Kohlberg Kravis Roberts & Co. L.P.
), the global investment firm, drives yet another step in the
energy sector in Canada with plans to invest a minimum of $500
million and more in the coming five years, according to a
Wall Street Journal
report. The company proposes to open its first Canadian office in
Calgary, the hub of oil reserves, next month, marking its sixth
office in North America.
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Notably, in Dec 2013, Kohlberg Kravis invested C$250 million in
Torq Energy Logistics Ltd. to aid the capital plans and
acquisition strategy of the latter. The company operates as a
transport service provider for shipping crude oil by rail in
In view of the significant capital needs of the oil and gas
producers, Kohlberg Kravis' investment objective is to meet their
funding needs, thus ruling out direct acquisition of the
companies. The company will explore prospects in upstream oil and
gas production, midstream pipelines and related infrastructure
and energy services businesses.
This comes as a strategic move by the company to capture the
rising demand for private-equity financing in Canada's energy
sector and consequently enhancing its global footprint.
Though Canada possesses a flourishing energy sector, it has to
combat a lack of public share offerings and foreign investments.
However, this paved the way for private equity firms like
Kohlberg Kravis to penetrate into the market. According to
Canada's Venture Capital and Private Equity Association,
private-equity investments in oil and gas deals booked a
significant $1.3 billion, marching ahead of other sectors during
the first nine months of 2013.
Currently, Kohlberg Kravis enjoys significant exposure in Canada
through its investments in Torq Energy Logistics and Westbrick
Energy Ltd. The latest initiative seems promising for the company
as it will further strengthen its long-term strategy of inorganic
growth. Alongside, the company continues to benefit from its
presence in varied sectors ranging from software to healthcare.
Kohlberg Kravis carries a Zacks Rank #3 (Hold). Some
better-ranked investment managers include
Artisan Partners Asset Management Inc.
Affiliated Managers Group Inc.
Ameriprise Financial, Inc.
). Artisan Partners carries a Zacks Rank #1 (Strong Buy), while
both Affiliated Managers and Ameriprise Financial hold a Zacks
Rank #2 (Buy).