Cleaning up

HitecVision raised $420m in just three months for an energy fund whose remit may help prevent future offshore drilling disasters.

In a recent online editorial, we argued the Deep Water Horizon rig explosion in the Gulf of Mexico and resulting catastrophic oil leak highlight the need for both investments backing alternatives to oil as well as improvements to the infrastructure and technology servicing traditional energy businesses.

Both of course are opportunities for private equity firms. And the latter point, indeed, is part of the thesis behind HitecVision’s latest energy fund, which in June hit its $420 million hard-cap after just three months of fundraising. Different to many energy-focused strategies, this one will target operating assets in the offshore oil and gas industry, such as drilling rigs and supply vessels, and will have an emphasis on cutting-edge technology and equipment, which tend to have higher safety standards, HitecVision senior partner Arne Trondsen told PEI.

One potentially positive development from the Gulf of Mexico disaster is that “the oil companies are going to be even more concerned about what type of equipment they will be using, which fits very well into the thesis of this fund”, Trondsen said.

He said the fundraise appealed to existing and new investors, in part, because there is a lack of capital in this sub-set of the oil and gas industry, as opposed to two years ago, when there was too much. The fund's aim is to solve “complex situations”, potentially taking over some existing projects launched by incumbent players that overestimated demand and underestimated financial risks.