Comments (62)

 
Mar 30, 2010 - 1:24am

ehf3660:
First Reserve, Quantum Energy Partners, Kayne Anderson Capital, LimeRock Partners, Avista Capital

Do you know how these firms view GS energy IBD in Houston? I was looking at the profiles of the associates at the PE firms and most come from CS or Lehman--only like 2 out of 50 associates worked for GS. Is there a reason for this? Is GS not a target for energy PE firms?

 
Mar 30, 2010 - 10:18am

FunkMonkey:
Lehman (Now Barclays) and CS are the overall top dogs in the energy space in Houston. Goldman is not, which is why you see those particular demographics at most of the energy-related PE firms.

So basically you're saying that Lehman (Barclays) and CS analysts are just beating out GS analysts for the positions? That doesn't seem like it is plausible given that GS typically hires the cream of the crop. Could it be that GS analysts in Houston do not pursue energy PE as much as the analysts from Lehman/CS? It seems likely that the GS analysts would have a good shot at landing a position at a megafund.

Also, I have heard that the analyst class at GS in houston is very small in comparison to Lehman/CS (which would also explain the small representation of GS analysts in energy PE). Would you agree with that?

  • 1
 
Mar 30, 2010 - 11:19am

Energy banking is known to pigeon hole, so opportunities with megafunds (I'm assuming you're talking about KKR, BX, Carlyle, etc) are not likely. Yes, GS may be the top bank overall, but not all of their groups are the best. In Houston with energy banking, Lehman (Barclays), CS, UBS are the top groups, and BAML, JPM follow.

There is a reason why GS has a small analyst class compared to these other banks: they don't have the deal flow that these top groups have. Anyone who wants to do banking in Houston and has done any research typically does not target GS as his/her first choice, unless the person has no intention of continuing with high finance, thus typically the cream of the crop does not go to GS. In fact, I know quite a few people turned down GS 2nd rounds this year for SA recruiting to accept with other energy groups.

 
Mar 30, 2010 - 1:17pm

MrGordonGrowth:
Energy banking is known to pigeon hole, so opportunities with megafunds (I'm assuming you're talking about KKR, BX, Carlyle, etc) are not likely. Yes, GS may be the top bank overall, but not all of their groups are the best. In Houston with energy banking, Lehman (Barclays), CS, UBS are the top groups, and BAML, JPM follow.

There is a reason why GS has a small analyst class compared to these other banks: they don't have the deal flow that these top groups have. Anyone who wants to do banking in Houston and has done any research typically does not target GS as his/her first choice, unless the person has no intention of continuing with high finance, thus typically the cream of the crop does not go to GS. In fact, I know quite a few people turned down GS 2nd rounds this year for SA recruiting to accept with other energy groups.

I don't mind getting pigeon holed in energy... I plan on staying on Houston my entire career and have a genuine interest in energy. I just want to know whether I'd be able to get a top PE position coming from GS in Houston. Looks like you're telling me that I would have a harder time than CS/Lehman analysts. But I assume I'd still have a good shot, correct?

 
Mar 30, 2010 - 4:09pm

i don't think you can say that u'll stay in Houston your entire career, you never know where life takes you... it's a fact of life... i've heard that you learn most of what you need to learn within the first 3 months of banking, and everything else is quite repetitive.. it'll be good to have a change of environment, either city, industry or product group, country, or even jobs...

 
Apr 14, 2010 - 8:31pm

Listen to what everyone in the board has said, in Houston GS is not as respected and does not have a top group...Barlcay's, CS, and UBS are top in Houston hence they have the best energy PE placement. They have better dealflow and everyone in the industry and in Houston knows that.

The league tables you show are for energy and power and Houston is OIL AND GAS. Goldman may destroy with power, but that is based in NYC, and some energy transactions probably run through NYC

get rid of your boner for GS and listen to what everyone on the board has said.

 
Apr 14, 2010 - 10:11pm

southernmonkey:
Listen to what everyone in the board has said, in Houston GS is not as respected and does not have a top group...Barlcay's, CS, and UBS are top in Houston hence they have the best energy PE placement. They have better dealflow and everyone in the industry and in Houston knows that.

The league tables you show are for energy and power and Houston is OIL AND GAS. Goldman may destroy with power, but that is based in NYC, and some energy transactions probably run through NYC

get rid of your boner for GS and listen to what everyone on the board has said.

