New Carlyle Group Fund Provides Investment Capital to Energy Projects Unable to Tap Traditional Sources

Global alternative asset manager The Carlyle Group (ticker: CG) raised $2.8 billion for energy credit investments, the company announced.

Carlyle Energy Mezzanine Opportunities Fund II (CEMOF II) primarily targets investments in projects and companies in the power generation and energy sectors requiring capital of $50 million to $500 million per transaction. The fund is more than twice the size of the previous Carlyle Energy Mezzanine fund raised in 2012.

The original Energy Mezzanine Opportunities Fund invests in the energy and power sectors including power generation, renewable energy, oil and gas production, oilfield services and midstream infrastructure. David Albert, portfolio manager and co-head of the Energy Mezzanine team, said, “The second fund enables us to undertake larger transactions and fill a market need by providing investment capital to energy companies challenged to obtain capital from traditional sources.”  Albert is responsible for overseeing investments made by the fund, typically projects and companies which own oil and gas assets, related processing facilities, or power generation assets.

“We see opportunities to provide flexible capital as the industry recovers from a period of low commodity prices,” said Rahul Culas, Managing Director and Co-head of the Energy Mezzanine team. “To date we have made 15 investments across multiple energy subsectors, supported by our team of more than 20 investment professionals in New York and Houston.”

Carlyle Energy Mezzanine Opportunities Fund manages more than $4 billion. Current investments include Hilcorp Energy Development, L.P., a partnership with Hilcorp Energy Co., and Shenandoah Petroleum Corp.  Hilcorp Energy says it is the largest oil producer in Louisiana and has 1,350 employees manning operations in the Gulf Coast of Texas and Louisiana, the Northeast United States, and Alaska’s Cook Inlet and North Slope.

Carlyle has a total of $169 billion in assets under management, according to a press release.

The Carlyle Group Raises $2.8 Billion for Energy Credit Investments

5 Year Oil Price – WTI Source: Quotemedia

In an interview in March of 2015, David Rubenstein, the co-founder and co-CEO of The Carlyle Group, told CNN Money: “We’re very bullish on the energy sector. In fact, we’d say probably there is no other sector in the world that we are as bullish on as we are on energy.”

In October, 2016, The Carlyle Group  purchased specialty chemicals company Atotech from Total for $3.2 billion.

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