How do we plan to invest in the Energy Sector?
GHL has committed to invest private equity capital
in the energy industry. We started with seed capital
of US$25 million but are planning to raise
additional capital to expand the fund.
In case you are wondering, private equity refers to
committed share capital in an unlisted company, it
provides long-term, committed capital to help
unlisted companies grow and succeed. It is “patient
capital”, and would provide additional local
financing options to energy sector entrepreneurs and
project developers. These sources of capital would
complement bank debt and bond financing currently
available domestically. This is yet another example
of GHL’s drive to continuously innovate to meet the
needs of the markets we serve.
It is projected that US$12 billion will be invested
in the T&T energy sector over the next five years.
Of this amount, an estimated deal pool of US$1
billion will be accessible to local financial equity
investors such as GHL.
Prometheus Energy Partners will consider investments
in the upstream, midstream, downstream, power and
service sectors in Trinidad and Tobago, and the
wider Caribbean region. We will take both minority
and controlling interests in the companies in which
it invests.
It will be managed by our existing professional
resources in corporate finance, investment
appraisal, business advisory, and fund management.
An Advisory Board of energy sector experts will
complement this internal expertise.
Why the Energy Sector?
Trinidad and Tobago’s energy sector is expected to
enjoy unprecedented levels of oil and gas production
over the next 10-20 years, driven by strong global
demand for these commodities and their derivatives.
While many may still associate the energy industry
with high risk and volatile returns, the migration
of our energy sector from the oil-based one of the
1970s and 1980s to gas-based provides a more
attractive business model for potential financial
investors.
The mission of the Vision 2020 Energy Sub-Committee
is to have “an integrated and fully developed energy
sector spanning the value-chain, that is a key
driver of a sustainable and flourishing local and
regional economy while attaining global
competitiveness in all of its sub-sectors by 2020”
We at GHL believe in “the Vision” and are committed
to investing in the engine of our tomorrow.
Would energy investments complement our existing
businesses?
In keeping with our history of exploring, developing
and pioneering new business opportunities, we have
set our sights on participating in this exciting
upside.
While the energy sector may seem far removed from
our insurance and asset management businesses, our
proposed approach to investments in Energy will
actually complement existing product offerings,
leverage our strengths in risk appraisal and
investment management, and boost our returns on
shareholder capital.
GHL ‘s investment of shareholders’ funds in this
venture is distinct from policyholders’ funds, which
will continue to be managed with the usual prudence
and professionalism that our customers have grown to
expect.
How are Prometheus Partners different from the other
“energy funds”?
Unlike other “energy funds” being touted in the
market, Prometheus Energy Partners is a private
equity portfolio representing GHL’s shareholder
capital available for investments in energy projects
or companies.
Prometheus is NOT a mutual fund; it is a mechanism
to provide the energy sector with local capital and
ownership. We are NOT selling securities; we are
investing and providing a much needed alternative
source of financing for the local energy sector.
What characteristics are we looking for in an
Investment?
• Talented and experienced management teams with a
sterling reputation and entrepreneurial spirit.
• New ventures that are market-oriented with a
comprehensive and thoughtful business plan.
• Established, operating businesses with tested
business models and sustainable competitive
advantages in attractive, growing markets.
• Ventures with the potential to generate higher
than average returns on invested capital.
• Leaders in the market(s) they serve, or clear
potential to become one.
• Viable future exit alternatives, either through a
public offering, private placement or leveraged
recapitalization.
• Our Target Investment Size ranges from US$2
million to US$10 million.
• Our investment planned holding period is 5 to 7
years.
What next?
Of the US$10 billion of non-bank institutional
capital in the country, we present the first Private
Equity portfolio in the Caribbean.
As pioneers in the Caribbean financial sector, we
believe that we have a critical role to play in
driving greater local participation in the energy
sector and a broader distribution of the wealth
created by our national patronage.
We believe that Prometheus will lead the way in
attracting greater amounts of local institutional
and private capital into our increasingly important
energy.
|
