Early-stage middle-market investments in private North American oil and gas companies
Energy Private Equity
Cohesive team with an engineering-centric approach to capital investment and value creation; team leadership has worked together for over 15 years.
Highlights
Investing in energy private equity since 1992.
$5.7 billion invested in 112 investments across Kayne Anderson Energy Funds I-VII.
Investment size of $50 to $200 million with an active, often majority controlling role and a typical holding period of 3 to 5 years.
Conservative focus on risk management and capital preservation with moderate levels of leverage via senior credit facilities and prudent hedging.
Avoid overpaying for drilling locations or acreage with a moderate initial pace of drilling until a project is proven.
Domestic natural gas production is at its highest level in history, oil production is at a 28-year high and estimates of domestic economic recoverable reserves have doubled in the past decade.
Advances in technology, primarily horizontal drilling and modern fracking techniques, have reversed decades-long trends and dramatically increased the industry’s ability to generate an economic return.
Strategy
Ability to quickly and effectively apply new technology and identify upside potential across basins is Kayne Anderson Energy Funds’ main competitive advantage.
Early-stage middle-market investments in private North American oil and gas companies.
Engineering centric approach to capital allocation, value creation.
Growth equity model with 15 to 20 companies per fund.
High concentration of successful repeat management teams.
Value-added partner to management through knowledge integration and technology transfer.
Focus on growing businesses in niches with origination and knowledge advantage and superior sourcing of investment professionals and teams.
Strategic effort to lease acreage targeting reservoirs in proven basins and acquire underexploited properties from companies who are selling to fund resource play development.
Latest Investments
Our engineering-centric and disciplined underwriting approach facilitates Kayne Anderson Energy Funds’ (KAEF) ability to identify the best combination of management and assets.
Our Funds
Energy Fund I
$112,500,000
Realized
August 1998
Energy Fund II
$240,000,000
Realized
December 2002
Energy Fund III
$550,000,000
Realized
November 2004
Energy Fund IV
$950,000,000
Realized
November 2006
Energy Fund V
$820,000,000
Fully Invested
103% Distributed
May 2009
Energy Fund VI
$1,600,000,000
88% Invested
100% Distributed
December 2012
Energy Fund VII
$2,051,450,000
83% Invested
40% Distributed
September 2016
Currently fundraising Energy Fund VIII
*As of November 2018. % distributed represents total distributions/total contributed capital. The target IRR set forth herein is provided as an indicator as to how KAEF VIII will be managed and is not intended to be viewed as an indicator of likely performance returns to investors. The target return is based on estimates and assumptions that potential investments will yield a return equal to or greater than the General Partner’s return targets, however, there can be no assurance that KAEF VIII’s return objectives will be realized or that the General Partner will be successful in finding investment opportunities that meet these anticipated return parameters. (1) One remaining investment.
Kayne Anderson Energy Funds (KAEF) ESG Policy
Kayne Anderson has responsible investment standards for Environmental and Workplace Safety, Social Responsibility and Governance (ESG). Standards established and oversight provided by Kayne Anderson Capital Advisor’s Chief Compliance Officer, Director of ESG Compliance, and Kayne Anderson Energy Funds investment professionals with assistance from leading subject experts.
ESG Principles and Standards
KAEF Involvement
- Consider ESG implications in all investment decisions and provide guidance to portfolio companies from initial acquisition throughout the life of the investment.
- Organize and host a central, annual summit of senior portfolio companies executives to discuss specific ESG related topics and best practices.
- Establish a team of third party experts to institute standards, best practices and assist portfolio.
Portfolio Company Involvement
- Management teams are required to establish business-relevant ESG metrics and measure and periodically report performance to boards of managers.
- Comprehensive annual review and sign-off required by senior executives of each portfolio company as to compliance with established KAEF ESG standards.
- Utilize third party subject experts, as appropriate.
- Senior executives attend an annual KAEF summit to discuss ESG related topics and best practices.
Community Involvement and Social Responsibility
Kayne Anderson Capital Advisors Foundation
- Founded in 2011 and has provided approximately 2.500 grants totalling more than $7.2 million.
- Embodies the charitable spirit inherent in the Kayne Anderson corporate culture.
- Encourages employees to increase individual giving and participation in charitable activities.
KAEF Houston Involvement
- Since 2014, KAEF Houston team has donated over $750.000 as well as a significant time in support of local charitable organizations.
- Contributions are matched dollar for dollar by Kayne Anderson Capital Advisors Foundation.