Longbow invests in early stage oil and natural gas companies, oil and natural gas service companies and energy infrastructure companies predominantly focused on Western Canada. Longbow maintains a disciplined investment methodology and is a long-term partner and an engaged shareholder in a small number of high-growth companies.
Our investment strategy is simple to describe, though difficult to replicate.
It's a People Business
Although we use a variety of criteria to evaluate investment opportunities, the heart of our investment decision-making is our evaluation of the people involved. Longbow seeks out management teams that have the skills, experience and motivation to build value for their shareholders. We rely on our long experience of investing in the Canadian oil and natural gas industry and our extensive network of industry relationships to identify and evaluate individuals with a track record of value creation, who have surrounded themselves with a high-quality management and technical team and board of directors.
Our industry relationships extend throughout the issuer, dealer and investment community, which give us access to information and opportunities. Longbow has earned its reputation for being a high-quality and desirable shareholder. This makes us an investor of choice in our investment universe and drives our deal-flow. Our strong relationships with management teams and the dealer and investment community frequently give us the opportunity to be involved with prospective companies from their inception.
We Stick to What We Know
We are oil and natural gas specialists. Each member of the Longbow investment team has spent their career focused on the energy industry and has developed an in-depth knowledge of the industry’s drivers – in all their nuances and detail.
We Have a Unique Relationship with Our Portfolio Companies
Longbow backs management teams that know how to build successful businesses, which they manage in the best interest of their shareholders. The Longbow principals are frequently involved in establishing strategic direction at various points in a portfolio company’s life. Our experience, gained through investing over many business cycles, as well as working in the corporate advisory business, can be critical in helping companies determine when it is the right time to sell, raise money, reorganize or pursue other strategic alternatives.
The expected lifespan of one of Longbow’s portfolio companies is three to seven years. This means that many of the management teams that we back will have been involved with a series of start-up companies over the course of their careers. Because management teams enjoy dealing with us and because we are a supportive and constructive shareholder, Longbow has the opportunity to invest with serial entrepreneurs who have a proven track record.
Longbow’s close relationship with our portfolio companies allows us to be active and effective in protecting our investments when times are challenging, by ensuring that each company is taking the steps required to protect and grow our capital.
Funds are Long-Only and Unlevered
We do not use direct leverage or financial derivatives to enhance our returns. The oil and natural gas industry is inherently risky, and we feel that layering additional risks onto our portfolios in the form of debt or exotic financial products is unnecessary. In addition, we tend to favour management teams that are like-minded and our investments typically also use relatively less leverage than their peers.
We Invest Alongside Our Clients
The Longbow principals are among the largest investors in the Longbow funds. Having our own capital in the funds alongside our investors causes us to evaluate every investment decision from the same perspective as our investors.