Private Equity in
Saskatchewan
Is the province’s construction industry a
good private equity investment choice?
By Lisa Kopochinski
PRIVATE EQUITY
Private equity may seem like an unknown and mysteri-ous
subject. If you ask most people what private equity
means, don’t be surprised if you receive a perplexed look
in response.
“Many people view private equity as being more complicated than
it is, but at its root it is the act of selling some of the equity of a private
business to a third party,” said Eric Clark, partner and managing di-rector
of business development for PFM Capital, an employee-owned
investment management firm in Regina. Founded in 1989, PFM man-ages
private equity and venture capital funds.
As chartered financial analyst for PFM, Clark plays an integral role
in managing relationships with PFM’s key stakeholders, strengthen-ing
the firm’s investor base while sourcing high-quality investment
opportunities for its portfolios.
“Typically, a company will require an investment either for growth
or expansion, launching a new business line, a management transi-tion
or to replenish working capital,” he said. “When that happens,
they would contact a private equity investor whose investment
“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 many great
Saskatchewan-based businesses as we can.”
– Eric Clark, PFM Capital
mandate is a match for the company in question. For example, some
private equity investors have very specific mandates such as only in-vesting
in oil and gas. That investor would then perform due diligence
on the company, industry and management team. If the private equi-ty
firm and potential investment seem like a good fit, they’ll negotiate
terms for a potential investment.”
The whole process often takes months, so it is always good to start
early, he adds.
“There really is no way to rush a private transaction because once
an investment is made, you’re stuck with each other,” said Clark. “A
lot of due diligence needs to go into a new relationship in the be-ginning
in order to mitigate the chance of disputes down the road.”
Clark says through its work with various Saskatchewan-based
firms over the years, PFM learned that small to medium-sized
businesses had a fundamental need for capital that was not be-ing
met out of Canada’s typical financial centres such as Toronto,
Calgary or Vancouver.
“That realization was the launching point for PFM to start man-aging
private equity funds in 2001, and we’ve been managing private
equity capital ever since.”
PFM essentially raises capital in two different funds – SaskWorks
Venture Fund Inc. and Apex Investment Fund. SaskWorks is a
Saskatchewan-based labour-sponsored investment fund with more
than $425 million in assets
under management that is
raised from more than 28,000
Saskatchewan residents. The Apex investment fund is designed for
high net worth individuals and institutions. Both funds invest into
high quality private companies based in Saskatchewan.
“We often focus on the sectors that make Saskatchewan’s econo-my
thrive, but we’re really a diversified investor and will look at mak-ing
investments in a variety of industries,” said Clark. “We choose our
investments using a rigorous due diligence model that takes into ac-count
the company’s past performance and future growth prospects,
PHOTO COURTESY OF PRIVATE EQUITY
FMSTOX/SHUTTERSTOCK.COM saskheavy.ca | Quarter 3 2017 | Think BIG 51