Cover Story

Making Sparks Fly: PFM Capital drives growth for Saskatchewan

PFM Capital Partners Johanna Salloum, randy Beattie, Jeff Linner, Rob Duguid and Jason Moser. Photo by Shane Luhning.

PFM Capital’s head office on Victoria Avenue, Regina.

For more than 30 years, Regina’s PFM Capital Inc. has been providing much-needed capital to Saskatchewan’s businesses and entrepreneurs while staying focused on creating long-term value for both its investors and portfolio companies. As Randy Beattie and Rob Duguid reflect on the company’s history and PFM’s newest partners Jeff Linner, Jason Moser and Johanna Salloum look ahead to the future, one thing is certain: PFM Capital is just as committed to the province as it was when it was founded in 1989.

1989 – PFM Capital Inc. is founded by Randy Beattie, Wayne Steadman and Dale Folstad

Looking back

Randy Beattie is the president of PFM Capital, and he has seen both the company and the province rise since PFM’s humble beginnings in the late 1980s. “Prior to launching PFM, I worked for a national corporate finance firm, and saw that the need that Saskatchewan business had for capital was very evident,” says Beattie. “There was a definite shortage and we wanted to help fill the gap.”

Beattie’s partners at the time, Dale Folstad and Wayne Steadman, would spend the next decade working as a corporate finance company, honing their skills and getting the experience and network needed for the company to advance to the next level.

PFM moved into the fund management space in the mid-1990s, seeing the need for locally raised and managed funds and the relationship with current partner Rob Duguid was established. “Our beginnings were modest,” says Duguid. “We started with transactions in the $500k range and have only increased over time. As access to capital improved and we were able to bring more partners in, our transactions went higher to $2 million, and today, our transactions are hitting $40 million or more.”

1993 – PFM begins managing private equity and venture capital funds

Rising to the occasion

In the 2000s, PFM would turn its attention to more than just money. It was also time to create a team that could further the company’s vision and build the capacity needed to keep the momentum going.

2001 – The first SaskWorks Fund is launched

Johanna Salloum is a company partner and senior director of investments at PFM. She joined the firm in 2007 and is proud to call Regina and PFM home. A University of Regina graduate, she earned her business degree with a major in finance and spent time working for a financial advisor before joining PFM. “I decided to focus on fund management instead of individual portfolio management early in my career, and PFM was the perfect place to do that.”

In her time with the company, she too has lived PFM’s remarkable growth. “We have seen our team triple in size, and our assets under management quadruple,” says Salloum. “Our work has become more diligent and
sophisticated which is a testament to our founders and the team as a whole. We have grown and matured along with the provincial economy. Much has changed over the last 15 years for us and Saskatchewan, and our growth shows it.”

Jason Moser is also a company partner and senior director of investments for PFM. He grew up in Weyburn and attended the University of Saskatchewan before spending some time in the military and in Alberta as a portfolio analyst. Eventually, his home province would beckon, and Moser returned home in 2008. “It was a move to be closer to family and friends, and it turned out to be a great decision,” says Moser. Now a member of PFM’s senior leadership team, he too has seen how the company has made significant leaps and bounds during his tenure. “Our funds under management have increased significantly, and so has our ability to create  larger deals,” says Moser. “We’re participating in larger, more diverse deals now, and we’re still able to provide the patient capital needed for companies in all stages.”

Jeff Linner, partner and the company’s chief investment officer, echoes the sentiments of Moser and Salloum. He, like all the others, is a proud Saskatchewanian—born and raised in the land of wheat and hockey. Linner earned his degree from the University of Regina and spent time with another private equity firm before joining PFM in 2009.

“It’s been incredible to be part of the evolution of PFM over the last decade,” says Linner. “The breadth of our team has grown alongside the capital we’re working with. We have learned so many lessons that we bring to the table for our investors and our portfolio companies, and we have established ourselves in a space that is not necessarily easy to join.” It’s proof that the vision Beattie and Duguid had some 30 years ago is paying off for their company, their investors, and the province.

PFM has created its Apex Series of Funds (Apex, Apex II and Apex III) for institutional and accredited investors. The Funds invest into mature and established companies with high growth potential.

PFM also offers its two SaskWorks Funds–SaskWorks Diversified (invested into Saskatchewan-based companies with a focus on management buyouts, manufacturing, oil and gas, and value-added agriculture) and SaskWorks Resources (invested into energy production, energy services, mining and alternative energy solutions).

Let’s make a deal

PFM was founded on the idea that the province needed a local provider of capital for Saskatchewan business, with a focus on mid-market companies and long-term capital appreciation. That commitment remains true today.
“There are more choices for investment than ever before,” says Moser. “However, we’re not transient capital. We know the market in Saskatchewan because we live and work in it. We have an excellent track record that shows our dedication to the province. We’re based where the companies we invest in are, and we’re not going anywhere.”

