Fairfax's basic strategy has been to combine new technologies with existing old-line companies and to transform the business practices of the new company. The firm looks for business models that enable it to leapfrog the status quo through the application and implementation of proven technologies. These new technologies either radically alter existing sales and distribution channels, streamline business processes, or fundamentally improve management practices. The firm actively seeks opportunities in the areas of healthcare, security, telecommunications, and government services.
Fairfax focuses its efforts on targeting opportunities or business sectors not typically exploited by the investment community. Generally, Fairfax seeks to build its investments around existing companies that have revenues, cash flow, and an existing customer base. This investment approach reflects the belief that, in many circumstances, the most efficient use of capital is to acquire cash flow and customers, rather than to build a customer base from scratch. The objective is to position and grow a business in a new high growth market that is attractive to investors either as a publicly traded investment or a strategic acquisition. The firm employs a variety of methods to create and grow successful business including:
- Consolidation of privately held players in a fragmented industry;
- Acquisition of a spin-out of a larger corporate entity;
- Acquisition of companies that provide key strategic components to a platform acquisition; and
- Acquisition of a public company in which the firm can acquire a controlling interest at a low multiple.