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A new entrant has emerged in midstream energy investing - Texas-based Pearl Energy, which is focusing on finding value investments in domestic oil and gas production. The firm’s debut fund closed on its $500 million hard cap, and will target investments requiring between $25 - $75 million of equity capital.

Pearl is founded by Billy Quinn, a former Co-Managing Partner of Natural Gas Partners, and Chris Aulds, the former Co-CEO of TEAK Midstream.

“We believe in the long-term fundamentals of the energy business,” Quinn tells Private Equity Strategies. “In terms of the pricing right now in energy, we see it as a short to medium-term dislocation between supply and demand, but that will eventually normalize. There are great management teams in the industry that have both expertise and a technical advantage, and we will be there to back those companies.”

Quinn adds that the firm will be looking to build up platform companies through acquisition. “There is significant value in the market right now. With a $25 - 75 million investment of equity and one-to-one leverage companies will be able to get $150 million in buying power to build and expand. That’s meaningful.”

Pearl will primarily target domestic oil and gas opportunities in the US and Canada. Quinn says they will be looking at around 12 investments for this fund. “I think we are at the front-end of a very acquisitive time in energy. A lot of companies are over leveraged and under hedged.”