The current volatile commodity market environment makes natural resources an exciting investment prospect and Preqin’s natural resources fundraising statistics from the past year certainly paint an interesting picture.
Preqin’s database shows that eight natural resource funds reached a final close in YTD 2011. Five of these are predominately focused on North America, and three on Asia and the Rest of the World, raising an aggregate USD 5.5 billion and USD 0.4 billion respectively.
The largest of these funds to have reached a final close is the Encap Energy Capital Fund VIII, which targeted USD 2.5 billion and actually reached its hard cap target of USD 3.5 billion. The fund, the eighth in a series of energy focused funds by EnCap Investments, will invest in start up companies in the oil and gas exploration sector of North America.
There were no such funds focused on Europe that reached a final close this year. However, Preqin’s Funds in Market product reveals that one natural resource fund targeting investments predominantly in Europe is currently raising. There are 12 focused mainly on North America and 15 on Asia and Rest of World. Although there are slightly more Asia and Rest of World-focused funds, the data shows that generally, the target sizes of North America-focused funds are much higher than those focused on any other geographic region. In fact, the difference is stark: the North America-focused funds’ total target size is about USD 21 billion, compared to Asia and Rest of World funds’ USD 9 billion.
The largest natural resources fund is being raised by Riverstone Holdings, which is presently targeting USD 6 billion for their latest natural resource fund. The Riverstone Global Energy and Power Fund V’s focal industry is energy and utilities, and it will look to invest worldwide in oil, gas and power opportunities. Preqin’s data shows 39% of those natural resources funds that are still in the fundraising process have had at least one interim close, and aggregate commitments for these have reached USD 2.7 billion.