Private Equity Investments
What you need to know
Do your research.
That’s the first thing Eric Clark, partner and managing
director of business development for PFM Capital in
Regina, suggests one should do if interested in pri-vate
equity opportunities.
“If a business owner were considering an outside in-vestment,
I’d encourage them to do some research
into the potential investors that are available and in-vest
in their industry. Then the next best thing is sim-ply
reaching out.”
Clark says his firm is always interested in getting to
know new businesses and willing to take a call to
discuss a potential partnership opportunity.
“But private equity transactions are not to be consid-ered
lightly. You can’t easily sell an equity position
in a private company, so it is very important that the
business owners do their own due diligence.”
He says some investors are a better match than oth-ers,
and you’re better off vetting that in the beginning.
“Some things to consider would be the investor’s
timeline, their objectives, their view of the future
and direction of the firm. If their views on those top-ics
don’t match with yours, they may not be the right
partner for you.”
the management team’s background, the industry itself, as well as a
variety of other factors. All in all, our due diligence process averag-es
between three and six months prior to making a new investment.”
Is Saskatchewan’s construction industry a
good investment?
Clark says that in PFM’s experience, Saskatchewan-based manage-ment
teams with the proper resources and support tend to be com-petitive
with companies right across North America.
“In our view, Saskatchewan’s construction industry is no excep-tion.
With the right business model and support, companies in this
sector really do perform well and we’re confident that in the right
circumstance they will a provide a strong return for investors.”
Citing some of the major advantages of private equity as flexibil-ity
and longevity, he said, “When we invest, we’re able to structure
the investment however we need to based on the requirements of
the company. That could mean we use debt, equity or a combination
of both. It could mean that we stage our investment over time, or it
could mean that we help source a new key employee or another in-vestor
prior to investing ourselves. We have a lot of flexibility, which
allows us to tailor investments based on the needs of the company.”
PFM prefers to invest for a minimum of five years, with invest-ments
often lasting seven to 10 years.
“This long-time horizon allows us to be patient, make the
right decisions for the company’s long-term success, and al-lows
a management team the time they need to really deliver on
a growth plan. Together, the flexibility and longevity of a private
equity investment can make it an attractive option for someone
seeking capital.”
When asked how PFM combats the assumption by ma-ny
individuals outside the province that private equity cannot
thrive in Saskatchewan, Clark says that most people here think
Saskatchewan-based enterprises are capable of competing with
anybody, anywhere.
“And they’re right. If people from outside the province don’t think
they should be doing business here, that’s their mistake. In the
meantime, we’ll be here making long-term investments in as ma-ny
great Saskatchewan-based businesses as we can. Now, with that
said, there does continue to be a fundamental need for capital out
there for small and medium-sized businesses. We will continue to
tell our story to those business owners, so that when they need capi-tal,
they’ll know that we’re here and willing to talk with them about
a potential partnership.”
LOOKER_STUDIO/SHUTTERSTOCK.COM
PRIVATE EQUITY
52 Think BIG | Quarter 3 2017 | saskheavy.ca