This portfolio holds eight high-conviction names across the Building Systems, Materials & Infrastructure ecosystem. The objective is to compound capital over the long term by owning companies that sit at the backbone of the built environment: global building materials, aggregates, HVAC and climate systems, specialty contractors, water technology and stormwater infrastructure, plus a leading US homebuilder. The structure is a core + growth barbell. At the core are diversified, scale players like CRH, Vulcan Materials and D.R. Horton, which anchor the portfolio in large, established markets such as infrastructure materials and US housing. Alongside them, Trane Technologies, EMCOR and Xylem provide resilient exposure to critical services and systems HVAC efficiency, mechanical/electrical contracting and water technology with meaningful recurring and retrofit-driven revenue that helps smooth the cycle. The growth tilt comes from Quanta Services and Advanced Drainage Systems, which are positioned to benefit from multi-year secular themes: grid expansion and AI/data-center power demand in Quanta’s case, and climate-driven stormwater and drainage investment for ADS. Position sizes reflect a balance between stability and upside: the globally diversified, cash-generative franchises carry the largest weights, while the more theme-sensitive grid and climate-resilience plays are sized as high-conviction satellites rather than dominant bets. Overall, the book is designed to capture infrastructure, housing and energy-transition tailwinds, while maintaining diversification across materials, systems and services so that no single end-market shock can derail long-term compounding.
This is a focused, eight-stock portfolio built around the Building Systems, Materials & Infrastructure theme. With only eight positions, every holding must stand on its own fundamentals—there is no room for “filler” names. The objective is to generate attractive long-term returns by owning a tight group of companies that (1) control critical parts of the built environment, (2) convert those advantages into strong, recurring cash flows, and (3) are sensibly valued relative to their own history and long-run growth prospects.
The portfolio is structured as a core + growth barbell. On the core side, CRH, Trane Technologies, EMCOR, D.R. Horton, Xylem and Vulcan Materials provide diversified exposure to building materials, HVAC and climate systems, construction services, water technology and US housing. These companies are generally large, established franchises with durable competitive positions—such as scale in aggregates and cement, installed bases in HVAC and water systems, or broad geographic footprints in homebuilding and services.
On the growth tilt side, Quanta Services and Advanced Drainage Systems lean into secular capex themes: grid expansion and AI/data-center power demand in Quanta’s case, and climate resilience and stormwater infrastructure for ADS. Position sizes reflect both quality and risk: the diversified, cash-generative franchises carry the largest weights (around 15% each), while the more theme-sensitive grid and stormwater names sit at 10% apiece as high-conviction satellites.
CRH is one of the two main anchors of the portfolio. Headquartered in Dublin, it is a global building materials group with a major presence in North America and Europe, supplying cement, aggregates, ready-mixed concrete, asphalt and related products used in roads, infrastructure and buildings. Its scale in aggregates and cement, integrated network of quarries, plants and distribution, and ability to provide end-to-end solutions (from materials through paving and construction services) make it a central “picks and shovels” exposure to infrastructure and non-residential construction. As governments continue to invest in transportation and urban infrastructure, CRH should remain a key beneficiary, while its diversified footprint helps buffer local downturns.
Trane, through its Trane and Thermo King brands, is a global leader in HVAC, thermal management and building automation. The company provides equipment and services for indoor climate control, energy efficiency and decarbonization across commercial and residential buildings. A significant portion of its economics comes from services, controls and retrofit work tied to the installed base, which tends to be more recurring and less cyclical than pure new-build sales. The investment case is to own the long-term shift toward more efficient, lower-carbon buildings: stricter building codes, corporate sustainability targets and higher energy costs all support demand for Trane’s solutions. Given its high returns, technology depth and growing service mix, Trane serves as a quality compounder at the heart of the portfolio.
