NEW YORK CITY—Fundraising is concluded and now investment begins for Blackstone's second energy-focused private equity fund. Demand for Blackstone Energy Partners II from both existing and new investors exceeded its hard cap of $4.5 billion.
In common with Blackstone Energy Partners I, BEP II will invest globally in control-oriented equity and equity-linked interests in companies, assets and development projects in the energy and natural resources sector. BEP I closed in September 2012 at slightly more than half the new fund's size with $2.4 billion of commitments; Blackstone has deployed more than $8 billion in its energy strategy.
Investors in the new fund run the gamut of state pension funds, corporate pension funds, sovereign wealth funds, insurance companies, endowments, foundations and family offices. David Foley, senior managing director and CEO of Blackstone Energy Partners, expresses appreciation for “the confidence that our investors have placed in us. Looking forward, we believe that our experienced team, deep network of relationships with talented industry executives, patient capital and proven strategy positions us uniquely well to take full advantage of the significant recent cyclical downturn in oil and gas prices.”
Judging by some of its recent investments, alternative energy development is one facet of BEP's strategy. This past November saw the inauguration of Meerwind Sd|Ost, a 288-megawatt offshore wind farm serving Germany. An offshore wind joint-venture between BEP and Berlin-based Windland Energieerzeugungs GmbH was responsible for the development, construction and operation of the $1.47-billion Meerwind Sd|Ost project, among the largest such projects in North Sea history.
In October, Blackstone forged a partnership with a management team led by Matthew Rosenblum, the founder and CEO at Solops LLC, to create Onyx Renewable Partners. As a new affiliate of Blackstone portfolio company Fisterra Energy, Onyx will be owned by funds managed by Blackstone on behalf of its private equity investors.
Earlier that same month, Houston-based Windy Cove Energy LLC and BEP announced the formation of Windy Cove and a concurrent commitment to invest up to $700 million in equity to acquire and develop CO2 enhanced oil recovery assets domestically. EOR technology is deployed to recover oil reserves from mature fields. “More than 20 billion barrels of oil are estimated to be recoverable from CO2 flooding in the US,” Chuck Fox, Windy Cove's president and CEO, said last October.
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
