The HoldCo structure has had an interesting decade. What started as a niche alternative to the traditional search fund model — buy one company, operate it, eventually sell — has grown into its own corner of the ETA world. Business schools now run dedicated HoldCo tracks. There are conferences, podcasts, and active online communities built around it. The conversation has matured.
For those unfamiliar: a HoldCo, in this context, is a holding company that acquires small, cash-flowing businesses, reinvests those cash flows into further acquisitions, and intends to run the whole thing indefinitely. No fund lifecycle. No fixed exit horizon. The goal is not a transaction — it is an institution.
A recent Yale School of Management note — Exploring Holding Companies in the Search Fund Ecosystem — captures the structural appeal well:
"The ability to compound and grow capital for decades with tax deferrals presents an opportunity to concentrate on MOIC and create vast sums of equity dollars."
That framing is accurate as far as it goes. But it captures only part of the picture.
What drew me to the HoldCo structure was not primarily the compounding arithmetic. It was the fit between the structure and the problem I was trying to solve.
Southeast Asia has thousands of profitable, founder-led businesses — in manufacturing, distribution, engineering services, food processing — whose founders are now in their sixties with no obvious successor. The businesses are real, durable, and cash-generating. The founders want to hand them on to someone who will treat them with care. Private equity, with its fund lifecycle and exit requirement, is structurally the wrong answer. A strategic acquirer looking to consolidate is also the wrong answer.
A HoldCo, by contrast, can hold these businesses permanently. That structural fit — between what the founders need and what the vehicle can provide — is what makes it the right instrument. Not the tax deferral. Not the portfolio effect. The permanence.
The Yale note ends with six pieces of advice for aspiring HoldCo entrepreneurs. I think they are worth taking seriously.
You can read the full note here: Exploring Holding Companies in the Search Fund Ecosystem
The first piece of advice is the most important, and the one I return to most often.
There is a version of the HoldCo that exists primarily as a vehicle for personal wealth accumulation dressed in the language of stewardship. That version will probably produce acceptable financial returns. It will not produce what I think this work is actually capable of — businesses that outlast their founders, teams that retain their culture, and communities across Southeast Asia that keep the industrial capacity it took them decades to build.
The right reasons, in my view, have more to do with what the structure makes possible for the businesses and the people inside them than with what it returns to the people at the top of it.
If you want to chat about building a HoldCo in Southeast Asia, I am always happy to connect. Write to me at lucien@enduringventures.co.
— Lucien Ong, Co-Founder, Enduring Ventures