EMCOR is the portfolio’s key exposure to mechanical and electrical construction and facilities services. It is a Fortune 500 company with hundreds of locations across the US, providing mechanical and electrical contracting, industrial and energy infrastructure work, and ongoing building services. EMCOR’s strength lies in complex, multi-trade projects and long-term service relationships that keep critical building systems running—HVAC, electrical, fire protection, and more. These services generate steady, often recurring revenue streams and can be less sensitive to short-term swings in new construction. In the portfolio, EMCOR plays the role of a stabiliser: it participates in infrastructure and building upgrades but with a risk profile that is closer to a diversified services company than a highly geared contractor.
D.R. Horton is the primary housing-cycle play in the portfolio. It is the largest homebuilder in the US by volume and operates across more than 100 markets and multiple brands, ranging from entry-level to move-up and active-adult housing. Its national scale, purchasing power and land strategy give it advantages in cost and product breadth, allowing it to respond more flexibly to changing demand and mortgage-rate environments. While homebuilding is inherently cyclical, the US has experienced a prolonged period of under-building relative to household formation, which provides a structural underpinning for long-term demand. Within the portfolio, DHI delivers upside when housing is strong, while its scale and brand recognition help mitigate some of the downside risk compared with smaller builders.
Xylem is the portfolio’s dedicated water technology holding. It designs and manufactures pumps, treatment systems, smart meters, analytics and digital solutions for water and wastewater utilities, industrial users, commercial buildings and other end-markets. The businesses span water infrastructure, applied water and measurement and control solutions, including advanced metering and monitoring. Xylem is levered to long-duration themes: aging water infrastructure in developed markets, ongoing urbanisation, water scarcity, stricter environmental regulation and the push for smarter, more efficient networks. In the portfolio, Xylem adds a sustainability and resilience dimension that is adjacent to, but not perfectly correlated with, housing and core construction cycles.
Vulcan Materials is the aggregate pure play in the portfolio. It is the largest producer of construction aggregates in the US, primarily crushed stone, sand and gravel, which are essential inputs for highways, bridges, buildings and other infrastructure. Aggregate markets tend to be local due to transportation costs, and Vulcan’s network of quarries and distribution assets gives it strong positions in many high-growth regions. This local market concentration, combined with disciplined pricing, can support attractive margins and returns over the cycle. While demand can be affected in the short term by weather, interest rates and public budgets, long-term infrastructure needs and repair backlogs are supportive. Vulcan serves as a more cyclical but high-quality complement to CRH on the materials side.
Quanta Services is the main growth-tilt exposure to energy and grid infrastructure. It provides engineering, procurement, construction and maintenance services for electric power, renewable energy and communications networks. The company designs and builds transmission and distribution lines, substations, renewable interconnections and related infrastructure, and increasingly offers “end-to-end” solutions for utilities and large energy users. Recent years have seen strong growth as electric-power systems are upgraded to support renewables, EVs and, more recently, energy-hungry AI data centers. Analysts and management have highlighted a multi-year backlog and pipeline linked to grid hardening, transmission expansion and large-load connections. Within the portfolio, Quanta brings higher growth and direct leverage to electrification and AI-driven power demand, offset by execution and project-cycle risk.
Advanced Drainage Systems (ADS) is the second growth-tilt position, focused on stormwater and drainage solutions. The company manufactures high-performance plastic pipes and a suite of stormwater management products—chambers, basins and related systems—used in site development, road and highway construction, and other applications. Its plastic systems often replace heavier concrete structures, offering design flexibility, easier installation and lower total project costs. As urbanisation, heavy rainfall events and flood risk increase, regulatory standards for stormwater management are tightening, which supports long-term demand for ADS products. ADS therefore sits at the intersection of infrastructure build-out and climate resilience, giving the portfolio targeted exposure to an environmental theme that complements Xylem’s water-tech position.
The portfolio is intentionally tilted toward real-asset and capex-driven businesses, so it is not immune to cycles in construction, housing and public infrastructure spending. D.R. Horton and Vulcan Materials, in particular, are sensitive to interest rates, housing affordability, weather and state/federal infrastructure budgets. However, these exposures are balanced by companies whose revenues are more tied to services, maintenance and regulation-driven upgrades, such as Trane, EMCOR, Xylem and ADS, where retrofit, efficiency and compliance work can remain resilient even when new-build activity slows.
