US-based energy investor First Reserve Corporation underscored the growing importance of Asia to the energy sector in February by opening its fourth office in Hong Kong.
“Energy demand and intensity continues to increase in Asia,” William Macaulay, chairman and chief executive officer of First Reserve, said in a statement. “We believe that the fastest rates of growth from urbanisation and industrialisation are in the emerging economies, and so the resources supplying those economies and the resulting need for energy services and infrastructure in these markets are of great interest to us and our portfolio companies.”
To establish the Hong Kong office, First Reserve hired two local private equity veterans from the now defunct Hong Kong operations of Candover Partners.
Jamie Paton and Allen Gu, both of whom held senior positions at Candover, have taken on the roles of managing director and director, respectively. The duo will be joined by an existing team that will relocate to Hong Kong over the upcoming year.
Paton was hired by Candover in 2008 to establish its Hong Kong operations, but when the Europe-centric buyout firm collapsed due to funding issues during the financial crisis, its Asian operations were disbanded. Prior to his spell at Candover, Paton spent more than seven years establishing 3i's North Asian business, where he co-led the firm’s Asia programme. For First Reserve, he will be responsible for sourcing deals, conducting due diligence, execution and monitoring.
At Candover Asia, Gu was a vice president responsible for finding and executing deals in China. Gu, who characterised Asian energy markets as having reached a “critical inflexion point” in the statement, has taken on similar duties at First Reserve. He had previously held positions at Morgan Stanley Private Equity Asia and Goldman Sachs.
First Reserve is headquartered in Greenwich, Connecticut. The Hong Kong office will be its fourth, as it currently has teams on the ground in Houston, Texas and London in the UK. The firm, which in 2009 closed First Reserve Fund XII, a $9 billion vehicle that represents the largest buyout fund raised to date in the energy sector, is primarily known for its North American investments; however, it is no stranger to the Asia-Pacific region, having invested in companies in China, Singapore, India and Australia.
First Reserve’s former Asian portfolio companies include Beijing-based Asian American Coal and Asian Energy Holdings, which focus on coal and coal steam gas. The firm has also found investment opportunities in Australia, including mining services company Connect Resources Services and coal mining company Southern Cross Coal Holdings.
Earlier in the year First Reserve made a round of five promotions on its investment team, including Jeffrey Quake, who has been named a managing director in the firm’s Greenwich office.