It’s hardly a geographic leap, considering TPG is based in Fort Worth. But it’s indicative of the firm’s heightened interest in energy and power, among the most popular sectors for PE firms of late.
From Oct. 1, 2009 through Sept. 30, 2011, TPG closed at least three platform acquisitions—which were the three largest deals in that time frame closed by U.S.-based sponsors, in terms of disclosed deal value—in the energy and power sector, with a total disclosed deal value of $4.5 billion, according to Thomson Reuters data Buyouts compiled for a feature on investing in the sector, to be published Oct. 31. These include its $2.5 billion takeover of troubled Australian energy company Alinta Energy and the $1 billion buy, alongside ACON Investments, of a refinery, a pipeline and 235 gas stations from Marathon Oil Corp.
Several of TPG Capital’s competitors are also ramping up their activity in the sector. The Blackstone Group is reportedly seeking $3 billion for its first energy fund , while KKR has raised more than $1 billion for its fund.
Not surprisingly, energy funds are among the most popular right now for pension funds and other fund investors. As my colleague Greg Roth previously reported, through the third quarter, limited partners committed close to $8 billion to energy funds this year, roughly $2 billion more than turnaround funds, which were the second-most popular fund strategy.
Sponsors activity in the sector has picked up following a drop in activity with the economic downturn. U.S.-based sponsors had closed 39 control-stake deals with a disclosed deal value of $5 billion in 2011 as of Sept. 30, putting them on pace to outdo last year’s results, when firms closed 44 deals with a disclosed deal value of $2.8 billion.
Bernard Vaughan is a Senior Editor at Buyouts Magazine. Follow his tweets @BVaughanReuters.