Joshua Horowitz's questions to Kingsway Financial Services Inc (KFS) leadership • Q3 2024
Question
Joshua Horowitz of Palm Valley Capital Management inquired about Kingsway's acquisition strategy, asking which industries are most attractive, whether talent recruitment for the KSX model is getting easier, and what the appropriate timeframe is to measure the success of these acquisitions.
Answer
Executive John Fitzgerald explained that the company's Operator in Residence (OIR) talent recruitment benefits from a 'flywheel effect,' with the best referrals coming from existing OIRs and CEOs. He noted that attractive industries are typically asset-light business services and vertical market software in niche sub-industries. Fitzgerald suggested that a three-year mark is an appropriate timeframe to assess an acquisition's success, citing the example of Ravix, which has nearly doubled its EBITDA since its acquisition three years ago.