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In order to ensure that we make the best possible investments on behalf of our investors, we have created a set of guidelines for potential investments. They are:
Due Diligence:
Our due diligence process includes extensive discussions with senior management, background checks, and an evaluation of financial, operational information in relation to the business model assessment by one of our industry expert advisors. On site evaluations are the norm where Crestview is the lead investor.
Discount to tangible net asset value:
Our key strategy is to invest in smaller public companies that are trading at a significant discount to their underlying enterprise value. These discounts are derived from the fragmentation and inefficiency of these markets.
Not Distressed:
The most common misunderstanding of our business is that we invest in distressed companies. Crestview seeks to invest in companies that have an excellent management team, a good client base and a solid business strategy. We fund companies to assist them to grow their core businesses, for acquisitions, to add new product lines or to strengthen their balance sheets.
Don't Invest in Pre-Revenue Models:
We typically invest in companies have executed contracts and revenues. Even in the case of a biotech or life science business, we prefer that our portfolio companies derive revenue from joint ventures and milestone payments. We make exceptions only when we believe that compelling evidence exists for substantial revenue growth in a projectable time frame.
Diversification:
We will only invest a maximum of 8% of our fund in any one investment. In addition, our portfolio is balanced across a broad range of products and services in the health care, technology and energy companies in the U.S. and U.K. We also do a significant number of investments outside that spectrum.
Exceptions are widespread in a highly entrepreneurial space where our depth of experience is as important as these guidelines. Nevertheless, they serve as well in markers for discipline and consistency in our Investment Committee process.
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