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KKR beats target for ‘unconventional’ oil and gas fund with $2bn final close

6 Mar 2014

oil drums2_lrgUS buyout major KKR has trumped its target for a new oil and gas-focused energy vehicle by closing the fund on $2bn.

The vehicle will target “unconventional” oil and gas resources in North America according to KKR, which said it would focus on joint venture drilling investments, acquiring minerals and royalties and picking up legacy project assets.

KKR global head of energy and infrastructure marc Lipschultz said, “The energy revolution has created an unprecedented opportunity set, and we are seeing many ways to partner with companies to help develop these important resources.

“Pursuing asset-level and structured investments, we intend to deploy creative and flexible structures that seek to best meet the needs of our partners while delivering benefits associated with real asset ownership.

“We appreciate the diversity and support of new and existing KKR investors.”

KKR said the Energy Income and Growth Fund had invested $350m across eight investments to date.

The firm has invested or committed approximately $4.3bn to oil and gas investments since 2009 through its investment funds and vehicles spanning buy-outs, minority equity investments, joint-ventures, and various asset-level and structured investments, making KKR one of the more active private-market investors in the North American oil and gas space across this period.

In 2009 it made its first investment in unconventional natural gas assets through its investment in East Resources, a leading resource owner in the Marcellus Shale.

A year later KKR made its first investment in unconventional crude oil assets through its partnership with Hilcorp Energy in the Eagle Ford Shale.

The firm currently manages $8.7bn in energy and infrastructure related assets.

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