What do investors look for when deciding where to invest in mining and energy? Many things – according to one of the world’s major energy and mining investment houses, EIG Global Energy Partners.
At 2018 Energy Mines and Money in Brisbane today, EIG’s Sydney-based Managing Director Andy Zhmurovsky unpacked his company’s thinking, revealing that while the way investors managed risk depends on their style of investing, quality management teams that deliver proven results over time are highly sought after.
With $18.9B under fund management, EIG said that two-thirds of that was directed towards energy and mines investments, comprising the $14.4B Energy Fund Series and $2.1B Habour Fund. He said investment decisions were only made following stringent due diligence processes undertaken by an internal team boasting some 73 technical and operational professionals.
“We look for assets, analyse them and look at due diligence through our in-house engineering and technical specialist teams.
“We also have a very strong ESG diligence process, which became prevalent in our group around 10 years ago. We focus on environmental pressures, and what interesting impacts this may have on an asset, some more so than commodity cycle analysis,” Mr Zhmurovsky said.
He said EIG is an asset-focused decision maker.
“Ultimately it’s about managing risk in a way that is commensurate for the expected level of return,” he stated.
“On behalf of our clients we invest in energy, mining, infrastructure and power and renewables, and we’ll tailor our approach depending on the quality of the asset, where it sits in the life cycle, and the level of risk exposure.
Mr Zhmurovsky said right now the Eastern Australian Gas market was on his radar, because of the potential upside in the local market, and the global view that energy is a growing market in any case. EIG has a stake in local gas producer Senex, which has acreage in both the the Cooper Basin and Queensland’s Surat Basin.
“LNG is becoming the virtual pipeline for natural gas, so we like areas that can connect to LNG infrastructure.
More broadly, EIG wants to be ready to act where market liberalisation opens new markets, and sees opportunities in US shale, where basin fundamentals support project economics across the economic cycle.
On coal, Mr Zhmurovsky said he didn’t believe the industry was dying, but it’s definitely changing.
About EIG Global Energy Partners
Since 1982, EIG has been one of the leading providers of institutional capital to the global energy industry, providing financing solutions across the balance sheet for companies and projects in the oil & gas, midstream, infrastructure, power and renewables sectors globally. EIG has invested more than $26.3 billion in 328 portfolio investments in 36 countries. The firm’s deep sector expertise and internal technical capabilities permit EIG to structure creative solutions for our industry partners in complex situations.
About Energy Mines and Money Australia
Energy Mines and Money Australia showcases strategic mineral, coal, oil and gas opportunities, matching projects with global investment throughout a two-day conference and exhibition at the Brisbane Convention & Exhibition Centre from 11-13 June 2019. Supported by the Queensland Government, the programme will examine the trends and forecasts that will shape investment and development for the mining, oil and gas industries moving forward.
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