Mitsubishi Corp., Japan’s biggest trading house and importer of liquefied natural gas, is leading the start up of the first energy-focused private equity fund to be backed by institutions from the country.
The Energy Opportunity Fund LP, which plans to raise $300 million by September 2014, will be run by Mitsubishi-controlled Alternative Investment Capital Ltd., the fund-operator said in an e-mailed statement sent today and dated Oct. 7. It will focus on North American energy assets, the company said.
The development of new drilling techniques has helped U.S. oil production in September rise to the highest level since May 1989. Growing gas output may help the country become the world’s top energy provider this year, the Wall Street Journal said Oct. 4, citing its own analysis.
Mitsubishi and its biggest domestic competitor Mitsui & Co. are boosting their LNG portfolio as Japan idles its nuclear power plants in the wake of the Fukushima disaster. The two Japanese traders last year signed an accord with Sempra Energy of the U.S. to develop a $6 billion gas-export facility in Louisiana. Mitsubishi has committed almost the same amount for Encana Corp.’s Cutbank Ridge gas development on Canada’s west coast.
Mitsubishi’s energy unit accounted for 40 percent of the trading house’s 360 billion yen ($3.7 billion) in net income last year from less than 20 percent two years ago.
Mitsubishi owns 51 percent of Alternative Investment Capital. Daido Life Insurance Co. holds another 25 percent of the fund-operator, Sumitomo Mitsui Banking Corp. 20 percent and Mitsubishi UFJ Trust and Banking Corp. 4 percent.
Japan Bank for International Cooperation and the Shinkin Central Bank are among the Energy Opportunity Fund’s first investors, according to the operator.