U.S. Markets

Warburg Pincus raises $4 billion private equity fund for energy

NEW YORK (Reuters) - Warburg Pincus LLC said on Monday it had raised $4 billion for its first energy-focused private equity fund, exceeding its $3 billion target and making it the latest investment firm looking to tap into opportunities in North America’s shale gas boom.

Warburg Pincus joins peers such as Blackstone Group LP BX.N and Apollo Global Management LLC APO.N that already have dedicated investment funds for energy deals alongside their flagship, multi-sector private equity funds.

At a time when prices for leveraged buyouts of companies remain expensive, energy deals have allowed private equity firms to put a lot of money to work at lower valuations by providing capital to seasoned management teams to acquire and develop assets. With energy prices currently suppressed amid a glut of supply, more opportunities to acquire such assets cheaply are expected.

Warburg Pincus said the new fund would focus primarily on energy exploration and production investing in North America and around the world, including Africa, Asia, Europe and Latin America. It will also pursue opportunities in the midstream, oilfield services, mining and power sectors, the New York-based firm added.

Warburg Pincus was previously investing in those sectors through its global private equity funds, including its latest $11.2 billion fund it raised last year. Its investments include oil and gas explorers and producers Antero Resources Corp AR.N and Kosmos Energy Ltd KOS.N.

Warburg Pincus said it had already invested and committed more than $9.5 billion in over 50 energy-related companies around the world since it was established in 1966.

The firm said investors in the energy fund were primarily existing investors in its other funds. They include public and private pension funds, sovereign wealth funds, insurance companies, endowments, foundations and wealthy individuals.

Reporting by Greg Roumeliotis in New York; Editing by Meredith Mazzilli