TDM Growth Partners

Owning growth businesses for long periods is the approach of TDM Growth Partners, an Australian investment firm that backs a small number of companies. It calls its approach ownership investing, and it rests on the belief that people and culture give a company its most durable competitive advantage. The firm reports that it has compounded capital at 24% a year over the last twenty years, returning 81 times its clients' initial investments.

Evergreen capital and long holding periods

Its capital is a single pool with no set fund end, so the firm can keep owning a company for as long as its thesis holds. By its own count its longest-owned portfolio company has been held for 19 years so far. The firm argues that this time horizon matches the long view of founders and chief executives, and that its performance-only fees keep its interests aligned with long-term growth.

People and culture as the central test

The firm says that scaling the people and culture of a business is the most important and most difficult factor in long-term growth. Its view is that powerful cultures are set by the chief executive and the board, and that they tend to bring great people together under one mission. It has published a series of pieces on scaling culture and on why it cares about culture in its investments.

Board work for private companies and sounding-board advice for listed ones

In private companies the team is typically active at board level, advising on governance and on capital transactions, and sometimes taking interim executive roles. In public companies its role is that of a sounding board on creating long-term value through investor relations, disclosure and capital allocation. The portfolio is held to fifteen companies, a size that lets the team know each one closely.

A portfolio that spans consumer, health and software

The portfolio spans online pet retail, a personalised health platform, sustainable footwear and apparel, HR software, a financial ecosystem, customer engagement infrastructure, a fast-casual Mexican food chain, global event management software, checkout optimisation for e-commerce, music streaming and a workplace communications app. It also includes pharmaceuticals for cancer and wound healing, mortgage origination software, a baby goods retailer, mining services, risk and governance services, construction management software, and a booking platform for studios.

Track record in mining, retail and software

Examples in the firm's own material include an early stake in a mining company that listed on the stock exchange, a long-running shareholding in a risk analytics business later sold to a larger data group, and a decade of active partnership with a baby goods retailer, where the firm became the largest shareholder and joined the board. Its software investments include an early SaaS deal that later sold to a large software group.