HOUSTON – A private equity shop that lured the former U.S. Treasury Department chief to the firm last year has collected $4 billion for its first energy fund to pour cash into U.S. oil explorers and other companies.
New York-based Warburg Pincus, the investment firm behind last year’s $1.6 billion Wall Street debut of Antero Resources, said Monday it overshot its goal for the energy fund by about $1 billion, after nearly a year of soliciting investors. Former Treasury Secretary Timothy Geithner became president of the firm around the same time it began talking to investors about the fund, last November.
For years, the firm has pumped billions into energy-related companies across the globe, but it hadn’t set aside an individual fund for the energy industry until now. The fund comes as private equity’s role in the U.S. oil exploration sector has reached new heights, climbing from $2 billion in 2006 investments to a stake of about $19 billion in 2012, as shale plays across the United States have piqued Wall Street’s interest, according to PricewaterhouseCoopers.
“We have honed our approach over our decades of investing in the industry, enabling us to continue to find opportunities that will generate attractive rates of return for our investors,” Warburg Pincus co-CEO Charles Kaye said in a written statement.
It said it would try to find and invest in North American exploration and production companies, as well as others in the global midstream, oil field services, mining and power sectors.
The closure follows the firm’s $500 million investments in Houston-based Navitas Midstream Partners, a pipeline firm run by former Copano Energy executives, and its $600 million investment in Houston’s Zenith Energy, a terminal operator led by one of the architects of Kinder Morgan’s U.S. energy storage business.
Warburg Pincus is also the biggest backer for Dallas-based Venari Resources, an offshore explorer that last week announced a discovery in the Gulf of Mexico alongside Chevron and BP.
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