Swedish Compounders: the quiet powerhouses of Global quality investing
Over the past decade, Addtech and Lifco have quietly outperformed Amazon, Alphabet, Microsoft, Meta Platforms and even Berkshire Hathaway—without the fanfare or front-page headlines. How? Not through flashy apps or massive platforms, but through patient compounding, decentralised excellence, and disciplined capital allocation.
Why Sweden?
At first glance, Sweden’s stock market may seem unremarkable, dominated by industrials and financials. However, a disproportionate number of Swedish companies have consistently performed exceptionally well. The reason? A national DNA rooted in long-term thinking, decentralised governance, and a culture of reinvestment that these companies embody. Sweden has become fertile ground for quality investors and corporates with characteristics that match North American counterparts such as Constellation Software and Danaher. We see such examples in Lifco and Addtech.
Lifco: A quiet revolution in scaling:
Lifco has acquired over 200 companies while staying true to its decentralised philosophy: buy niche market leaders, leave them to run independently, and track performance with rigour. Over the past decade, it has become a compounding machine across diverse sectors like dental, demolition, and tools. With annual free cash flow per share growth of 23.3%, Lifco embodies efficient capital allocation and long-term value creation.
Addtech: precision meets patience in precision engineering:
Addtech applies the same Swedish playbook to industrial solutions. With a focus on capital-light, niche technical businesses, it blends precision in acquisition with long-term operational improvement. Since its IPO in 2001, it has averaged earnings growth of nearly 20% per year. Each acquisition is targeted to add value over the long term, reflecting Sweden’s industrial compounding strength.
Yes, Big Tech dominates the headlines—but Addtech and Lifco dominate long-term returns. While Silicon Valley scales via platforms and network effects, Swedish compounders scale through discipline and decentralisation. In our Global portfolios, we look for resilient, under appreciated compounders that build value year after year. Lifco and Addtech are not just portfolio holdings—they are case studies in enduring quality. For us, this patient, decentralised approach to value creation is the gold standard for long-term success.
At a time when investors seem less enchanted with the US market, we are finding plenty of opportunities to create balance in a global equity portfolio.
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