Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) is one of the most respected fund managers on the ASX.
It's been operating for over a century and has generated strong returns for its shareholders considering how defensive the business is set up.
Soul Patts is known for its large investments in TPG Telecom Ltd (ASX: TPM), Brickworks Limited (ASX: BKW), Australian Pharmaceutical Industries Ltd (ASX: API) and New Hope Corporation Limited (ASX: NHC).
However, it's also getting a reputation for picking out quality small caps. Its latest investment is Calix Limited (ASX: CXL).
Soul Patts was one of the leading institutional investors alongside Perennial Value Management and a couple of other institutions for the IPO.
Calix raised $8 million at $0.53 per share, for a fully dilated market capitalisation of $65 million, it's a very small company by ASX standards.
Its pre-commercialised products are crop protection, decarbonisation of lime & cement and advanced battery materials.
According to Calix, the key to its near-future is a world-first, patented, Australian platform technology that reinvents the kiln process. Calix has invested more than $50 million to develop and commercialise its technology. The business has been given $36 million in grant funding and rebates.
Calix says that it's already cash flow positive and has achieved a compound annual revenue growth for its core products of 41.8% between 2015 and 2017, with revenue growth of 34.2% in the first half of FY18.
Foolish takeaway
Calix's products sound very interesting and if they gain traction in the industrial industry it's easy to imagine it will rapidly grow in size. Soul Patts is clearly interested in its future and I think Calix is one to watch, however it's a bit too new for me to invest presently. It's outside my circle of competence.
