ARC Financial Corp. is committed to being a trusted long-term investment partner that can meaningfully contribute to value creation.
The core principles of ARC's investment strategy that support our ability to deliver on this are:
1. Develop and leverage world class domain expertise and energy capital markets knowledge.
Our team of highly experienced professionals provides a balance between individuals with technical and industry backgrounds, and those with backgrounds in investment and corporate finance. We are also unique in our long-term commitment to in-house world class research capabilities that provide insight into the dynamics of oil and gas prices and the macro-business fundamentals driving the Canadian and global energy sectors.
2. Develop and leverage an extensive network of industry relationships.
Developed over the past 25 years, these relationships provide us access to unique investment opportunities, and the talent pool needed to build successful energy companies. In addition, we have access to an extensive network of industry experts and technical advisors. Our partnerships across the business and government sectors provide us with unique insight into impactful policy changes and industry standards.
3. Invest with focus and discipline.
We are focused on the upstream segment of the Canadian oil and gas industry, where we invest in growth strategies to explore, develop and acquire crude oil and natural gas reserves and production. We also invest in companies which provide vital oilfield services and equipment to the upstream sector. Our investment analysis and due diligence processes have been refined over the past 25 years to ensure we have examined and understand the key elements and risks of all investments.
4. Proactively originate opportunities to invest with high quality management teams.
We create investment opportunities by sourcing and committing capital to start-up companies and established companies that have exceptional management teams and well conceived business plans. Our capital is deployed to capture and develop assets with the potential for significant value creation.
5. Ensure management teams are effectively aligned with our capital.
We achieve alignment by having management teams invest directly in their business, and through performance based compensation plans that generate significant wealth for management on successful execution of the business plan. We also ensure there is alignment of expectations regarding corporate governance, go forward financing plans, and exit strategies.
6. Add value to our portfolio companies as a supportive lead investor and trusted partner.
While we partner with other capital providers, we seek to take the lead in virtually all of our investing activity. Once invested, we put the resources of our firm behind our portfolio companies. We work closely with management through board representation to provide strategic advice, deal sourcing and evaluation support, team building, best practices in corporate governance and to share the experience we have gained through our history of having invested and committed $3.9 billion in more than 180 companies.
7. Build “scalable” high quality companies that will attract premium values on exit.
Our objective is to position companies for exit with significant growth potential that will attract premium value from a strategic acquirer, or through some form of a public market transaction such as an IPO, reverse take-over or merger. We look to further enhance value by pursuing exit strategies during periods when valuations are at cyclical highs.
8. Re-invest with successful management teams.
The relationships we have established through our history of investing in the Canadian energy sector create a continual flow of new investment opportunities. We target to invest approximately 50% of a new fund with management teams where we have an established relationship. Our ability to capture these opportunities is predicated on adding value as a trusted long-term investment partner.