slegers has separately described as down heavily on recession and private-credit fears while insiders keep buying.

Visa is the other half of the card duopoly, and it does the same thing as Mastercard: it moves the authorisation message, not the credit risk, and takes a sliver of each transaction. Akre bought it in 2010, at the same time as Mastercard, and it has risen more than 1,700% since.

The description offered is deliberately plain — "dominant market share, high margins, and resilient, asset-light business model." Asset-light is the operative phrase for Akre's framework: a business that needs almost no physical investment to grow can turn nearly all its profit into either reinvestment or returns to owners.

The detail worth noticing is that both card networks sit inside a five-name portfolio. In a book that concentrated, holding Visa and Mastercard is not diversification — it is doubling down on one structure with two instruments, which tells you how much confidence he places in it.

Moody's decides how likely a borrower is to repay, and publishes the verdict as a rating. Companies pay for that rating because regulation and investor mandates effectively require one, and only three firms can supply it — Moody's, S&P Global and Fitch. It costs almost nothing to produce another rating, so the margins are enormous.

Akre bought it in 2012, the same year as O'Reilly Automotive, and both have risen more than tenfold. It is 8.9% of his portfolio. The description here is spare: "very predictable revenues… a lot of pricing power and the company is very profitable."

The interesting cross-reference is that Slegers bought the other side of the same oligopoly two days earlier, taking S&P Global at 22 times earnings. Two of the three permitted rating agencies now appear in this archive as endorsed positions within the same week.

Topicus buys small European software companies that sell unglamorous, essential systems to niche industries — the software a dentist's practice or a municipal government cannot operate without — and keeps buying more, forever. It is the European offshoot of Constellation Software and runs the same playbook.

It appears in this post only in one sentence, as one of the five companies Slegers and Chuck Akre both own. But it is arguably the purest illustration of Akre's third principle. A compounding machine, in his definition, is a business that can take the cash it earns and put it back to work at a high rate — and a serial acquirer of small software firms has, in effect, an unlimited supply of such opportunities as long as the discipline holds.

No new valuation work is offered here. The information is the corroboration: a manager who holds five names for decades has independently reached the same conclusion.

Constellation is the parent of that model and the original — more than a thousand small vertical-market software businesses bought and held, never sold, each one boring and each one critical to whoever depends on it.

Like Topicus, it appears here only in the overlap sentence naming the five companies Slegers and Akre both own. Its relevance to the profile is structural: Akre's stated search is for "companies that are able to reinvest their capital at high rates of return for long periods of time," and Constellation is the clearest listed example of exactly that — a business whose entire purpose is redeploying its own cash flow into more of itself.

Worth reading alongside the archive's other entries on the name, where it is a Very Strong conviction holding at what Slegers calls the cheapest valuation it has ever traded at.

American Tower owns the masts that mobile networks hang their antennas on, and rents space on them to several carriers at once. It is included here purely as the extreme illustration of a long holding period, not as a recommendation.

Akre bought it in 1988 at 80 cents a share. It now trades at $166 — a return of more than 200 times, over thirty-six years. That is the arithmetic argument for not selling a compounding business, and it is why the rest of his framework exists: you only get a 200-bagger by never being tempted out of it.

The bracketed line at the end is the honest counterweight, and easy to skip: he began trimming in 2024. Even the archetypal forever holding was eventually reduced — the discipline is holding while the machine compounds, not refusing ever to sell.