Executives and investors at the 2026 JPMorgan Industrials Conference discussed the macro backdrop, leadership priorities, and a long-term investment model built around permanent capital and operating discipline. The panel featured David Cote, former Honeywell CEO and now Executive Chairman of GPGI, alongside Thomas Knott, the firm’s Chief Investment Officer.
Macro view: cautious, but not pessimistic
Cote said he believes the economy is “better than a lot of the media give it credit for,” characterizing conditions as mixed but “not all that bad.” He acknowledged geopolitical uncertainty tied to the Middle East and Iran, noting the possibility of a recession depending on how events develop. However, he said he does not expect the situation to “turn into a tragedy,” describing a severe outcome as possible but not especially probable.
Leadership: protecting time to focus on what matters
He also described how he protected time for strategic thinking. Cote said leaders can become “a victim of your calendar,” and cited a principle: “Beware of letting the urgent get in the way of the important.” To counteract that dynamic, he said he would block off roughly three days per month where no meetings could be scheduled. Some of those days were used for unannounced visits to facilities or customers. In addition, he described setting aside two to three days per year for what he called “Blue Book” days—time dedicated solely to thinking and taking notes, without a team present. Cote said this approach generated ideas that influenced major initiatives, including what became the Honeywell Operating System.
What Cote looks for in CEOs
In discussing CEO performance, Cote said results across large-company leaders follow a “standard distribution,” arguing that being an S&P 500 CEO does not necessarily mean an executive “actually know[s] what you’re doing.” He said leadership selection matters most when paired with a “great position in a good industry,” because a strong leader drives culture and culture drives results.
Cote said he is better at evaluating executives after they are in the job than during interviews. He described looking for early evidence of change and progress—what he referred to as “inchstones”—rather than vague promises that improvements will come years later. He also said he values a “drumbeat of daily management” so that initiatives are monitored continuously rather than quarterly.
As an example, he discussed Vertiv CEO Giordano Albertazzi, saying he initially had doubts but later saw strong performance and an unusual capacity to grow through coaching. Cote said the ability to “make change now” and show results quickly is a key trait investors should look for during leadership transitions.
Investor behavior and the Vertiv “panic” pattern
Cote argued that investors often underestimate their own tendency to panic, saying he has seen repeated cycles of market fear around Vertiv—such as concerns about bubbles, competitive threats, or geopolitical issues—leading to selloffs. He said similar behavior is occurring around GPGI, and referenced a “DeepSeek” news moment that he believed was positive for Vertiv because lower costs could increase usage, even as the stock declined on the headlines.
Building a permanent-capital industrial platform with CompoSecure
The panel outlined how Cote and Knott moved from operating roles into a structure meant to combine “permanent capital” with what they described as “superb operating practices.” Cote said their view was that many private equity firms claim operating expertise but often do not apply it effectively, and that typical private equity fund structures encourage early exits rather than long-term investment.
Cote said an opportunity emerged when CompoSecure (NASDAQ:CMPO) became available, which they learned about through JPMorgan. He described the acquisition as a way to “inexpensively create a permanent capital vehicle” and then build an aligned asset management structure with minimal overhead at the parent level. He said the model is intended to attract strong operators, and framed it as an effort akin to “Honeywell 2.0.”
Cote and Knott described a structure with no corporate CEO or CFO above the operating companies, intended to keep accountability at the business level and avoid losing focus across a diversified portfolio. Knott said the goal is to buy businesses with “great positions in good industries” and deploy an operating system consistently to drive “above market revenue, EBITDA, EPS, and cash flow” versus top industrial peers.
The discussion also touched on an acquisition approach that targets private-equity-owned businesses of significant scale. Knott said private equity has accumulated increasingly large assets—hundreds of millions to over $1 billion of EBITDA—at a time when fundraising and the number of buyers for those assets have slowed. He argued that large private-equity-owned companies often carry leverage levels (he cited 6–7x) that are not well suited for a public listing, and that IPO exits can create “zombie companies” if a sponsor remains an 80%–90% owner and must sell for years. Knott said GPGI’s model could provide more upfront capital and reduce leverage while limiting overhang by keeping private equity sellers at smaller ownership levels in the broader platform.
The panel cited the Husky transaction as evidence of investor interest in the model. Cote said the company raised $2.1 billion in equity for Husky in three weeks without using a bank. On leverage, the speakers said they aim to maintain a sound debt profile, citing comfort around 3.5x with an intent to bring it down, and emphasized maintaining credibility with bond investors as well as equity holders.
Both Cote and Knott said they intend to be disciplined on acquisitions and are willing to operate their existing businesses if attractive deals are not available. Cote argued that a conglomerate model can be justified if it outperforms the S&P 500, pointing to Honeywell’s record of beating the index by about 2.5 times over 16 years. He said that kind of earnings and cash generation is what would justify the strategy over time.
About CompoSecure (NASDAQ:CMPO)
CompoSecure is a global provider of secure card and credential solutions, specializing in the design, manufacturing and personalization of payment cards, identification credentials and related services. The company develops a range of card products that include metal cards, composite cards and hybrid designs integrating advanced security features such as EMV chip technology, contactless interfaces and specialized surface treatments. CompoSecure’s offerings are tailored to the needs of banks, credit unions, fintech firms and government agencies seeking to differentiate their cards and enhance consumer engagement.
The company’s product portfolio extends beyond physical cards to encompass digital issuance and lifecycle management solutions.
