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Preqin Industry News

Private equity fundraising for natural resources-focused funds has reached an all-time high as at the end of August 2015. With a record $32bn raised in 2015 YTD for investments in the sector, Bradley McEwan and Matthew Morris present the latest news stories relating to natural resources deals and fundraising.

As the Chart of the Month illustrates, natural resources fundraising for 2015 YTD stands at an all-time high. Natural resources private Chart of the Month equity vehicles closed this year have secured capital commitments totalling a combined $32bn, already surpassing the capital raised Annual Natural Resources Fundraising, 2005 - 2015 YTD in the previous peak year of 2013. Notably, only 16 funds are (As at 26 August 2015) responsible for the capital raised so far this year, leading to an 50 35

average fund size of $2.2bn – another record high. Fundraising 32 Aggregate Capital Raised ($bn) 45 30 growth has been driven by the notable drop in commodity prices, 30 particularly oil, over the past year, creating potentially attractive 40 24 25 investment opportunities in what may prove to be undervalued 35 24 25 companies and assets in this market. 30 19 20 25 The record fundraising level so far in 2015 may yet increase further, 43 15 20 13

with more than three months until the year end and Preqin data No. of Funds 9 9 31 15 8 10 revealing that there are currently 61 natural resources-focused 26 25 26 10 19 funds in market, collectively targeting $32bn in capital. 5 16 24 16 13 5 5 12 0 0 Natural Resources Funds 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 YTD Year of Final Close The largest natural resources fund to close this year is EnCap No. of Funds Aggregate Capital Raised ($bn) Energy Capital Fund X. Managed by EnCap Investments, the fund Source: Preqin Funds in Market closed on $6.5bn in April 2015, 30% above its target. The fund invests in upstream companies, or those focusing on oil & gas exploration and production based in the US. as a placement agent, with investors including Teacher Retirement System of Texas, Texas County & District Retirement System and At the end of August 2015, Edge Natural Resources closed their Orange County Employees’ Retirement System. debut private equity fund on its hard cap, collecting $446mn and surpassing the initial target size of $300mn. Based in Dallas and Natural Resources Deals led by a group of former executives of Natural Gas Partners, ENR Partners will seek to invest in small cap North American oil & gas opportunities. In July 2015, Beijing Tairui Innovation Capital Management completed a PIPE transaction in Canada-based Western Potash Having started to fundraise in Q2 2014, TIAA-CREF Global Corp, totalling CAD 80mn. The company is a development stage Agriculture II held a fi nal close on its hard cap at the end of July potash fi rm, engaging in evaluation, exploration and development 2015, securing $3bn for its second natural resources-focused of potash mineral properties. vehicle. Following the same strategy as the previous fund, it will invest in grain-exporting countries and employs a top-down strategy Black Swan, a portfolio company of Canada Pension Plan primarily focused on achieving diversifi cation by geography and Investment Board (CPPIB), KERN Partners and Warburg Pincus, crop type. Focused primarily on the US, the fund also targets acquired Carmel Bay Exploration for CAD 200mn in cash in July investments in Australia, Brazil, Chile and New Zealand. Investors 2015. Carmel is a Calgary-based upstream company focused in the fund include British Columbia Investment Management on acquiring and developing assets in the Western Canadian Corporation, AP-Fonden 2 and New Mexico State Investment Sedimentary Basin. Council.

July 2015 also witnessed the ﬁ nal close of Ridgewood Energy Oil & Gas Fund III on $1.9bn, far above its initial target size of $1.5bn. The New Jersey-based ﬁ rm focuses on oil & gas investments in the deep-water Gulf of Mexico. The fund employed Eaton Partners

Do you have any news you would like to share with the readers of Spotlight? Perhaps you’re about to launch a new fund, have implemented a new investment strategy, or are considering investments beyond your usual geographic focus?

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