Concentration risk is managed through the core + growth barbell. Roughly 70% of capital is allocated to large, diversified franchises (CRH, Trane, EMCOR, D.R. Horton, Xylem and Vulcan) that span materials, building systems, services, water and housing. These holdings should collectively drive the long-term compounding of the portfolio. The remaining 30% sits in Quanta and ADS, which carry more project and thematic risk but also offer outsized upside if grid investment, AI-driven power demand and climate-resilience capex unfold as expected.
Finally, the portfolio avoids excessive single-theme dependence: it is not purely a “housing bet,” an “AI/data-center bet,” or an “infrastructure bill bet.” Instead, it owns a small set of franchises that touch multiple, overlapping demand drivers—infrastructure renewal, energy transition, water and stormwater resilience and housing formation. The aim is to stay exposed to these long-run trends while keeping each individual risk—be it housing cyclicality, materials volatility or project timing—large enough to matter, but not large enough to dominate the overall outcome.
EMCOR Group (EME) is a core 15% holding because it combines two qualities that are difficult to find together in contracting: exposure to high-growth, mission-critical construction and a stabilizing layer of recurring facilities services. On the construction side, EMCOR is a premier MEP (mechanical, electrical, plumbing) specialist for complex environments—data centers, hospitals, advanced manufacturing and energy-efficiency retrofits—where owners prioritize reliability and on-time delivery over the lowest bid. That positioning is directly aligned with current secular demand: AI/cloud-driven data center buildouts, clean energy and electrification projects, and onshoring of advanced manufacturing. Importantly, EMCOR’s lifecycle model converts project wins into durable service revenue through multi-year maintenance and repair contracts, creating a smoother earnings profile than pure-play builders. Financially, the company stands out for a fortress-like balance sheet (net cash; very conservative leverage), strong cash generation, and a proven record of double-digit revenue growth with expanding margins—evidence of disciplined project execution and pricing power in a fragmented industry. Relative to alternatives considered (FIX, PWR, MTZ, MYRG, JCI), EMCOR offers one of the best “growth + resilience” mixes: it is less concentrated than some niche peers, carries materially lower balance-sheet risk than more levered operators, and still participates in the same structural capex tailwinds. With valuation described as fair versus its earnings growth outlook, EMCOR fits the portfolio’s objective of compounding through cycles while maintaining financial stability.
Quanta Services (PWR) earns its 10% allocation as the portfolio’s primary “grid build-out” and electrification lever: it is the dominant North American contractor for designing, installing, and maintaining electric power infrastructure, with a scale advantage that is difficult to replicate (50,000+ employees, a specialized equipment fleet, and national reach). That scale matters because the biggest transmission, substation, renewable interconnection, and grid-hardening projects increasingly require an integrated EPC partner with proven safety and execution—exactly where Quanta’s multi-year utility Master Service Agreements and storm-response work create a recurring revenue foundation. The investment case is reinforced by a very large backlog (~$39.2B), which provides unusually strong multi-year visibility and direct exposure to secular tailwinds (aging-grid replacement, resilience spending, renewable integration, and rising load from electrification). Financially, Quanta is executing in a growth phase with strong revenue momentum and improving EBITDA margins, but the trade-off is that growth has been acquisition-driven, pushing debt higher and raising the importance of integration discipline, working-capital management, and avoiding goodwill impairments. We hold PWR despite valuation risk because it is the category leader best positioned to capture the largest projects in a multi-decade grid capex cycle; however, it is treated as a higher-risk, higher-upside sleeve versus EMCOR, and position sizing reflects that the stock looks priced aggressively and leaves limited margin of safety if project timing, execution, or macro conditions disappoint.
