Frank Giustra is a well known Canadian business icon with a track record as one of the more successful natural resources investors in the last 35 years. Frank, born 1957 in Sudbury, Ontario, came from humble beginnings graduating from high school in Aldergrove, British Columbia in 1976.
Giustra spent a year playing trumpet in the music program at Douglas College before he made his fateful life-defining switch to business and finance. Perhaps a chance meeting with a stock broker set up by his father, a Sudbury nickel miner, had taken root, regardless thus began his steady climb to power in the natural resource investment community.
Before he left Merril Lynch (NYSE:REK, Stock Forum) in the early 1980's to create a resource-financing group in Europe for Yorkton Securities, he had already made a name for himself. His drive and his passion then transformed the company in a major player in the international mine financing and in 1995 he was named Chairman and CEO.
Giustra continued to add to his reputation with multiple ventures in both business and philanthropy including the founding of Lions Gate Entertainment (NYSE:LGF, Stock Forum) in 1997 and the establishment of the Radcliffe Foundation in 1997. Currently he acts as CEO to Fiore Financial Corporation, an exclusive advisory services provider to Endeavour Mining.
So what has kept this man ranked for numerous years in the Power 50 list of the most powerful people in Vancouver and made him such a respected natural resource developer with no less than five billion-dollar commodities firms under his belt?
There is a recipe as Giustra described in a recent interview conducted by Tommy Humphreys for CEO.ca, “There are some simple truths in the resource game,” he stated. “The first truth is that you pick a great management team and you wait.”
Easy advice, but how did he go about making his fortune?
Giustra explained to Humpreys, “The big wins are not just doubles and triples. For a ten-bagger to happen you have to recognize a few things before your typical institutional investor or analyst, who waits for all the proof before he or she invests. By that time, chances are it has already made its big move.”
He went on to explain that he finds a good management team with a successful track record, puts in his backing and waits for them to make good on their promises and if they do, he throws in heavy money.
One such example of this approach is his involvement with Petroamerica Oil (TSX:V.PTA, Stock Forum), a Colombian oil and gas firm founded in 2010, which pulled itself from the fire in 2012 to grow from 150 to over 9,000 barrels a day.
After Petroamerica's successful acquisition of Suroco Energy (TSX:V.SRN, Stock Forum), announced just a few days ago, the company now expects to hit 30,000 barrels a day in the next couple of years and Giustra is a firm believer in their stated potential. So does the investor buy in now while the company sits at a market cap of $295 million or throw in when it achieves its production promises?
Giustra explained, “The way to get 10 baggers is not by waiting until they have achieved 30,000 barrels.”
He went on to reiterate, “Waiting for the company to deliver on its promise of 30,000 barrels per day is the job of big banks analysts. Mine is to make most of the money before they do.”
Wise words from a man who seeded Serafino Iacono's Pacific Stratus Energy with $5.0 million in early stage funding to see it become Pacific Rubiales Energy (TSX:PRE, Stock Forum), Colombia's largest non-state owned oil and gas firm worth $6.4 billion.