Conglomerates like Berkshire Hathaway are popular among the investment community due to their long-term track record of outperforming the market. Long-term shareholders of the company managed by Warren Buffett have seen their investment grow by a compound annual growth rate of 20.1% since he took the helm in 1965, which crushes the broader market's average of about 10%.

Of course, all that growth is related to past performance. Can investors today find a small-cap conglomerate with the potential to put up long-term returns similar to Berkshire Hathaway going forward? Enter Nelnet (NYSE: NNI). Here's why this wildly undervalued small-cap conglomerate is a perfect buy for your portfolio in 2023. 

Nelnet started its business a few decades ago as an originator of student loans. Its business model was financing and securitizing loans to create highly reliable streams of cash flow. There are two characteristics of student loans that make them great for lenders like Nelnet. First, they last a long time, sometimes earning interest on a loan for decades. Second, they have bankruptcy protections from the U.S. government, making them a lot less risky than other consumer loans. Over the years, Nelnet built up its loan book to over $10 billion, a book that generated over $100 million in cash flow each year. 

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Source Fool.com