Top energy PE funds

Anyone know what the current energy PE ranking is? I know NGP, First Reserve, and Riverstone are the largest along with MFs, but not sure if things have changed. Also, which banks place the best into top energy PE?

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  • Analyst 1 in IB - Cov
Nov 22, 2021 - 1:07pm

Yea, their exits are insane and its crazy that they are relatively unknown outside of O&G. Exit opps at JEFF will be similar to Intrepid but IFP may have the edge overall in terms of exiting because both shops will give you looks at any traditional energy PE fund, while IFP's strength in midstream gives good opportunities for infra recruiting.

As an aside, and someone at neither shop, most people I know would prefer IFP at the junior level because of better culture, similar top of the street pay, and equal to better exit opps.

  • Prospect in IB-M&A
Nov 22, 2021 - 1:16pm

Not OP but isnt jeff pretty active in midstream too with their group head Bowden's relationships? And their restructuring of the power uts group falling under the global energy team now? So not sure how big of a difference there is interms of midstream presence between the 2 banks

Can understand the preference to IFP from a culture standpoint

  • Incoming Analyst in IB-M&A
Nov 23, 2021 - 1:54am

Prospect in IB-M&A

Not OP but isnt jeff pretty active in midstream too with their group head Bowden's relationships? And their restructuring of the power uts group falling under the global energy team now? So not sure how big of a difference there is interms of midstream presence between the 2 banks

Can understand the preference to IFP from a culture standpoint

Agree with your points. JefCo has a pretty good to excellent midstream team - was on like 2 multi-billion dollar (roughly 14 bil total) deals just last month or something. Plus the integration of the PUI team has led to more infra/esg stuff for the Houston team. Also, the pay at Jefferies is at the top of the street.

The only reason one should choose Intrepid over Jefferies is if they vibe more with that culture. Intrepid's more fratty whereas I would say Jefferies is a bit more on the nerdier side.

  • Prospect in IB-M&A
Nov 23, 2021 - 2:11am

What would u say is rough all-in pay at JefCo Houston for Analysts? Heard some retarded numbers thrown on this site for Analysts so just curious

  • Incoming Analyst in IB-M&A
Nov 23, 2021 - 2:22am

This year first years made close to 200k all in and second year was around 240k from what I heard. I would say this is in line with previous Jef HOU numbers (maybe a little lower) and as I said above, puts the group at the top of the street.

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  • Analyst 2 in IB-M&A
Nov 23, 2021 - 8:22pm

In my opinion, if focused on energy IB in Houston, there are two logical reasons that one would turn down Jefferies

1) you know that you will struggle with the culture/workload (although any other top group will likely only be marginally better)

2) you want a brand name that can help you recruit for jobs outside of energy (Evercore comes to mind)

TPH (arguably) has a better culture than Jefferies if you are interested in staying in energy long-term. Don't really think anyone that is well informed is choosing Intrepid over Jefferies unless you have personal connections and/or vibe well with the culture there like the previous poster alluded to. Jefferies has also been making a foray into the energy transition space, which should broaden the experience for an analyst who can manage the office politics well enough to get *some* exposure.  The top analysts from GS/MS/JPM/Citi/CS should also have an easier time recruiting for roles outside of energy than some of the other large groups in Houston.

To answer the OP's other question regarding energy PE funds themselves -

First Reserve and Riverstone were strong brand names (historically) but are not places that you want to be targeting as an aspiring PE Associate if you can help it. There are still some very smart people at those shops but they are likely in some way entrenched due to their individual situations (especially if VP and up) and would most likely tell you the exact same thing if they were to give impartial advice. The returns just haven't been there over the last decade... 

