Oil and gas specialist NGP Energy Capital Management closed three funds, which together amassed a total of $1.7 billion (€1.45 billion) in commitments. The Irving, Texas-based group closed on $1.3 billion for Natural Gas Partners VIII, $250 million for NGP Income Co-Investment Opportunities Fund II, and $148 million for its inaugural tech fund, NGP Energy Technology Partners LP.
NGP (formerly Natural Gas Partners) exclusively targets the North American oil and gas sector. The firm’s primary investment vehicle is the $1.3 billion Natural Gas Partners VIII, a fund that is used to invest in energy businesses competing in the oil services, natural gas gathering and exploration segments of the space. The firm’s previous fund raised $600 million in 2003. The $250 million co-investment fund is a follow up to a $100 million vehicle raised in January, and was created to invest alongside the firm’s primary buyout investments.
NGP’s debut tech vehicle, meanwhile, represents the firm’s first move into energy technologies. The fund, which held a first close in September, will invest in buyouts, growth financings and PIPEs. Former Perseus managing director Philip Deutch was hired to serve in the same capacity for the new fund.
These latest vehicles from NGP come at a time when the energy space has become a favourite target of private equity. In addition to other specialists such as First Reserve, LS Power Associates and Energy Investors Funds, generalist firms including The Blackstone Group, Warburg Pincus and others, have seemingly stepped up their activity in the space.
NGP relishes its position as a specialist in the sector, and holds that it is a “critical” component to investing in energy.
Kenneth Hersh, a managing partner at the firm, said in a statement, “Energy is the most complicated, volatile and dynamic sector of the world’s economy. In this context, it is critical that an investor understand the entire interplay between the global commodity and capital markets, geopolitics, macroeconomics and the pace of technological innovation.”
In addition to NGP’s new funds, the firm is also affiliated with senior debt and mezzanine provider NGP Capital Resources Company, a business development company that trades on the Nasdaq stock exchange.