Raising Capital When Private Equity Has Seen Better Days

According to some, oil and gas private equity has already seen its best days.

Dry powder totaled $24 billion in 2022, down from its peak of $88 billion in 2015, according to a report by Buyouts. The same report noted that private equity fundraising hit its peak in 2017 with $73 billion raised by scores of funds. In 2022, just $20 billion in new funds were raised.

But oil and gas private equity firms are still active in the market.

NGP’s Chris Carter told potential investors in the PE firm’s Fund XIII NGP that the energy sector is facing “dramatic capital scarcity,” according to documents from the Boston Retirement System. Yet that scarcity is helping to create “one of the most favorable energy investment environments in decades.” NGP has raised $2.5 billion for its fund XIII, according to reports.

In July, Quantum Energy Capital secured nearly $3.5 billion for its Fund VIII, according to a regulatory filing.

In April, EnCap Investments disclosed that it had secured $2 billion for its Fund XII, according to a securities filing.

Kayne Anderson, too, has been seeking $1.5 billion for its Private Energy Income Fund III to invest in four to six “sizeable, cash flowing private upstream energy companies,” according to the same documents.

A new entrant to the upstream space includes The Tomorrow Fund, which has raised $1 billion, according to reports by New Private Markets.

With the many exits private equity has seen in recent years, more fundraising is bound to occur.

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