Trane Technologies (TT) is a 15% allocation because it is a best-in-class, pure-play compounder on the global “electrification and decarbonization of buildings” theme, with a business model that is structurally higher quality than most industrial peers. The core attraction is the installed-base flywheel: Trane’s premium HVAC equipment and Thermo King’s transport refrigeration create a long-lived footprint that generates stable, high-margin aftermarket revenue from parts, service, repairs, and controls—cash flows that are materially less cyclical than new equipment sales and that deepen customer lock-in through switching costs. Fundamentally, the company is executing well: revenue has been growing at a double-digit pace and operating margins have expanded into the high teens with recent quarters above 20%, reflecting pricing power, mix improvement, and disciplined cost control; free cash flow conversion is also strong, supporting dividends and buybacks. Strategically, Trane is positioned to win as regulation and customer economics push the market toward higher-efficiency systems and electric heat pumps, while high-performance commercial demand (including data centers and life sciences) drives more complex projects where reliability and engineering matter. The principal constraint is valuation—TT screens expensive versus earnings, so we treat it as a high-conviction franchise where position sizing is justified by quality, but where incremental buying should be timed to more favorable entry points rather than “chasing” the multiple. Relative to competitors considered (EMR, LII, CARR, JCI), Trane offers the cleanest exposure to climate solutions with the most defensible recurring service economics, which is why it earns a meaningful weight in the portfolio despite the premium price.
CRH plc (CRH) is a 15% allocation because it provides a high-quality, asset-backed way to participate in a multi-year U.S. infrastructure upcycle, backed by an industrial moat that is difficult to replicate. The company’s advantage is its vertically integrated platform—anchored by a vast network of quarries—allowing it to control aggregates supply (stone, sand, gravel) and capture margin across multiple stages as those inputs are converted into asphalt, ready-mix concrete, and downstream building products. In heavy materials, local scale is the moat: transportation economics and permitting/regulatory barriers make well-located quarries near demand centers effectively irreplaceable, which supports durable pricing power and resilient cash generation. CRH has demonstrated this in execution, compounding revenue steadily while expanding operating margins through cycle management, disciplined pricing, and bolt-on acquisitions that consolidate fragmented markets. Financially, the company exhibits solid profitability and operating leverage—best assessed on an annual basis given seasonality—and it is trading at a reasonable valuation versus peers, with a forward multiple that looks more attractive than many U.S. pure-play aggregates names. The key risk we monitor is balance-sheet drift: debt has increased to fund acquisitions, so the investment case relies on continued integration discipline, cash-flow conversion through the peak season, and maintaining prudent leverage. Versus competitors considered (VMC, MLM, CX), CRH offers a differentiated mix of quarry-based moat, vertical integration, and a valuation that remains comparatively reasonable, making it a compelling long-term compounder tied to infrastructure demand.
Advanced Drainage Systems (WMS) is a 10% allocation because it is a best-in-class, structurally advantaged compounder in stormwater and water-management infrastructure, with a moat that is unusual for a “building products” name. The core edge is cost and scale: WMS is the leading North American producer of HDPE/PP corrugated pipe and related drainage systems, and—critically—the largest plastic recycler in the region, processing over 1 billion pounds of post-consumer plastic annually. That vertical integration into recycled feedstock creates a durable input-cost advantage versus peers, reduces exposure to virgin resin volatility, and supports industry-leading profitability (operating margins above 20% and strong EBITDA margins), which in turn funds continued capacity, innovation, and share gains. Demand is supported by both cyclical and secular drivers: site development and highway work benefit from infrastructure spending, while tighter stormwater regulation and climate-driven flooding risk increase the need for modern drainage, detention, and septic solutions (including Infiltrator). Financially, WMS pairs this moat with a conservative balance sheet (low debt and solid liquidity) and strong cash generation, enabling disciplined capital returns while maintaining flexibility through the cycle. The main discipline point is valuation: the market already recognizes the quality, so we own it for the long-run runway (materials conversion from concrete/steel to plastic + regulatory tailwinds), but we remain mindful that near-term upside will be more sensitive to entry price and construction-cycle volatility.
