Energy & Minerals Group, the investment firm that was spun out from NGP Energy Capital Management LLC, plans to seek $2.5 billion for its next private-equity fund, two people familiar with the matter said.
The firm, which has offices in Houston and Dallas, completed raising predecessor Energy & Minerals Group Fund II LP at $2.2 billion in December 2012. That pool, the first to be marketed without NGP, started fundraising in early 2011 with a $2.5 billion target.
Private-equity firms are competing to raise multibillion-dollar funds to take advantage of the expansion of the energy industry. Warburg Pincus LLC plans to gather its first fund dedicated to global energy investments, two people familiar with the matter said this month. First Reserve Corp. has amassed close to $2 billion toward a $5 billion cap for its latest energy fund. Washington-based Carlyle Group LP (CG) is seeking about $1.5 billion for an energy fund that will make investments outside the U.S.
Credit Suisse Group AG (CS) will act as placement agent for the new EMG fund, said the people, who asked not to be identified because the information isn’t public. John Raymond, chief executive officer of EMG, didn’t respond to an e-mailed request for comment.
EMG makes equity investments of $150 million to $400 million in companies, according to its website. The firm invests across the global natural-resources industry, including in upstream and midstream companies. Midstream energy companies gather, process, transport and store fuel. Upstream companies focus on the exploration and production of oil and gas.
Earlier this month, EMG helped lead an investment in an affiliate of Aubrey McClendon’s American Energy Partners LP. McClendon, the former Chesapeake Energy Corp. (CHK) chief executive officer and chairman, gathered $1.7 billion from EMG and other private-equity firms to acquire and develop a leasehold position in Ohio’s Utica Shale.
McClendon, who built Chesapeake into the second-largest U.S. natural gas producer, was ousted from the company in April after questions were raised about his personal borrowing from some of the company’s biggest financiers and activist investors.
EMG is led byRaymond, who was previously head of the midstream investment group at NGP. Irving, Texas-based NGP Energy Capital Management, partly owned by Carlyle Group LP, manages $13 billion in funds focused on natural resources.
While part of NGP, the team gathered $1.4 billion in 2007 for NGP Midstream & Resources LP, its initial fund. That vehicle makes investments in the midstream energy, mining and minerals sectors.