Good point regarding the league tables... and yes, I realize that Barclays and CS are tops in Houston.

Do you happen to know of any other energy PE shops in Houston? (other than the ones already listed above)

 
Apr 16, 2010 - 9:10pm

randymoss:
Where would Simmons be on a list of top energy groups? Right below Barclays, CS and UBS?

Simmons is legit. They are probably as respected as CS and Barclays. Just check out the Associate profiles at PE firms like First Reserve and Limerock... alot of former Simmons analysts.

 
Oct 20, 2010 - 2:51am

holycowbanana:
Continuing on this topic, are there any energy private equity groups in SF or LA?

Texas Pacific Group is based out of SF. I think (not 100% positive) that their energy group is there as well. They may be less O&G and more 'alternative' energy. However I do see them pop up in Platts reports occasionally, so they must get their hands dirty somewhere. For some reason I want to say they bought a refinery recently.

Also, I'm pretty sure that Kayne's PE Energy team is based out of Houston. (but hq is LA)

 
Oct 20, 2010 - 9:38am

FunkMonkey:
holycowbanana:
Continuing on this topic, are there any energy private equity groups in SF or LA?

Texas Pacific Group is based out of SF. I think (not 100% positive) that their energy group is there as well. They may be less O&G and more 'alternative' energy. However I do see them pop up in Platts reports occasionally, so they must get their hands dirty somewhere. For some reason I want to say they bought a refinery recently.

Also, I'm pretty sure that Kayne's PE Energy team is based out of Houston. (but hq is LA)

Kaynes is out of Houston

 
Jan 26, 2011 - 2:32pm

If you're headed to a top 5 school, you should be targeting Houston shops like First Reserve, Limerock, Tudor Pickering and Holt. Those are some of the top Houston O&G PE players (especially First Reserve)

‎"Until and unless you discover that money is the root of all good, you ask for your own destruction. When money ceases to become the means by which men deal with one another, then men become the tools of other men. Blood, whips and guns or dollars."
 
Jan 26, 2011 - 2:33pm

@ProdigyOfZen Actually I do know some of the usual suspects you (and some of the other posts) mentioned. I guess I was trying to get an idea of which ones I might have a realistic chance of getting into considering I have no prior PE, IB, M&A or finance experience. I assumed I would have to start with one of the boutiques. So also looking for advice as well as names.

 
Jan 26, 2011 - 2:34pm

Grisham, I think you could have got a job with an energy PE firm in Houston without going to a top 5 MBA program. I am almost 100% certain you will get a job with one of them when you graduate from a top 5 mba school.

The one who does not fall, does not stand up
 
Jan 26, 2011 - 2:37pm

ProdigyOfZen:
Grisham, I think you could have got a job with an energy PE firm in Houston without going to a top 5 MBA program. I am almost 100% certain you will get a job with one of them when you graduate from a top 5 mba school.

How exactly does one secure a position at a PE firm without an MBA branding? From my experience the couple of people I have seen make a move from energy companies to Energy PE firms have mostly been top executives, no engineers.

 
Jan 26, 2011 - 2:39pm

I think it would be difficult to land a PE job without prior PE experience, and then without that, without prior IB experience. The majority of people I know in PE (at least in their 20s) were in IB before. That said it should not discourage you from seeking the right people and trying to leverage your network.

 
Jan 26, 2011 - 2:41pm

Houston Energy Private Equity (Originally Posted: 04/24/2013)

Just looking for the names of some smaller energy focused firms in Houston. Any thoughts would be appreciated, thanks a lot.

 
Jan 26, 2011 - 2:47pm

Pine Brook, Yorktown, White Deer Energy, TPH Partners, Arclight (big fund), EIG, ACON

Ace all your PE interview questions with the WSO Private Equity Prep Pack: http://www.wallstreetoasis.com/guide/private-equity-interview-prep-questions
 
Jan 26, 2011 - 2:48pm

Kayne Anderson, KKR, Apollo, Carlyle, GSO (Blackstone mezz w/ energy focus), Cadent, CCMP in The Woodlands. CCMP and the megafund offices here are satellite, but the megafund offices are still somewhat significant. Cannot really speak to the nature of the work being done in them, though, whether it is coverage or actual execution/investment mgmt.

