Haslam Family Office: ‘We Need Hydrocarbons’

Tennessee’s Haslam family is already invested in the Permian and Denver-Julesburg (D-J) basins and is interested in more energy deals, according to the office’s managing director and head of direct investments.

“When people started moving away from ‘brown energy,’ I think a lot of these wealthy families said, ‘Well I don't have DEI or ESG. I don't have these kinds of issues,’” the HF Capital director, Wellford Tabor, told IPAA’s Private Capital Conference attendees in Houston recently.

And unlike managed private equity funds, endowments or other types of capital, “I don't have a fund document where I've promised a bunch of people that are my [investors] that I won't do something.”

Looking at oil and gas as institutional money and others were leaving hydrocarbons in the past five years, he said, an increasing number of family offices have said, “If this is a capital-intensive business and there's a lack of capital, I'm going to be opportunistic.”

People who grew wealth—and now have family investment offices—are well aware of how to make money.

“And most of these people also realize we need hydrocarbons and we need energy of all types in order to make this country run,” Tabor said.

Family offices are able to see “there's opportunity here. There are good margins to be made. And if I'm comfortable with it and my family's comfortable with it, let's just go do it.”

Permian, D-J

The Haslam family office’s roughly $15 billion in capital is derived largely from the family’s sale of Pilot Travel Centers to Berkshire Hathaway, culminating with a full exit in early 2024.

Initially it sold a roughly 40% stake in 2017, followed by another 40% stake in 2023 for $11 billion combined. In 2024, it sold the remaining 20% for an undisclosed sum.

The founder, Jim Haslam II, started Pilot Co. with one station in 1958 in Gate City, Virginia, growing it to nearly 800 Pilot and Flying J locations and the largest distributor of diesel other than the U.S. Navy in North America.

About half of the Haslam family’s investments are in professional sports teams: the Cleveland Browns, Nashville Predators, Milwaukee Bucks and Columbus Crew.

“The other half of that money is invested in sort of what we would call a juiced-up endowment,” Tabor said.

“… We have a fluid style. We lead deals. We co-invest. We passively invest. We'll play anywhere in the capital structure. Our job is to help people build businesses.”

Tabor began his career in investment banking and spent 14 years in direct private equity in energy. For the past 16 years, he has worked for two family offices with diversified investments “but including a lot of energy” as both families “have an energy bias.”

With Wachovia Capital Partners, Keeneland Capital and other firms, “I've had a lot of good luck in the Permian [Basin], so we're doing some things out there.”

HF Capital is also invested in Verdad Resources. “We're fortunate to be in that deal in the D-J [Basin], which we like.”

It hasn’t invested outside the U.S. and isn’t in the deepwater Gulf of Mexico. “People can make great money doing it, but it's not what we know.”

The HF office employs about 20 staff members. “We try to stick with things that we know and with CEOs that we know.”

Emit less, ‘make money’

HF Capital has invested in lower-emission energy too, committing up to $725 million to Ara Energy Decarbonization, led by former Pilot CEO Shameek Konar, last September.

It has $600 million “where we've bought combined-cycle natural gas power plants in the Northeast,” Tabor said.

While HF Capital is invested in oil and gas, “we will play in ‘all of the above,’” Tabor said.

For example, it invested in Archaea Energy, which combined with Aria Energy, and is in the landfill-gas business in the Rice brothers’ Rice Investment Group-led deal.

The HF Capital office’s outlook is “there's a need for hydrocarbons for certainly as long as I'm going to be doing this …. We also think that there is a global desire to emit less.”

The thesis for investing in both “can be true at the same time.

“You can invest in E&P—in hydrocarbons—which we do and you also can say, ‘Over the long term, anything we can be doing to emit less is good and, if there are ways to make money doing that, that probably is smart.’”

But “we're not putting money in wind and solar to make ourselves feel good. We're saying it's a good business.”

The Northeast power plants make a great cash-on-cash yield.

“They have tremendous optionality no matter what the source of power is going to be because they're on the power lines from the interconnection.”

‘It’s just business’

HF Capital isn’t likely to be an investor in a drilling deal, though, Tabor said in response to a conference attendee’s question.

“A lot of people will. We wouldn’t,” he said.

“It doesn't fit what we're trying to do. But I think there are a lot of families, particularly families who made their money in oil and gas, who might see it differently.”

Should institutional and other investors return to oil and gas, HF Capital might divest, he added.

“As long as there's an imbalance of capital, sophisticated families will say, ‘This is an opportunity.’”

Should the balance shift back to the energy-heavier weightings of the early 2010s, “offices like us, we'll just back away from it.”

“We haven't set our career up on being an energy investment entity,” Tabor said. “We're an overall investment entity.”

HF Capital and other family offices will reinvest the profit in other capital-starved places. “It’s just business. Most of the big families we [work] with, they loved energy in the early 2020s.

“They still like it and they're going to like it as long as they can make better-than-index returns compared to their other options,” he said. “If it gets the other way, they'll just shift the other direction.”