Xylem (XYL) is a 10% allocation because it provides the portfolio’s most direct exposure to the multi-decade water infrastructure and resilience theme, with a durable position as a global “one-stop-shop” across pumps, treatment, and measurement/digital control. The moat is primarily embedded in utilities: once Xylem equipment and standards are designed into municipal and industrial systems, switching is costly and operationally risky, and long-lived brands such as Flygt and Goulds reinforce that trust. Structurally, the demand drivers are non-discretionary—aging water networks, climate stress and water scarcity, stricter regulation, and the push toward smart metering and leak reduction—while the aftermarket parts/service and software tied to the installed base adds a more recurring element to what would otherwise be a project-driven model. We size the position at 10% (not larger) because the investment case is “quality + theme” rather than “best-in-class execution”: profitability has lagged more efficient peers and cash flow has been inconsistent quarter-to-quarter despite a healthy balance sheet. Valuation is the other constraint; the stock screens as expensive versus current earnings, so the intent is to own the franchise for the long run while maintaining discipline on entry points and monitoring evidence that management can improve margins and stabilize cash conversion. Relative to the alternatives considered (PNR, WTS, ECL, ITT), Xylem offers the broadest exposure to the full water cycle and large utility programs, but with a clear requirement for operational improvement to justify its premium multiple.
D.R. Horton (DHI) is a 15% allocation because it is the highest-quality way to own the U.S. housing cycle: the volume leader with the strongest operating machine and one of the most conservative balance sheets in the industry. DHI’s moat is scale-driven—its national footprint and purchasing power allow it to be a low-cost producer in an industry with limited brand loyalty, which is especially important because it focuses on the largest, most durable demand pool: entry-level and first-time move-up buyers. That scale advantage shows up in consistently strong gross margins (often above ~23%) and high-throughput execution (standardized plans, efficient build cadence, and move-in-ready inventory), while the integrated mortgage and title business increases conversion and adds incremental profit per closing. Critically, DHI pairs this operational edge with a fortress-like capital structure (very low debt and strong liquidity), which matters in a cyclical sector—when rates rise and demand slows, DHI can protect volume with incentives, keep acquiring land opportunistically, and potentially take share as weaker builders retrench. The long-term setup remains constructive given structural undersupply of U.S. housing and DHI’s unmatched land pipeline, supporting steady through-cycle growth even if margins are modestly lower than niche peers that skew luxury. On valuation, the stock screens fair rather than expensive (low-to-mid teens earnings multiple versus many industrial compounders), so the portfolio is paid to take housing exposure via the best operator, with the key risk being sensitivity to mortgage rates and consumer confidence.
Vulcan Materials (VMC) is a 10% allocation because it is effectively a best-in-class way to own U.S. infrastructure and construction activity through one of the strongest moats in industrials: irreplaceable, well-located aggregates reserves. As the largest U.S. producer of construction aggregates (crushed stone, sand, and gravel), VMC benefits from the fact that these materials are heavy and expensive to transport—so the quarry closest to demand has a structural cost advantage that is extremely difficult to replicate. This moat is reinforced by permitting and land-use barriers: opening a new quarry can take a decade or more, making many local markets de facto monopolies or duopolies (often versus Martin Marietta). While asphalt and ready-mix concrete add downstream exposure, the investment case is primarily the high-quality aggregates engine, where VMC has demonstrated clear pricing power and margin expansion (operating margins rising into the low-20s recently). Financially, the company is executing well: revenue has re-accelerated in recent quarters and cash conversion is strong, with operating cash flow materially exceeding net income—supporting disciplined reinvestment, debt reduction, and steady shareholder returns. The forward runway is supported by multi-year, legislated U.S. infrastructure spending, which should sustain volumes and pricing over a cycle. The key constraint is valuation: at a high earnings multiple (mid-30s trailing, low-30s forward) and near the top of its 52-week range, the stock appears priced for an unusually smooth outcome. In practice, VMC is a “great business, full price” holding—appropriate in the portfolio for its moat and infrastructure tailwinds, but most attractive on a pullback that restores a margin of safety.