Hello! – As you may have learned, I joined the senior leadership team at Five States over the summer and am delighted now to be a future contributor to The Producer. Because I have not met most of our investors yet, I invite you to learn about my background by visiting the Team page on the Five States website.
Joining an established company led by a seasoned, respected leadership team is a lesson in both humility and balance. It is allowing me to benefit from the remarkable success, reputation and legacy created by Jim and Arthur, while charging me with the responsibility to navigate Five States through the challenges we face and the opportunities we see. It is on these points… the challenges and opportunities… that are the focus of my efforts and the initiatives described below.
Reimagining Business Development
At Five States, our funds are designed to acquire high-quality producing assets that:
- Produce cashflow to investors within the first few weeks of acquisition,
- Provide a sustainable, long-term cashflow over the fund life , and
- Deliver yields to investors superior to those of comparable investments
Further, we strive to deploy investment capital in these assets swiftly.
To do both, acquire high-quality assets and do it quickly, takes skilled personnel, dedicated resources, and refined processes. These are the building blocks of our current Business Development restructuring initiative.
In September, Five States hired a new Director - Asset Acquisitions and Development to lead the restructuring of our business development function. Although it’s early, I am pleased to report that positive results are already emerging, and we hope to have some announcements in the coming weeks.
Investor Communications and Marketing
Five States’ funds are somewhat unique in that:
- Five States funds are structured to allow individual investors the opportunity to invest in multimillion-dollar energy assets with low/no minimum investment requirements, yet
- They can accommodate those seeking to make sizeable investments of $10 million or more.
- Management can often facilitate liquidity, allowing investors to sell all or a portion of their interests if they choose.
This type of flexibility is almost unheard of in our industry and is why we often field questions about the availability of open funds and the type and timing of future fund offerings. To accommodate investor interest, we are reexamining our investor communications program in the hope of tailoring our communications to different types of investor groups.
Our investor groups have developed over our 35-year history, and each is a collection of investors with a common “type” of relationship with Five States. In some cases, our investors know us well, having invested in nearly all 30+ funds we have managed. Another group of investors inherited their ownership; these investors may not know Five States at all, they simply receive distributions with no knowledge of the original investment or its historical performance. Similarly, investors who are financial advisors know us, but they invest on behalf of their clients who may not. This diversity of experience means that we must have different methods of communicating with our investors. Developing a communications program is an important initiative that will be implemented this year and next.
Brainstorming – Strategic Energy Alternatives
We are receiving more inquiries from investors hoping to learn about future energy offerings that may or may not be in oil and gas production (our core expertise). There is growing interest in unconventional, sustainable energy investments (e.g. wind, solar, or geothermal) and energy-related investments (e.g. carbon sequestration, plastics-to-fuels conversion, gasification/pyrolysis, or Fischer-Tropsch conversion). Five States management is committed to providing our investors with investment opportunities in areas like these if:
- We have, or can build, the requisite technical, financial, and legal capabilities in our staff, and
- We can find opportunities to invest in quality assets such as those described earlier
If this is an area of interest for you, please send Jim, Arthur or me an email to let us know your thoughts.
In closing, the honor I feel to have joined Five States is matched only by the excitement I feel about its direction. Five States is a company with a recognized history of success, working on behalf of a solid group of investors, run by an exceptional staff and led by a management team with a strong vision for the future. I look forward to sharing our successes toward that vision in upcoming updates.
John Kiser, President