Energy-Focused Private Equity Strategy
Energy-Focused Private Equity Strategy

Energy-Focused Private Equity Strategy

 
 
 

Note: Prior to 2015, this energy private equity strategy was executed by the investment team through the Morgan Stanley Capital Partners (MSCP) private equity funds.

Summary

The Energy-Focused Private Equity Strategy, managed by Morgan Stanley Energy Partners (MSEP), is a leading energy private equity platform that makes privately negotiated equity and equity-related investments in energy companies located primarily in North America. The MSEP team pursues a differentiated investment strategy, focused on the buyout and build-up of strategically attractive, established energy businesses across the energy value chain in partnership with world-class management teams.

 
 
Investment Approach
Strategies
  • Geographic emphasis in North America; Opportunistic globally
  • Middle market focus; Investing in energy companies having enterprise value of $50 million to $1 billion
  • Equity investments of $50 million to $250 million per opportunity
  • Consistent focus on energy buyouts underpinned by control investments
  • Capital deployment into portfolio companies over time to facilitate execution of a multistep build-up strategy to fund organic growth opportunities and/or accretive acquisitions with strategic synergies
  • Pursuit of opportunities in the core upstream, midstream, and services and equipment subsectors within the oil and gas industry, and, opportunistically, within the new energy economy
  • Partner with best-in-class executives and deploy them in the middle market, where such talent is most impactful
  • Couple Energy Partners' deep network of energy industry relationships with the resources and franchise of Morgan Stanley to source differentiated, often proprietary opportunities
  • Transaction types include corporate carve-outs, management buyouts, founder-led recapitalizations, platform build-ups of established companies, and growth equity investments
  • A commitment to continuous improvement and leadership in ESG practices, sustained over a long period of time, to underpin value creation at our portfolio companies
 
Differentiators
Sourcing
  • Consistent focus on middle market energy buyouts
  • Advantaged sourcing through Energy Partners' relationships and Morgan Stanley's deep network
Due Diligence
  • Exploit informational advantage
  • Identify and validate investment theses and key value creation drivers
  • Perform rigorous qualitative and quantitative due diligence to calibrate each investment's risk/return profile
Value Creation
  • Identify, recruit, and retain world-class executive talent and other scarce resources
  • Acquire and transform fundamentally sound corporate orphans
  • Additional alpha generation through time and labor intensive follow-on investments
  • Morgan Stanley's credibility inures to the benefit of portfolio companies
Risk Management
  • Capital deployment into portfolio companies over time mitigates risk through cycles
  • Conservative use of leverage enhances financial and operating flexibility
  • Hedge commodity price risk
  • Supported by experienced risk management specialists
Energy Focus
 
  • We focus on oil and gas, a distinct class of commodities that possesses highly differentiated, attractive long-term investment characteristics as it is both consumable and depleting.
  • We invest across the energy value chain, partnering with world-class management teams to acquire and exploit reserves, move products from the field to markets, distribute products to end consumers, and invest in the service companies that support those businesses along the way.
  • We maintain a keen interest in the New Energy economy, supporting entrepreneurs to grow established businesses that will develop the next generation of energy solutions to power the global economy.
  • Morgan Stanley has been insisting on "first-class business in a first-class way" since inception. Accordingly, we believe embedding best-in-class ESG considerations and practices in both our energy investment strategy and portfolio companies is value accretive and, fundamentally, good business practice.
Investments

Current portfolio of investments made since 2016

CURRENT HOLDINGS
M.G. Bryan Acquired August 2016. M.G. Bryan is a leading manufacturer and supplier of oilfield service (“OFS”) equipment and a distributor of industrial engines. The Company designs, assembles, and maintains specialized OFS equipment primarily utilized for pressure pumping or hydraulic fracturing and provides aftermarket parts and services to the oil and gas industry.
XRI Blue Acquired August 2016. XRI is a leading water resource management company engaged in the sourcing, production, transportation, storage, and sale of water for use in the upstream exploration & production (“E&P”) industry.
 
 
 
 
Investment Professionals  View Team Details >
Head of Morgan Stanley Energy Partners
23 years industry experience
Managing Director
33 years industry experience
Managing Director
13 years industry experience
Executive Director
11 years industry experience
Vice President
10 years industry experience
Vice President
8 years industry experience
Andrew Griffin
Investment Professional
Benjamin Harrison
Investment Professional
Michael Mocharla
Investment Professional
Austin T Sandvik
Investment Professional
Calvin White
Investment Professional

CONTACT US

For more information about Morgan Stanley Energy Partners, please contact
private.equity@morganstanley.com

 
 
 
 

As of September 30, 2017. Team information may change from time to time.

Alternative investments are speculative and include a high degree of risk. Investors could lose all or a substantial amount of their investment. Alternative investments are suitable only for long-term investors willing to forego liquidity and put capital at risk for an indefinite period of time. Alternative investments are typically highly illiquid – there is no secondary market for private funds, and there may be restrictions on redemptions or assigning or otherwise transferring investments into private funds. Alternative investment funds often engage in leverage and other speculative practices that may increase volatility and risk of loss. Alternative investments typically have higher fees and expenses than other investment vehicles, and such fees and expenses will lower returns achieved by investors.

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Funds of funds often have a higher fee structure than single manager funds as a result of the additional layer of fees. Alternative investment funds are often unregulated, are not subject to the same regulatory requirements as mutual funds, and are not required to provide periodic pricing or valuation information to investors. The investment strategies described in the preceding pages may not be suitable for your specific circumstances; accordingly, you should consult your own tax, legal or other advisors, at both the outset of any transaction and on an ongoing basis, to determine such suitability.

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