New Stream Capital launched a specialty energy finance investment fund focused on lending to the North American oil and gas sector. The New Stream Energy Solutions (NSES) fund provides working-capital loans to exploration and production (E&P) and distribution companies. The fund has approximately $100 million in assets and commitments.
NSES will leverage its ability to invest across the full spectrum of the capital structure -- from senior debt to direct ownership -- in order to tailor investments that fit the unique funding needs of each project. The goal of the fund is to generate a high rate of return while protecting principal with the underlying collateral value of the assets. NSES will focus primarily on transactions between $5 million and $40 million. Recently completed transactions include a $10 million financing for a natural gas producer in Kentucky, a $16 million financing for an oil and gas producer in Texas and a $28 million financing for an oil and gas producer in Texas.
"The launch of this energy finance fund enables investors to gain exposure to the energy markets without taking the directional risk normally associated with more typical trading strategies," said David A. Bryson, Managing Partner. "The energy sector offers a unique opportunity for investors. A significant number of lenders have scaled back due to the ongoing credit crisis precisely at the time when energy producers need to increase capacity."
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