Energy PE Recruiting
Can anyone give some insight on Energy PE Associate recruiting and the tops funds that operate in the energy space? Not specifically oil and gas, but any general insight is appreciated. Also curious to how the pay differs from corporate PE and if there’s any differences in recruiting for energy PE at mega funds vs traditional PE.
Thanks!
throwawayaccount1098248, bummer your thread hasn't had a response yet. Sometimes bots are smarter than humans anyways:
Hope that helps.
They recruit through HHs the same way any other PE fund does. First Reserve and Blackstone Energy Partners are two marquee names that come to mind, although the space as a whole has had a rough go as of late, especially funds with a vintage just prior to the 2014 oil bust.
Don’t know anyone that considers First Reserve a marquee name in energy PE anymore.
Used to be a top name, lost a lot of luster when a noticeable amount of their portcos went bankrupt. Sounded like more went bankrupt than stayed alive.
https://www.wsj.com/articles/first-reserves-funds-pitch-south-1435787952
Article here shows a longer trend of lackluster returns.
Definitely agree, I recall First Reserve being one of the hardest hit energy funds. Lot of their partners ended up losing their carry. But, as far as energy-only goes I think they’re still one of the larger funds if I remember correctly.
KKR gives First Reserve a run for the money, but FR still is king at lighting LP money on fire. Their biggest disaster was actually a helicopter business supporting off-shore drilling vs. KKR who only made an abhorrent call on natural gas prices.
Energy PE typically falls under infra PE. This may help you find information about recruiting. Megafunds have teams for infra PE and some MM funds are growing pretty fast. The biggest Canadian pension funds also run infra groups with $10-20 billion AUM. If you want a complete list, simply google “biggest infrastructure funds” and you’ll likely hit a top 50 or 100 list and some of these may be hiring atm.
As mentioned by the other poster, HHs typically run the show, but I’ve seen groups advertise on their own websites. Pay is typically in line with traditional PE from my experience.
I dont think thats right. Midstream yeah, but I cant see infra funds buying shale assets or oilfield services companies..?
I was mainly speaking related to non-O&G investments.
In my experience, about half of the "pure" Energy funds (primarily based in Texas) do NOT use a headhunter, and actually rely much more heavily on references (through existing Investment Professionals' connections or via surveying their colleagues at the various top tier energy IBs for a short list of analyst candidates that they might recommend). I won't delve as much into the MF Energy space, except by saying that the only teams that seem like they will be active and/or looking to grow and deploy substantial capital over the next few years are Apollo, Warburg and BX (unsure about Carlyle). Warburg and Blackstone are actively fundraising new energy funds. KKR (Real Assets)/TPG have had some struggles and I'm not aware of any plans to raise new money as of late. Bain doesn't really do Energy.
In terms of large-cap funds: EnCap, NGP, Quantum, Riverstone, ECP (last two have P&U in addition to Energy) are all doing well at the moment, at least from the standpoint of a prospective Associate who's looking to enter the space and potentially stay with the firm from a short-medium term. Quantum and EnCap have both recently raised massive funds and NGP is also in the process of raising a new fund. ArcLight, EIG and BlackRock are more infrastructure-focused but also worth considering. As the poster above mentioned, First Reserve has really struggled as of late. I don't think it's a deal breaker but it is something to keep in mind.
There are some solid names across the $500 MM to ~$2 Bn fund space that are expanding/deploying capital and could have more clear cut opportunities for longer-term seats: The various NGP-spin offs (Edge, Pearl, Carnelian), Post Oak, Juniper Capital (very active lately, backing new companies), Waterous' fund (some ex-KKR guys have left to head over there), Kayne Anderson, Lime Rock, Old Ironsides, Tailwater (mainly midstream), EIV (also midstream). I've heard secondhand that Denham has had some issues (culture, sub-par realizations). I'm pretty sure TPH Partners has not been very active.
Pay will generally be very competitive across the spectrum, and likely in line with other "industry-focused" funds, such as in the TMT or Consumer space. Obviously, I don't know the specifics for each fund but I'm going off of what I've heard from colleagues and gathered when going through recruiting.
