Carlyle Group Raises $2.5 Billion for International Energy Deals

Carlyle Group LP has raised $2.5 billion for an international energy fund as the private equity investor bolsters its oil and gas firepower after the collapse in prices.

Marcel van Poecke, head of Carlyle International Energy Partners, said the Washington-based firm closed the fund after commitments from 160 investors. The new fund, which will invest exclusively outside the U.S., will increase Carlyle’s war chest for energy deals to over $10 billion, the firm said.

“This is one of the best periods, if not the best, to invest in global energy,” van Poecke said in an interview.

Carlyle joins other private equity firms, including Blackstone Group LP, KKR & Co. and Apollo Global Management LLC, in raising extra funds for energy deals as oil and natural gas companies struggle to stay afloat. Oil prices have plunged more than 55 percent over the past year to about $50 a barrel. Blackstone President Tony James said in January his firm was “scrambling” to invest in energy assets.

Van Poecke said he expects a buyer’s market to emerge outside North America in the second half of the year as executives accepted lower valuations for their businesses. With most of the large oil companies saying they aren’t seeking deals to concentrate on cutting spending and maintaining their dividends, private equity may have a relatively open field.

The $2.5 billion international energy fund is the largest ever first time fund in Carlyle’s 28-year history, the company said in a statement. Carlyle surpassed a $1.5 billion fundraising target.

“This has been a remarkable fund raise,” said Carlyle Chairman Daniel D’Aniello.

Investment Targets

On top of the new fund, Carlyle manages several other funds focusing on oil and gas in the U.S. The North American funds suffered in the last quarter as the value of their investments plunged tracking the drop in oil prices. The buyout group’s profit declined 65 percent in the fourth quarter.

The international fund has already made its first investments, buying, together with oil trader Vitol Group, into refiner Varo Energy. It has also invested in Discover Exploration, an oil exploration company focused on Africa, and HES-Hestya, a European-based oil storage group.

Van Poecke said the next wave of investment will target exploration and production companies, particularly in the North Sea.

“Carlyle’s broad energy platform, plus a significant amount of dry powder, enables us to leverage current opportunities and market volatility across the global energy markets,” he said.

Van Poecke joined Carlyle in May 2013, although he has a long relationship with the private equity firm, having run Petroplus, a European-based refining company that the buyout group owned between 2005 and 2007.

Carlyle had total assets under management of $194.5 billion as of Dec. 31, it said.