Asset management

Joint venture Pareto and Staur

In 2012 Staur entered into a joint venture with Pareto Asset Management and formed the Private Equity fund Pare to Staur Energy (PSE).

Background

PSE is targeting companies and management teams within the sector where Norway, Pareto and Staur have a competitive advantage as well as extensive networks and expertise. Based on strong fundamentals, we believe the energy and energy service sectors will show a high degree of value creation over the next decade. By targeting small/mid-cap companies reflecting strong growth, high margins and low debt, Pareto and Staur have shown the ability to identify and execute exclusive deals. The existing owners are looking for an active and strategic investor with a strong financial backing able to position the company for future industrial or public sale. Pareto and Staur have deep knowledge with the value chain, the end users and the critical suppliers in the sector. Based successful on historical co-Investments Pareto and Staur have formalized a long-term partnership in order to take full advantage of investment opportunities.

Structure

Pareto Forvaltning is responsible for the Active Portfolio Management Agreement, back office services, reporting and compliance functions towards investors and authorities. Staur is a dedicated and an active owner including the executive chairman position and/or board members in PSE’s portfolio companies. Staur works closely with the portfolio companies to optimize daily operations and strategy.

Value proposition

Develop well run, profitable companies presentable to industrial or public owners.

  • Use Pareto and Staur’s network and knowledge to target and verify attractive companies
  • Key to success is choosing and developing the right management team and culture for strong long-term growth
  • Prioritize, strategically position, grow and restructure
  • Not necessarily the newest technology, but optimal and efficient operation in politically stable countries

Goal

To deliver 20% p.a. net return without use of financial leverage.

Pareto Staur Energy

Buy-out, growth equity investments in five to nine – primarily small-cap energy & energy services companies

First closing was successfully made in November 2011. Second and third closing during March and June 2012. Maximum commitments is USD 220 million

  • Duration 6 years (1 + 1 year)
  • Predominantly companies with management or technical expertise that originate from Norway, but operate globally

A fully transparent and cost effective ”Active Portfolio Management Agreement”

  • Management fee: 2% p.a., Success fee 20% above a preferred return of 8% p.a.
  • No additional structuring, monitoring or running costs. Transaction costs are expected
  • European waterfall, no catch-up

In order to align interests, the four dedicated managers co-invests a minimum of USD 20 million

In order to align interests, the managers co-invests a minimum of USD 20 million Pareto Staur Energy is structured under Pareto Forvaltning’s asset management license to allow investors a high degree of investor protection. Pareto Forvaltning is regulated by the Financial Supervisory Authority of Norway.