Some OFS focused funds in that $500-2B group too, e.g. SCF & CSL
First Reserve / Tailwater used Dynamics, MSEP used SG Partners, ECP / Pine Brook used CPI for their Energy fund (Oxbridge for FIG). Don't believe NGP used a headhunter this cycle though
Mega funds are covered throughout with CPI having the most but know SG had some BX opportunities
Any thoughts on ECP? Especially interested in any info on their credit platform.
NGP, Encap, basically all these "line-of-equity" funds are having lots of issues with their existing portfolio companies. Most of them are zombies. I see these management teams come to us looking for new capital to recapitalizes the companies all the time because NGP/Encap won't fund more dollars into them and need to exit them.
The public market is shut for E&P IPOs and the public companies aren't doing cash acquisitions either. So these funds are pretty much stuck.
Thank you for the comments! r2d2_ ,CorneliusLux ,high hopes, DalaiLama ! Would you guys mind commenting on O&G/energy distressed investing space please? Would appreciate learning about whether it's a large opportunity set, whether and how an analyst can add value (what's the analyzable component in these situations, esp. how do they differ from non-energy distress), as well as players and recruiting preferences, thanks!
The distressed players will mainly be the debt focused funds: EIG, Oaktree, Chambers Energy, Apollo (although they do a lot of traditional O&G PE), Aries, Stellus, to name a few. Oil & Gas companies are going bust all the time and there's plenty of opportunistic investors waiting around the hoop to scope up their assets for cheap.
Energy distressed is a very difficult business - and very few have done it successfully over any length of time. There are a lot of players that have flooded the space in the last few years looking to make a play on a rebound (fingers crossed) in energy prices. The distressed space is easier to break into IMO because you don't need to source the management team and because the restructuring on an investment can include direct equity, high yield, senior credit, or some combination thereof - opening up a larger group of funds / types of capital. The direct equity players (traditional upstream PE) simply do the same investment over and over, and if the original management team is successful, they sell the asset, and give them another chunk of cash to try and develop another asset - so the best teams tend to be "sticky." If it comes down to losing sleep over whether or not you accept either the Blackstone, KKR, or First Reserve offer, you should be so lucky.
What are thoughts on the energy groups at the megafunds (KKR, BX, Warburg, TPG, Apollo, etc.)?
Would also be interested to know
Would be curious to get an update on the landscape as it stands at the moment.
If you mean on-cycle landscape, know Apollo, KKR and TPG have extended offers this week. BX had interviews but can’t confirm offers. Black Rock (Old First Reserve) is having interviews next week. Missing a few here, so not a comprehensive list.
Thanks, ASC. I guess I should have clarified a bit. Good to know that the funds you mentioned above are all still hiring for their energy investing practices. I've heard a few rumours about some of the big funds running into significant headwinds (Riverstone comes to mind). Others look like they may not be able to raise another fund at all, or if they do, will have to downsize significantly? Wanted to see if anyone had more specific details.
As far as I know, they use traditional headhunters like most places. Oil and Gas in general is very “connection” heavy and daddy’s friend can land you a PE gig easily. I know CPI, Dynamics, and SG are active.
One question to the more familiar people in the area (I will begin working in August but in a NYC group), do you know if the traditional time frame is still the same for oil and gas recuriting? I think ECP requires 3 years of IB, so are they pushing recuriting back one year or its similar early timelines that the mega funds/UMM follow?
Any information on MIRA? Good place to exit to?
Limited first hand experience on my end... they're definitely a more infrastructure-centric group vs. traditional energy PE. Seems like they've been trying to hire junior guys for a while now (based on HH pings, LinkedIn job postings).
FYI, a few of the Texas-based funds are interviewing right now or will kick their processes off after Thanksgiving. Definitely a tough market right now. A couple of the bigger names that have struggled will need to diversify into other niche sub-sectors or come up with new strategies for investing under the "Energy Umbrella" to even have a hope at raising any more money after the huge hits they've taken in the last few years.
Anyone have insight on Encap Flatrock?
I'm curious - any updates on the process? Info on how certain banks placed/which funds were hiring?
Hey guys, I'm curious to know why BAML energy group in Houston doesn't seem to have a good placement in PE based on the LinkedIn searches I've done. Any insights?
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