Follis Opportunistic Fund I (FOFI)

 At FMP,  we specialize in identifying and capitalizing on opportunities within the private equity and credit markets. This is a complex subsector where companies facing financial hardship offer unique investment potential. 

Our experience across credit enables us to identify opportunity on the equity side of the balance sheet - generating outsized returns by acquiring small-to-medium private companies, driving operational efficiency, and leveraging flexible debt and equity investments

Focus: Canadian SMBs with revenue between $500K-$10MM, targeting undervalued or distressed Canadian firms across non-commoditized industries .

• Acquire controlling equity stakes or provide rescue capital to influence operations.
• Implement operational changes—cost optimization, revenue growth, management enhancements.
• Distressed opportunities such as purchasing discounted credit or converting to equity via restructurings.

Distressed debt refers to loans and bonds issued by companies experiencing significant financial difficulties, often leading to default or bankruptcy. Valuing these investments requires specialized expertise due to:

• Complexity: Each situation is unique, with intricate financial and legal considerations.
• Limited Information: Reliable data is often scarce, making thorough analysis crucial.
• Cash Flow Challenges: Distressed companies typically lack positive cash flow, demanding a focus on asset value and restructuring potential.
• Uncertainty: Predicting a company's recovery path is inherently challenging.

This complexity results in illiquidity, meaning these investments can be difficult to buy or sell quickly. 

Our strategy focuses on the "workout" process, where we aim to unlock value through:

• Asset Sales: We may participate in the sale of company assets, such as equipment or inventory, to recover invested capital.
• Restructuring: We actively engage in in-court and out-of-court restructuring processes, potentially converting debt into equity ownership in a revitalized company.

Our team possesses the specialized skills and experience necessary to navigate the complexities of distressed debt. We conduct rigorous due diligence, develop tailored workout strategies, and strive to maximize returns for our investors. 

SMB private equity and distressed credit offers the potential for significant returns, particularly in times of economic uncertainty. By understanding the intricacies of this market and employing a disciplined approach, FOFI aims to deliver superior risk-adjusted performance.