Why are billionaires buying plumbers?

Who would have thought, but the biggest investment funds have found a new favorite asset. They are rushing to buy plumbing, electrical, and air-conditioning service companies on a massive scale.

For context: since 2022 alone, funds have bought almost 800 such companies in the US.

The most striking case is Apex Service Partners. In 2019, Alpine started bringing small trade service companies together under this company.

Back then, Apex’s revenue was around $40 million. Today, it is already more than $3 billion, while the entire company was recently valued at around $10 billion.

Why does this work?

The US home services market is worth around $700 billion, but it is still made up of thousands of small firms. Funds buy them one by one, consolidate advertising, procurement, and management – and build one large network.

And demand is very strong: pipes and air conditioners still need to be fixed, homes in the US are getting older, while the number of skilled tradespeople is declining.

That is why, following the same model, companies providing elevator, fire-system, roofing, and even garage-door services are already being bought up.

Essentially, funds have found a way to turn a very ordinary local business into companies worth billions of dollars.

Most likely, the US has once again launched a new business model. And this proven model will quickly start being copied in other countries, building similarly large networks out of local service businesses.