While the company has seen the extent of its deals grow with time, PFM still knows that equity isn’t all about the size of the transaction. Where there is growth potential for a Saskatchewan company, you’ll find PFM. Unlike ‘flyover money,’ PFM offers patient capital that understands the complexities of working in an economy heavily influenced by commodity cycles. “Our capital is aligned with the real world,” says Moser. “We know that unplanned events can change even the best laid strategy and plan accordingly.” Given what the world has been experiencing for nearly two years, PFM knows well that leaving room for time and money is wise and that patience pays off.

Giving currency

Beyond the money that PFM Capital brings to the table, it also brings the expertise and experience needed to grow a company. After an investment is made, PFM works collaboratively with a portfolio company’s management team to provide advice that adds value. “We’re rarely involved with day-to-day operations and decisions,” says Salloum. “However, we are a partner that has learned a lot over the years and can provide strategic insights to drive growth.”

Linner agrees. “We offer stable capital and experienced partnership that can help navigate both the challenges and opportunities that come with business. When we invest in a company, it’s because we believe in the management team, and we want to see success and growth for them and us.” PFM sees the value in working together in ways that benefit every stakeholder in the mix.

Plenty of sparks

There are many success stories among PFM’s portfolio companies and two stand out as examples of PFM’s commitment to providing both patient money and careful advice.

In 2008, PFM invested in Factory Optical, an optometric dispensary firm with an enthusiastic management team and a vision to create a market-leading firm in the space. PFM provided the capital needed for Factory Optical’s growth plans. Today the company trades under both the Factory Optical and Optiks International brands, has 25 retail locations across Western Canada, and owns the country’s fastest-growing prescription safety eyewear company.

The same year, PFM also saw an opportunity with a small company that had lofty goals and big opportunity. StorageVault, a consumer storage company, started with one location—and PFM got in on the ground floor. Backing the Saskatchewan-based entrepreneur driving the storage firm several times, PFM exited successfully as StorageVault grew its footprint across the country. In December 2021, the company—now with a market capitalization over $2 billion—has 221 stores in Canada and has received conditional approval to list on the Toronto Stock Exchange. Patient local capital indeed.

2019 – PFM celebrates its 30th anniversary

Once and future

The PFM team sees a lot of opportunity on the road ahead for their own firm and Saskatchewan’s entrepreneurs. “The energy transition is opening up many new opportunities for the province,” says Moser. “Lithium, helium, metals and minerals are bright spots, especially with the right infrastructure and people in place. The recent announcements in new projects such as the canola crushing plants are not only great for those companies, but also the ancillary services that are required such as engineering and construction.”

Despite the economic difficulties COVID-19 presented for many sectors, Salloum sees how it too has shifted businesses and opened doors. “The pandemic has shown how vital the idea of ‘local’ is for us, and how resilient our local companies are,” she says. “It has made business owners start to think about and make decisions about where they want to be and how they need to plan for succession. We’re seeing companies becoming available for their next owner or management take over and it’s offering up opportunities for new generations of local entrepreneurs.”

“Overall, the economy is changing. We’re seeing new sectors emerge, we’re seeing people move on, leaving legacy firms for new blood, and we’re seeing established businesses take on new challenges and find new ways of doing things,” says Linner. “It’s an exciting time for us, for entrepreneurs, and for the province.”

2021 – PFM celebrates 20 years of SaskWorks and Apex Series of Funds

Seeing it come together

For Beattie and Duguid, it’s time to reflect on the past three decades and look ahead to what comes next. They can see their successes in the investment ecosystem that now exists in Saskatchewan. Thanks in part to their trailblazing, the province is home to many qualified fund managers ready to bring capital and entrepreneurs together. Through it all, PFM has stayed true to its roots.

For Duguid, he values how PFM has matured into a company with a deep connection to Saskatchewan while it branches out into Western Canada. “While we have always been active here, PFM is now building its reputation as a preferred regional player in investing. It’s incredible to see how far we have come, and how the ‘new’ team is building on the foundation we created.”

“We have worked hard to align our work with the province’s needs, and become a competent, trustworthy fund manager,” says Beattie. “Through it all, we have focused on the local needs and have earned the trust needed to manage people’s money. We’re thankful for the confidence investors have placed in us. We are proud of our record and what we have accomplished so far.”

It’s been 30 years of sparks, and there is still room for more—much more.

As of December 31, 2021, PFM Capital has raised more than $1 billion in capital, invested $935 million into 134 companies and exited 86 companies for $492 million in realized gains.