 
Jan 26, 2011 - 2:50pm

Questions about recruiting for energy PE as a 1st/2nd year analyst in Houston (Originally Posted: 03/16/2014)

Hey guys,

I wanted to get some insight on the differences in energy PE recruiting for 1st year analysts vs. 2nd year analysts (assuming 2nd year analysts did not recruit during their 1st year) in Houston. I've searched around and talked with older friends and I've noticed a few things:

1) More IB analysts tend to stick around for their 3rd year in Houston compared to NYC/SF
2) I've heard mixed reviews about whether recruiting as a 2nd year actually helps with placement
3) Some people discourage staying a 3rd year because you may look like damaged goods, headhunters can see your ranking in your group (based on your bonus), etc.

Assuming that I already know I want to try recruiting for PE, is there an advantage to recruit as a 2nd year or is it better to recruit as a 1st year? If anyone who has experience with this situation in Houston could chime in, I'd really appreciate it. Thanks in advance!

 
Jan 26, 2011 - 2:52pm

It's never to early to reach out to head hunters. The sooner you get on their radar, the better.

I'm talking about liquid. Rich enough to have your own jet. Rich enough not to waste time. Fifty, a hundred million dollars, buddy. A player. Or nothing.

See my Blog & AMA

 
Best Response
Jan 26, 2011 - 2:53pm

I myself worked in Houston IB scene for a BB-bank and then joined a megafund PE shop focused on energy (also in Houston). A few general comments:

- I would say that if you feel like you've gotten some good deals under your belt during the first few months (ie some good M&A transactions or maybe complex lev fin transactions) then you should definitely be pushing the pedal to the medal in terms of recruiting. If you got off to a slow start in terms of deal flow, then you should pause and think some more. The problem is if you jump into the fray without good experience and you end up getting rejected, you will essentially lose your one and only one shot at recruiting for some of these funds.

- Houston tends to have some "immediate start" type of opportunities that flare up out of nowhere. This is how I ended up getting my offer. I was approaching the tail end of my 2nd year and ended up getting an offer to join immediately. It worked out very well from a timing perspective. During my recruiting, I did have to somewhat battle the "damaged goods" perception – ie why I did not already have a PE offer locked up. My method – I stated that I simply "planned" on doing the full 3 year analyst program from the start so that I could make the most of my time in ibanking. So essentially I was saying that I did not voluntarily participate in the first couple of recruiting waves.

 
Jan 26, 2011 - 2:54pm

Model_Monkey:

my recruiting, I did have to somewhat battle the "damaged goods" perception – ie why I did not already have a PE offer locked up. My method – I stated that I simply "planned" on doing the full 3 year analyst program from the start so that I could make the most of my time in ibanking. So essentially I was saying that I did not voluntarily participate in the first couple of recruiting waves.

I think this is a very helpful tip for anyone going through the process. I think this may actually work, even if you are "damaged".

I'm talking about liquid. Rich enough to have your own jet. Rich enough not to waste time. Fifty, a hundred million dollars, buddy. A player. Or nothing.

See my Blog & AMA

 
Jan 26, 2011 - 2:55pm

Understanding the Houston landscape (Originally Posted: 04/18/2014)

Hi Folks,

I am looking to chat with some PE/IBD guys in the energy space in Houston. By way of background, I've done a few years of power/infrastructure/cleantech IBD and PE, and will be starting at Wharton in the fall. I'm potentially looking to root down in TX long-term for a variety of reasons (career options, quality of life) but don't know a soul down there. Wondering if people can answer a few questions for me at the get go:

  • How does the finance culture in Houston compare to East Coast/NY (personality, work/life, compensation)
  • Is it feasible for post-MBA associate level folks to live in the suburbs and commute, or is it all downtown
  • What % of finance activity in Houston is focused on energy (I'm guessing its 90%+)

I hate to sound dull, but I know I want to stay in energy finance and NYC is such a damn grind outside of work. Houston seems like a great option but admittedly I'm still naive.

 
Jan 26, 2011 - 2:56pm

I'll get killed for this...but I have had several clients in Houston and it is an absolute shit hole of a town. Even if you are really, really wealthy it is pretty miserable.

"Everybody needs money. That's why they call it money." - Mickey Bergman - Heist (2001)
 
Jan 26, 2011 - 2:58pm

AcctNerd:

I'll get killed for this...but I have had several clients in Houston and it is an absolute shit hole of a town. Even if you are really, really wealthy it is pretty miserable.


