As a reminder to readers, with Human Capital we are focused on mid cap businesses (average market cap: $5-6bn) across the globe, offering high compounding growth through three primary themes:

-    Outstanding leadership
-    Decentralised structures, empowering action and an entrepreneurial culture
-    Acquisitive businesses

Companies that harness these values effectively can punch above their weight for many decades, delivering outstanding returns for shareholders. Our underlying businesses have continued to perform strongly this year, delivering earnings growth comfortably above our 15% threshold and, while flat share prices are unfortunate short-term, they give patient investors the opportunity to build positions at attractive levels.

We had a busy third quarter, adding two new names to the Fund:

-    Exchange Income Corporation: is a Canadian business, who acquire mission-critical aerospace and manufacturing businesses. They were recently described as ‘Berkshire Hathaway, Minnesota Style’, which is demonstrative of their mindset. We met with their CEO, Mike Pyle, who founded the business in 2002, and were immediately struck by his passion for business. EIC has grown at over 20% annualised since the early-2000s and we see more of the same ahead.
-    APi Group: is a decentralised group of industrial businesses focusing on Safety Services (fire protection, fire alarms, elevator maintenance, etc) and Specialty Services (niche infrastructure-related services including structured cabling and water treatment). They target highly regulated markets and inspection-driven services that involve lots of customer engagement. They tick all our Human Capital boxes and have more than a passing resemblance to Halma, which has been a core holding in CHUK for over 15 years.

We funded these two purchases with the disposal of four positions. We are wedded to no position and when the facts change, we must be disciplined and proactive in our response. Judges Scientific, Brown & Brown and Cadre each fell short of our expectations and, while management continue to talk sense, they do not look likely to meet our 15% growth hurdle for the foreseeable future. On the other hand, Comfort Systems has delivered excellent returns for Human Capital, thanks to skyrocketing demand for their cooling systems in US data centres. Shares in Comfort Systems had more than doubled in 2026 and we felt that the valuation had become overstretched and so took the moment to book profits.

In addition to our new investments in EIC and APi, we continued to increase our position in Australian mining services group, Tasmea, after a compelling meeting with their founder Stephen Young. Lastly, we added to several of our core Swedish names, such as Lagercrantz and Bergmann & Beving, on valuation grounds.
 

The above article has been prepared for investment professionals. Any other readers should note this content does not constitute advice or a solicitation to buy, sell, or hold any investment. We strongly recommend speaking to an investment adviser before taking any action based on the information contained in this article.

Please also note that the value of investments and the income you get from them may fall as well as rise, and there is no certainty that you will get back the amount of your original investment. You should also be aware that past performance may not be a reliable guide to future performance.