The Resolute and GPGI separation reads like a compounder modeled on Constellation Software. Permanent capital plus a quarterly management fee on operating subs is exactly the kind of setup that turns into a real multibagger if the operators deliver.
Thanks for diving into this—it's a useful reminder that founder leadership alone doesn't guarantee a great investment. I think the real question isn't just whether the founder is still in charge, but whether the business itself has something defensible that keeps competitors at bay. With industrial tech companies especially, it seems like the ones worth owning are the ones where customers get locked in or where switching costs are genuinely high. Do you see that kind of moat here, or does it feel more like GPGI is just executing well in a pretty competitive space?
Admittedly, I didn’t do a ton of work on the moat of husky, I spend far more time on structure and incentives in this write up.However, I do think there is a real structural moat but it may not be as strong as management would present it. Husky has an obvious switching cost advantage which is evidenced by the 85%+ sales retention and 20+ years average tenure among the top 10 customers. I think once a beverage manufacturer builds a production line around Husky’s system, migrating to a competitor means re-qualifying tooling, retraining technicians, and risking uptime losses on a production line. Theres are probably some scale benefits too as they are 4-5x bigger than the next competitor. That said, I don’t think these are impenetrable moats.
The Resolute and GPGI separation reads like a compounder modeled on Constellation Software. Permanent capital plus a quarterly management fee on operating subs is exactly the kind of setup that turns into a real multibagger if the operators deliver.
Thanks for diving into this—it's a useful reminder that founder leadership alone doesn't guarantee a great investment. I think the real question isn't just whether the founder is still in charge, but whether the business itself has something defensible that keeps competitors at bay. With industrial tech companies especially, it seems like the ones worth owning are the ones where customers get locked in or where switching costs are genuinely high. Do you see that kind of moat here, or does it feel more like GPGI is just executing well in a pretty competitive space?
Admittedly, I didn’t do a ton of work on the moat of husky, I spend far more time on structure and incentives in this write up.However, I do think there is a real structural moat but it may not be as strong as management would present it. Husky has an obvious switching cost advantage which is evidenced by the 85%+ sales retention and 20+ years average tenure among the top 10 customers. I think once a beverage manufacturer builds a production line around Husky’s system, migrating to a competitor means re-qualifying tooling, retraining technicians, and risking uptime losses on a production line. Theres are probably some scale benefits too as they are 4-5x bigger than the next competitor. That said, I don’t think these are impenetrable moats.