"Never count on making a good sale.  Have the purchase price be so attractive that even a mediocre sale gives good results." — Warren Buffet

Investment Approach

Purchase: Finding Unique Situations

We seek to enter business opportunities at attractive prices. Most of our assets have been obtained through court ordered sales, or other similar processes. We use responsible capital structures that provide time to optimize value and focus uncovering long term value by providing proper governance, management and financial planning.

 

Value Add

Governance: Shareholders own the business and elect directors to represent their interest as owners. Directors allocate certain responsibilities onto management, but retain the balance so that management must discuss plans and more importantly deviations from approved plans. This process is what holds a management team and its Directors accountable. When appropriately administered, Directors meaningfully increase the overall quality of the business decisions made, as they are experienced business individuals.

 

Creating Alignment: At Durum, all of our Directors have significant investments in the business. We do, as Warren Buffet so famously states, “eat our own cooking”. From a management perspective, our Directors are wonderfully seasoned business veterans who serve as deeply engaged partners and mentors. This balancing of power keeps us all alert and ultimately reduces risk, enhances quality of decisions, thus creating value.

 

As our governance model creates value with shareholder alignment, at Durum we seek to do the same with our other stakeholders. In real estate, accomplishing alignment with various levels of government and the community are crucial. When it is done right, they become advocates of our efforts rather than our adversaries.

 

Finding common grounds with stakeholders is not always easy – it requires us to “take a step back” and listen carefully. It is this thoughtful process that often leaves us in the enviable position of going with rather than against the currents.

 

Team oriented: People make businesses happen, so building teams is one of our core competencies. Not every project needs the same team, therefore we augment our core team with quality consultants as required. Thoughtful, hard-working, passionate individuals in well-coordinated cooperative teams meaningfully increase the chances of success. This principle is simple, yet generating the environment is much more challenging. At Durum our corporate culture embraces a wide spectrum of personalities, aptitudes and required skills, but we all share a common set of values. We believe we got this right; we are humbled by the quality of our team members, both individually and collectively.

 

We operate under the simple maxim: “working to make the world a better place”. While it is an audacious goal, it creates a corporate culture in our organization and attracts quality innovative individuals to our team.

 

Hold, Sell, Develop: Planning for the Future

We are here for the long haul. In all that we do, our decisions must meet the tests of time. Many years from now, we aspire to look back on the work that we have done and be proud of the results we achieved. Given this long-term horizon, our biggest asset is our reputation. People behave differently when they’re trying to achieve quick returns resulting in taking unnecessary risks. While we aspire to execute at a rapid pace, we methodically plan to assure the spectrum of results are consistent with our tests of time.

 

Our financial goal is to maximize Net Present Value (NPV). There are only four inputs in a NPV calculation: Money in, Money out, Time and Risk. Each of these attributes serves as a lever of value creation. Our goal is to get maximum returns safely back to our investors as quickly as reasonably possible.