Mon, Apr 21, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Private Equity Strategies

Sector View: Energy Focused Tailwater Capital Spins Out of HM Capital

Monday, May 20, 2013

By: Bailey McCann, Private Equity Strategies

Dallas-based, Tailwater Capital has successfully launched, and raised its first fund - Tailwater 1. Tailwater partnered with Landmark Partners to complete the secondary purchase of HM Capital's legacy energy portfolio, and is making investments that follow with HM Capital's approach. Tailwater principals Jason Downie and Edward Herring, have been a team for over 14 years, including work with HM Capital, and were involved with the legacy investments that are part of Tailwater 1.

Going forward, Tailwater will focus on investing in the energy industry with a primary focus on investments within the midstream and upstream sectors. The portfolio includes BlackBrush Oil & Gas, TexStar Midstream Services and SunTerra Well Services. During their tenure with HM Capital, Downie and Herring were responsible for the sourcing of these investments as well as the oversight of each company's performance through representation on each company's board. Both men spoke with Private Equity Strategies about the launch of their firm and new fund.

"We feel like US infrastructure and capital spend to get hydrocarbons to the market will continue to have an opportunity for returns over the next several years," Downie said. "We think it is a great time to be invested in oil and gas."

"We were part of the HM Capital team for 14 years, so we are very familiar with Landmark Partners as an LP, they have been involved since day one, and this is very much an extension of what we were already doing together," Herring explains. Herring and Downie have worked with Landmark Partners on investments in this space since the early 2000s, predating involvement with these portfolio companies.

Tailwater and HM Capital were represented by a team from Weil, Gotshal & Manges LLP led by partner Rodney Moore and Landmark Partners was represented by a team from Kirkland & Ellis LLP led by partner Michael Belsley.

"With Tailwater 1 we are bringing new capital to these investments, and are already almost 80% invested in our portfolio companies," Downie explains. "We are looking at a Tailwater 2 fund for calendar year 2014."

Investments will be focused on oil and gas companies in the US and Canada with an average bite size of $50-100m. As a team, the managing partners have invested over $1bn in equity capital, in the sector.

 
This article was published in Opalesque's Private Equity Strategies our monthly research update on the global private equity landscape including all sectors and market caps.
Private Equity Strategies
Private Equity Strategies
Private Equity Strategies
Private Equity Strategies


Banner
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing
  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Opalesque Exclusive: Classic Auto Funds Limited (CAF) launches several car investing funds[more]

    Bailey McCann, Opalesque New York: A new trend in alternative alternatives is emerging - car appreciation funds. Classic Auto Funds Limited (CAF) is the first to market with several funds that make super elite luxury cars into real asset investments. As a result of growing overseas demand couple

  2. Investing – Big hedge funds bought Puerto Rico's junk bonds, Fidelity explores new trading venue amid flash trade concerns, Crisis-era Greek bonds reward early buyers with big effective returns, Cargill unit discloses stake in Freddie preferred[more]

    Big hedge funds bought Puerto Rico's junk bonds From Reuters.com: Several large hedge funds doubled down on Puerto Rico in last month's giant bond sale despite the U.S. territory's financial struggles, the Wall Street Journal reported, citing confidential documents reviewed by the newspa

  3. Opalesque Exclusive: Hedge fund replicators evolve[more]

    Bailey McCann, Opalesque New York: Hedge fund replicators as a group of products tend to get a bad rap from hedge fund managers who suggest that the best a replicator can offer is dynamic beta capture. A

  4. Opalesque Exclusive: Pensions, endowments, family offices reconsider life settlement investments[more]

    Bailey McCann, Opalesque New York: Hedge funds were once the largest investors in the life settlement industry, now the industry is seeing more interest from pensions, endowments and family offices directly. Life settlements have always been considered a niche part of the investing landscape, an

  5. SEC allows investment funds to use social media[more]

    Bailey McCann, Opalesque New York: The Securities and Exchange Commission (SEC) has released new guidance letting investment funds and advisors use social media to promote client reviews. The guidance seeks to assist investment managers in developing compliance policies and procedures reasonably