Cadent is one of the most experienced investment teams focusing on smaller companies across the energy industry. Since the early 1980's, the Cadent Principals have built some of the most successful energy companies, resulting in exceptional financial returns for both our investors and the management teams of those companies.
The key to our success lies in our focused and disciplined investment approach, which revolves around the following themes:
A high degree of specialization, together with an extensive industry network, provides Cadent with a competitive advantage in executing transactions and adding value to its portfolio companies.
Diversification across the various energy sub-sectors
Unlike many of our competitors, Cadent invests across the energy industry, including the upstream, midstream and downstream sectors. As cycles occur in varying segments, opportunities and challenges develop that require both investors and management to adapt their strategies. By following the various sub-sectors and understanding the dynamics of their interaction, Cadent believes it can generate deal flow, enhance investment performance, and reduce risk.
Focus on small products and services companies with niche strategies
We generally commit between $25 million and $75 million per investment, at once or over successive stages.
Rigorous investment process
Cadent's investment evaluation processes are conducted by the Principals with outside assistance from professional firms and consultants. Potential transactions are thoroughly reviewed using a proven methodology developed by the Principals over the course of their careers. Particular attention is given to the target company's growth strategy, competitive advantages, and exit options.
Ability to play a significant role
Given the size of companies that we are targeting for investment, we generally own controlling ownership interests. In certain instances we have supplied growth capital as a minority investor, but we require board representation and other protective measures under these circumstances.
Conservative capital structure
Given the industry's cyclicality, Cadent does not seek to generate returns through high financial leverage.
Partnership with management
Cadent is an active investor who works closely with the management teams of its portfolio companies to create long-term investor and management shareholder value. We contribute our experience, skills and industry relationships.
Alignment of incentives
We believe in providing management teams with strong incentives to meet our common goals.
Harvesting the benefits of a clear strategy requires time and patience. Our goal is to work with management over a period typically spanning four to seven years to build value through revenue and cash flow growth.
Over the years, successful entrepreneurs and business leaders have come to us when looking for a partner to help build their companies. We work hand-in-hand with each management team to come up with solutions that are creative, logical and value-enhancing.