Carlyle Group, the world’s largest private equity firm, is raising up to $1 billion for a new fund to invest in oil and gas outside the United States as a stronger outlook for oil prices rekindles investor appetite, banking sources said.
The new vehicle comes after Carlyle International Energy Partners (CIEP), the group’s overseas energy investment fund set up in 2013, nearly exhausted its $2.5 billion warchest following a number of high-profile deals.
CIEP managing directors Bob Maguire and Marcel van Poecke met investors during a roadshow in the United States in recent weeks to raise interest in the new fund, several banking sources told Reuters.
The new fund will be used to create a New York-listed special-purpose acquisition company, or SPAC, that focuses on investment in oil and gas exploration and production outside the United States.
The fund will be called Regalwood Global Energy Ltd, according to a filing to the U.S. Securities and Exchange Commission from Oct. 2.
It is expected to be launched next year, the sources said.
A Carlyle spokeswoman declined to comment.
According to the filing, the initial public offering will seek to raise $345 million while CIEP will put an additional $250 million into the fund in a private placement.
The final size of the fund could be increased to up to $1 billion, depending on investor interest, the sources said.
CIEP has been one of the most active private equity funds in recent years amid a downturn in the energy sector, backing companies in Europe, Africa and Asia.
Those include Neptune, a joint venture with CVC Partners that in May acquired Engie’s international exploration and production portfolio for $3.9 billion; and Assala Energy, which in March acquired Royal Dutch Shell’s Gabon operations for $587 million.
A recovery in oil prices – up around 40 percent since June – has bolstered confidence in the energy industry.
“There is definitely an upswing in appetite for oil and gas acquisitions as evidenced by our recent capital confidence barometer survey,” Andy Brogan, global oil and gas transaction leader at consultancy EY, told Reuters.
“Much of this is down to the (oil) pricing outlook and the confidence that comes with it.”
According to the EY survey published on Wednesday, 69 percent of oil and gas executives indicated they intend to pursue acquisitions, a record high for the poll.