Billionaire John Arnold backs energy-focused loan fund – sources


A pump jack works at the Permian Basin oil and natural gas producing area near Odessa, Texas, U.S., February 10, 2019. Picture taken February 10, 2019. REUTERS/Nick Oxford

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May 17 (Reuters) – John Arnold, a former Enron trader and hedge fund leader known as the ‘Natural Gas King’, is backing an energy-focused credit fund that will aim to take advantage of commodity prices premieres at multi-year highs, sources familiar with the matter said.

Arnold, who reportedly earned around $750 million trading natural gas for Enron the same year he went bankrupt, backs Energy Opportunities Capital (EOC) Partners LLC through his family office.

Centaurus Capital LP has committed around $500 million in equity to EOC Partners, the sources say.

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EOC Partners is led by two former managing directors of energy private equity firm EIG – Richard Punches, who led oil and gas investing at the firm, and Nick Fersen, who worked on investments loan – according to a March 30 filing with the US Securities. and exchange commission.

While EOC’s filing does not specify a target industry or investment size, the sources said it was exploring debt financing deals of between $50 million and $200 million in the oil and gas exploration and production industry.

The sources requested anonymity to discuss confidential matters. Arnold and his family office did not respond to emails seeking comment. The Punches declined to comment.

EIG did not immediately respond to a request for comment.

Arnold became chief trader at Enron, but after its collapse, which was one of the worst financial scandals in US history, he started Centaurus Advisors. His bets on natural gas prices at the hedge fund made him the youngest American billionaire in 2007.

In 2012, however, with natural gas prices plummeting, the 38-year-old Arnold retired from managing other people’s money to focus on philanthropy with his wife. Through his family office, he continued to invest in the energy sector.

EOC Partners support coincides with natural gas trade at levels not seen since Arnold made his fortune, as Russia’s invasion of Ukraine crushes global supply just as demand returns to pre-pandemic levels.

U.S. natural gas futures traded on Tuesday at $8.26 per million British thermal units, more than double their price at the start of the year. Earlier this month they soared to $9, their highest level since 2008.

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Reporting by Shariq Khan in Bengaluru and David French in New York; Editing by Anil D’Silva

Our standards: The Thomson Reuters Trust Principles.


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