NGP is in a bit of a state of flux right now. They are pushing their energy transition mandate pretty heavily but still have some sizable oil and gas investments/platforms that will likely be around for the foreseeable future. They can still raise money for traditional energy, but as an outsider, it remains to be seen where they end up going with things in the mid-to-long term.  I view EnCap in a similar light to NGP.  They will definitely still find ways to raise money for traditional O&G (and have actually really had to lean in to try to deploy the dry powder from their most recent fundraise) but are also heavily focused on diversifying into renewables.  Both funds should provide a solid Associate experience but your long-term prospects (and upward mobility) at both funds will be predicated on if they are successful in implementing their ET strategies or the wholesale return of traditional energy investing (remains to be seen if this will happen).  If the latter happens, my sense is that both of these Texas-based funds will likely be more inclined to leg back in before the NYC-based MF groups do.

Quantum has probably done the best in traditional energy investing over the last 5 or so years. They still have dry powder and can definitely raise more. They've also done a solid job of supplementing their traditional platform with investments in "energy tech" and energy transition. Working there should also provide a solid learning experience but will be far sweatier than First Reserve, Riverstone, or NGP/EnCap.  

Apollo and Blackstone are pretty much gung-ho on shifting the focus of their current "traditional" energy PE groups to investing primarily in energy transition.  Warburg has publicly said more of the same, however, they do have a few legacy platform deals in O&G that will likely require more management and selective supplemental investment over the near-to-medium term.  Pretty sure KKR is headed in the same direction. They just finished the arduous, years-long process of effectively rolling up the lion's share of their E&P portfolio through the Contango/Independence transaction.  Carlyle and Bain Cap have hardly played in the space as of the last couple of years, and if they have, it has been through joint ventures or with an infra or special situations twist.

Nov 21, 2021 - 3:26pm

They're respectable. They don't dominate the league tables / have the same reputation in Houston as they do in NYC, but still a very respectable shop.

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  • Analyst 1 in IB - Cov
Nov 21, 2021 - 8:16pm

They've crushed it since the start of COVID and exit opps are solid but culture is very bad. 

  • Associate 1 in PE - LBOs
Nov 21, 2021 - 12:46pm

By "Energy", do you mean O&G focused funds, are you open to broader energy infrastructure (energy, gas generation, transmission, renewables, etc).

Most energy funds are diversifying heavily. Happy to give some examples once I'm more clear on the ask.

Nov 21, 2021 - 2:10pm

In that case, you will likely be looking at a variety of power deals rather than O&G in today's market.

I'm at a large power + renewables focused PE shop, and I predominate transact on energy infra (renewables, gas, storage, transmission, etc). If you look at comparable firms, such as ECP, you can see most traditional energy investors are changing course.

If you go broader infra, which is doable with an energy banking background, you can expect to ask transact across transportation and digitalization (data centers, fiber, etc).

  • Principal in PE - Other
Nov 21, 2021 - 1:08pm

Returns have been very rough across the board so if you're looking for reliable carry, choose a different area to invest in. TBD how all these energy transition funds perform. I've also heard the theory floating around recently that traditional midstream assets are offering the best risk/return profile at the moment because there's less competition for quality assets with so much LP money going into energy transition funds instead.

  • Analyst 2 in CorpDev
Nov 23, 2021 - 8:32pm

I'm currently an analyst at a renewables developer (25-35GW developed, one of the largest in the US). Primarily focusing on construction/term debt capital raising pre COD and then equity and tax equity post COD. 

Is my background attractive to MF Infrastructure PE vs a BB power and utilities coverage guy?

  • Associate 1 in IB-M&A
Nov 23, 2021 - 8:50pm

Moving to a BB Power/Utilities/Infra group after a couple years at a developer then moving from there to Infra PE is completely doable. Obviously going to a top BB and then a MF would be difficult, but your chances are not zero assuming you have a decent undergrad background.

  • Associate 1 in IB - Restr
Nov 24, 2021 - 12:05am

First Reserve got crushed during Covid and heard they were struggling to raise their latest fund.

Nov 24, 2021 - 3:34pm

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  • Analyst 2 in IB-M&A
Nov 24, 2021 - 4:03pm

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