Finding the Tollkeepers: Lessons from Graham, Buffett & Hohn

Key Takeaways

• A century of investing wisdom—from Benjamin Graham to Warren Buffett to Chris Hohn—shows that long‑term success comes from owning businesses with durable competitive advantages.

• In today’s scale‑ and network‑driven markets, business quality is a more dependable margin of safety than valuation alone.

• Two purpose‑built ETFs now apply this philosophy directly, offering simple access to durable‑quality companies in the US and abroad.

The Rise of Tollkeepers

Across nearly a century of investment thinking—from Benjamin Graham to Warren Buffett to Chris Hohn—one theme has remained remarkably consistent: The most reliable long‑term results come from owning businesses with durable competitive advantages. As the economy has evolved toward scale, network effects, and regulatory barriers, business quality has become a more dependable margin of safety than valuation alone.

Today, investors can express this philosophy directly through strategies designed to identify “tollkeeper” businesses—companies that control what Buffett famously called “toll bridge” assets: essential infrastructure in the modern economy.

Benjamin Graham: The Origins of Value Investing

Benjamin Graham, coauthor of Security Analysis (1934), is widely regarded as the father of value investing.¹ He taught that markets often misprice companies in the short term, creating opportunities for disciplined investors to buy businesses for less than they’re worth. His approach emphasized careful analysis, skepticism toward market sentiment, and a focus on undervalued companies.²

Graham's method relied heavily on identifying statistically cheap stocks—an approach well-suited to the less efficient markets of his time. As markets evolved, investors began to emphasize what Graham himself had noted but was less remembered for: the underlying strength and quality of the businesses themselves.

Warren Buffett: From Value to High-Quality

Warren Buffett began his career following Graham’s value driven playbook, hunting for deeply discounted companies.³ Over time, he realized that the best long-term results come from owning high-quality businesses, not just cheap ones. 

Buffett shifted his focus toward companies with durable competitive advantages—brands, network effects, strong customer loyalty, and other characteristics that allow them to compound value over long periods. He captured this evolution in a now famous idea: It’s better to buy “a wonderful company at a fair price” than a merely cheap one.⁴ 

This emphasis on business quality, durability, and long-term compounding became the cornerstone of modern quality investing.⁵ ⁶

Chris Hohn: Concentrated Quality

Chris Hohn, founder of The Children’s Investment Fund (TCI), represents the most concentrated expression of quality investing. Since 2003, TCI has focused on monopolylike global platforms with high barriers to entry and strong pricing power.⁷ ⁸

These often include infrastructure, exchanges, payment networks, and ratings agencies, among others—businesses that function as tollkeepers to economic activity. Their entrenched positions and essential roles create durable earnings streams that can withstand economic and technological disruption.

TCI’s average holding period of roughly eight years reflects Hohn’s belief that “good companies stay good and bad companies stay bad.”⁹ This long-term discipline allows durable advantages to fully compound.

A Century of Ideas, One Clear Conclusion

Despite different eras and styles, Graham, Buffett, and Hohn converge on a shared insight:

Long-term success comes from owning high quality businesses at reasonable prices and holding them long enough for compounding to work.

Research supports this. Quality focused strategies have historically delivered higher returns with lower volatility, while international markets show even greater dispersion in business quality—creating more opportunity for disciplined quality selection.¹⁰ ¹¹ ¹²

Why Tollkeepers Matter Now, More Than Ever

As technological and economic disruption increasingly challenges traditional business models, tollkeeper businesses—from physical infrastructure to data networks, platforms, and regulated assets—become ever more central to economic activity. These companies benefit from:

• High barriers to entry

• Structural pricing power

• Predictable cash flows

• Long growth runways

In a world defined by scale and scarcity, owning the toll bridges—not just the traffic—has become one of the most compelling long‑term investment frameworks.

Applying Durable Quality in Portfolios

For investors looking to implement this philosophy, Tema offers two complementary ETFs, uniquely inspired by Chris Hohn’s quality-focused investment approach:

Tema Durable Quality ETF (TOLL) invests in durable quality companies that possess strong financial characteristics like recurring revenues, dominant market share, and high returns on invested capital.

Tema International Durable Quality ETF (ITOL) applies the same disciplined framework outside the US, where many world-class tollkeepers—often with no US equivalent—currently trade at meaningful valuation discounts.¹² 

For more of our research and recent insights on durable quality and more, view and subscribe to our insights.