Firm: NGP Energy Capital Management
Fund: NGP Energy Technology Partners II LP
Target: $300 million
Investors are lining up to back the sophomore fund of
The majority of funds dedicated to energy technology focus on early-stage investments, but NGP Energy Technology Partners prefers to invest in more established companies. “We think the risk-reward is much better for a company that has $5 [million] to $10 million in revenues than a company that’s got zero. The challenge of going from no revenue to $10 million is much harder than going from $10 million to $50 million, or $100 million,” said Philip Deutch, a managing partner at the Washington, D.C.-based firm.
So far, the firm, an affiliate of Natural Gas Partners, has used its inaugural fund to make 10 investments, including ones in groSolar, a distributor and installer of solar panels; Renewable Energy Group, a biodiesel producer that also provides construction services for biodiesel plants throughout the United States; and Southwest Windpower, a manufacturer of wind generators. The firm’s portfolio companies bring in more than $400 million in annual revenue, according to Deutch.
Although the portfolio contains some alternative technology companies, such as wind and solar power businesses, the firm also invests in traditional energy outfits and doesn’t define itself as a green investor. “We try to stay away from labels because that’s not how we think about things,” Deutch said. “We’re just trying to generate return for our investors. We give our investors exposure to all parts of energy technology. We’re not trying to be green or clean.”
NGP Energy Technology Partners has six investment professionals and is part of a family of energy-focused funds with a total of $9.3 billion under management.—J.P.