Warburg Pincus Is Said to Plan First Global Energy FundSabrina Willmer
Warburg Pincus LLC, the private-equity firm that helped discover Ghana’s largest oilfield, plans to raise its first fund that is dedicated to global energy investments, according to two people familiar with the matter.
The fund, which is expected to start gathering money next month, doesn’t yet have an official target. The New York-based firm may seek more than $2.5 billion and plans to offer fee breaks to existing clients and those that write big checks to the fund, said the people, who asked not to be identified because the information isn’t public.
Warburg Pincus is among a number of private-equity firms seeking multibillion-dollar funds to take advantage of energy deals and investor appetite for the industry. New York-based Blackstone Group LP last year raised its first global energy fund at $2.5 billion and Apollo Global Management LLC, which is also based in New York, gathered more than $1 billion for a natural-resources vehicle. Washington-based Carlyle Group LP is seeking about $1.5 billion for an energy fund that will make investments outside the U.S.
Jeffrey Smith, a spokesman at Warburg Pincus, declined to comment on the fundraising plans.
Warburg expects to split energy deals evenly between the new fund and its main offering, said the people. The firm in May raised an $11.2 billion global private-equity fund, making it among the largest pools raised following the financial crisis. The flagship fund invests in energy, financial services, health care, technology, media and telecommunications, and consumer, industrial and services companies.
The energy fund will take the same approach as the firm’s global private-equity pools, investing in oil and gas exploration and production, midstream, power generation, oilfield technology and related services, as well as alternative energy development.
Warburg’s global energy team is led by Peter Kagan, who joined the firm in 1997. He helped originate Warburg’s investment in Antero Resources Corp., which raised $1.57 billion in an initial public offering this month. Antero, the most active driller in the Marcellus Shale, increased the size of the IPO.
The firm’s two other senior partners focused on energy investments are David Krieger and In Seon Hwang. Krieger is a director of Kosmos Energy Ltd., a venture that discovered the Jubilee Field off the coast of Ghana in 2007. Hamilton, Bermuda-based Kosmos, which is also backed by Blackstone, raised $594 million in its 2011 IPO. Hwang worked on the purchase of Houston-based Targa Resources Corp., a natural-gas producer that went public in 2010.
Vice Chairman Howard Newman, who was involved in energy deals including Targa and Kosmos, left Warburg Pincus in 2006. Newman is president and chief executive officer of Pine Brook Partners LLC, which invests in the energy and financial-services sectors.