Projects undertaken by OIF are typically configured around a “Project Joint Venture” (JV) architecture whereby a specific entity (SPE/SPV) is formed to align the parties for a ‘debt/equity’ capitalization model. The ‘parties’ to the JV include the project owner/managers and OIF, with the specific debt/equity structure being set on a case-by-case basis. OIF advances funds (capital) to the JV entity based upon the project qualifying for an Insurance Policy that protects the investment risk while also setting a collateralization structure that utilizes the insurance policy as the primary collateral. This model sets a low/no risk value proposition to capital invested eliminating the problematic burden and debate associated to the traditional debt/equity equation requiring personal (Principal) guarantees, LTV vs. LTC debates and ’skin-in-the-game’ rationale.
OIF takes an equity stake in all ventures to keep each management team focused and dedicated to the business mission with annual audits and performance measures being a requirement of each project undertaken. Projects that fall out of performance are subject to accelerated restructuring and management team replacement and forfeiture of equity positions.