Quantum Investment Strategy
Quantum targets privately negotiated equity or equity-related investments in a diversified portfolio of companies managed by proven management teams that have sustainable competitive advantages within well-defined segments of or strategies in the energy industry. Quantum remains committed to the same investment strategy it has successfully employed and refined since its founding in 1998, incorporating a disciplined and prudent investment approach, patience in deploying capital and a commitment to making only those investments that are expected to generate superior risk-adjusted rates of return.
Focus on sectors where we possess domain expertise. Quantum’s cycle-tested and multidisciplinary team of energy professionals invests in sectors where we possess considerable domain expertise, with a primary emphasis on the oil and gas upstream,midstream and power sectors, but will consider opportunities across the entire energy industry.
Invest in companies at multiple stages of their life cycle. Quantum invests in companies ranging from start-ups to well-established enterprises seeking expansion capital, providing equity commitments between $100 million and $400 million to companies with a pre-money enterprise value ranging from zero to $1 billion. Quantum serves as the lead financial sponsor in most of its investments, but when appropriate will make strategic minority investments in compelling situations.
Partner with exceptional and complete management teams. Quantum seeks to partner with management teams that collectively possess the skills and expertise to be a best-in-class operator, can succintly articulate a demonstrable track record of value creation and capital allocation, and embrace a focused strategy based on the team’s collective sustainable competitive advantages.
Perform in-depth due diligence on each investment. The combined in-house financial, technical, operational, executive-level, legal and tax expertise of Quantum’s investment team enables us to quickly perform a detailed analysis of each opportunity we evaluate to fully understand the opportunity and risks of an investment. After fully vetting the business plan with management, we perform internal technical and operational reviews of the existing and/or targeted assets and incorporate detailed financial modeling with a forward looking evaluation of potential exit strategies.
Actively support each company in our portfolio. Quantum maintains an active and collaborative relationship with each of our portfolio companies and has the resources to truly be a value added partner. Whether a Quantum portfolio company is looking for financial or strategic advice, seeking input or guidance on technical or operating challenges or practices, or looking for a sounding board or some extra help in closing a business transaction, Quantum’s investment team is standing ready to serve our portfolio company management teams when needed.
Employ risk management tools to provide downside protection. Quantum works with each of our portfolio companies that have exposure to commodity prices to implement a systematic and consistent risk management program tailored to their specific assets and activities. This strategy enables each company to protect cash flows, enhance liquidity and limit the effects of short-term volatility in commodity prices while maintaining a substantial portion of the upside potential of commodity price increases for long-term capital appreciation.
Maintain a disciplined exit approach. Quantum is a patient, long-term investor that anticipates working with a company for a period of three to seven years to maximize the value of its business. When market conditions warrant, however, we are capable of moving quickly to achieve an opportunistic monetization. Our team has a proven track record of maximizing returns through creative and innovative financial engineering and identifying strategic buyers willing to pay a premium valuation, which has resulted in superior returns for our investors and management teams alike.