The oil and gas industry continues to be a strong industry focus for the private equity market, especially for North America-focused funds. According to Preqin’s Funds in Market service, there are currently 51 North America-focused private equity funds raising capital that are targeting the oil and gas industries, either exclusively or as a part of a wider industry focus. These private equity funds are looking to raise an aggregate of $35bn in capital commitments. Unsurprisingly, natural resources type funds make up the largest proportion of these. Twenty of the 51 North America-focused vehicles are natural resources funds, aiming to amass over $26bn in aggregate capital commitments.
The largest fund currently raising capital for investments in the oil and gas industries is the Riverstone Global Energy and Power Fund VI, managed by Riverstone Holdings. This fund is seeking $7.5bn in capital commitments and invests in oil and gas, energy and power opportunities globally, but more specifically in North America.
So far in 2014, there have been 15 North America-focused private equity funds targeting the oil and gas industries, either exclusively or as part of a wider industry focus, that have held a final close, raising an aggregate total of $8bn. The largest such fund to close so far this year is EnCap Flatrock Midstream Fund III. This infrastructure fund targets businesses and assets in the North American midstream oil and gas sector, and held a final close in April 2014 on $3bn.
These 2014 YTD fundraising statistics for North America-focused funds targeting oil and gas show that there is a long way to go to match the record-breaking figures of 2012 and 2013, which are the best years for investments into these industries. Funds raised in 2012 and 2013 accumulated $22bn and $29bn respectively. These figures were a substantial increase from 2011, when 18 funds raised an aggregate of $13bn.
The oil and gas industry remains a reliable and attractive investment for private equity funds, especially for North America-focused fund managers. The large final closes in 2014 YTD and the total capital targeted by current funds in market promises strong results similar to 2013 for North America-focused funds targeting oil and gas. The oil and gas industry offers a wide array of opportunities for investors and requires a significant amount of capital for sustained growth. With billions of private equity commitments pouring into the sector and numerous funds coming into market looking to capitalize on the abundance of opportunities, the asset class looks likely to continue to be an important channel for oil and gas investment capital.