I tend to agree with this sentiment - it's literally just highways and stripmalls everywhere. Other than a few select areas, it's basically a shit hole
Array
 
Jan 26, 2011 - 3:04pm

I resent that. Houston is probably one of the best places to live. very good place to raise a family. And housing is super cheap. you can damn near get a baby mansion for less than half a mill

 
Jan 26, 2011 - 2:57pm

Traffic is horrible in Houston - I wouldn't recommend commuting from outside Houston, although it is possible - I know people who commute from Katy. I'm originally from the Northeast and I've been living in Houston for the past year. I'm not the biggest fan of Houston, or even Texas for that matter, most ppl I've met in Houston from the Northeast tend to agree - the weather/traffic sucks and there's not much to do at all compared to the Northeast lol

Array
 
Jan 26, 2011 - 2:59pm

1) Houston banks seem more laid back than NY banks (don't have extensive experience in NY but that's the vibe I get) and work/life balance is generally a bit better. There are definitely some banks where this is not the case though.

2) It's feasible, but would become a pain. Almost every major bank is downtown. You can get a suburb type feel without leaving the Houston city limits though. The city is pretty much a big suburb - doesn't have the NY or Chicago type city feel.

3) Major banks are pretty much exclusively focused on energy. You might be able to find a couple PE shops that aren't solely energy focused.

 
Jan 26, 2011 - 3:00pm

MMBanker14:

1) Houston banks seem more laid back than NY banks (don't have extensive experience in NY but that's the vibe I get) and work/life balance is generally a bit better. There are definitely some banks where this is not the case though.

2) It's feasible, but would become a pain. Almost every major bank is downtown. You can get a suburb type feel without leaving the Houston city limits though. The city is pretty much a big suburb - doesn't have the NY or Chicago type city feel.

3) Major banks are pretty much exclusively focused on energy. You might be able to find a couple PE shops that aren't solely energy focused.


Pretty accurate but I'll build on the first two points a bit.

1) Houston is indeed more laid back. From my experience and the experience of people close to me it seems as if most groups in Houston have 0 facetime. So, while you still work a ton of hours , it is because you have work to do.

2) The "beauty" of Houston is that they have no zoning laws which means you'll find pockets of suburbia pretty close to one of the two downtowns (real downtown and the Galleria area).

 
Jan 26, 2011 - 3:02pm

I spent some time doing IB / PE in the energy space in Houston for several years and grew up in Houston (also starting at Wharton in the fall, PM me if you want to chat more). The appeal of Houston is its PRACTICALITY. It is not a city with pretty architecture or awesome nature scenes. The weather is hot and sunny (better than cold and wet though if you ask me) and generally uncomfortable to be outside in the afternoons from March through early October. But in return for bearing this out, you get affordable real estate costs and overall low cost of living while still having lots of upward mobility in terms of your career. In Houston, you can actually build your net worth from year 1 of your career. For example, you can actually buy a decent house that's pretty close to the center of town in the early stage of your career. Houston is also a very diverse city – there are tons of different cuisines at various price ranges and lots of different interesting people. The city exhibits this characteristic via an array of different festivals (Greek festival, Argentinian festival, a big LGBT pride parade, to name a few) celebrating different cultures. It's a good city to be a young professional in, but you are probably going to find a slightly less high-quality / less driven crowd than you would find in San Fran or NYC. But that also depends – I'd say the top 20% of Houston professionals are not any different than the top 20% of NYC.

If you don't believe me, here are some additional publications on Houston's growing awesomeness.

1.) http://www.businessinsider.com/why-houston-is-the-best-city-in-america-2013-5?op=1
2.) http://www.bizjournals.com/houston/morning_call/2013/08/houston-tops-cnn-moneys-best-places.html
3.) http://www.forbes.com/sites/morganbrennan/2012/07/26/houston-tops-our-list-of-americas-coolest-cities-to-live/

Houston's traffic problems are overblown as well. I used to also fuss about Houston's traffic issues, but then I moved to another major international city where I really understood just what "bad traffic" really means. Yes, if you want to join the rush hour crowd and go home from 5pm – 6:45pm, then you will experience some bad traffic. But if you just stay a little bit longer at work, and leave at 7pm, you are generally in the clear.

As far as the work life balance, I assume Houston is slightly better than NYC but when I was in the IB grindhouse, I still worked 80+ hr weeks most of the time. I think it just depends on your firm's culture.

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