The New York-based firm will open an office in Calgary, Kristi Huller, a KKR spokeswoman, said today in an e-mail. The Wall Street Journal reported the expansion yesterday.
KKR, which is setting up a $1.5 billion fund to focus on minerals and oil-and-gas development, has backed several U.S. shale-gas exploration and production ventures in the past five years. KKR will join other U.S. private-equity firms including Warburg Pincus LLC that are investing in Calgary energy firms.
“One of the phenomenon that’s happening in the Canadian market is the predominance of private equity funds as players,” Ian Russell, chief executive officer of the Investment Industry Association of Canada, said yesterday in an interview from Toronto. “That’s a really big story. What I see in all of these deals is the presence of these private equity funds out of the U.S.”
KKR in 2009 and 2010 invested in East Resources Inc. and Hilcorp Energy Co., early-stage gas-drilling companies that it sold to larger rivals within a year. In 2011 it made its largest investment in the sector, leading a $7.2 billion leveraged buyout of Samson Resources Co., a Tulsa, Oklahoma-based natural gas producer. It continues to own Samson. It has also partnered with Comstock Resources Inc. to help develop its Eagle Ford shale acreage in South Texas.
Bloomberg reported in March that KKR was seeking to raise $1.5 billion for a fund that will target minerals as well as oil-and-gas development. The firm said in October the fund had closed on $1.4 billion in commitments.
KKR’s entrance into Calgary comes as announced Canadian energy takeovers slid to $25.1 billion last year, the lowest since 2004, according to data compiled by Bloomberg. Energy equity financings in Canada fell to the lowest since 2008, the data show.