Upload
barry-brighton
View
216
Download
1
Tags:
Embed Size (px)
Citation preview
Alternative Investments Division
Click to edit Master subtitle style
TCW Asset Management Company
A Market Leader in Energy & Infrastructure Investing
TCW ENERGY & INFRASTRUCTURE GROUP Alternative Investments Division
2
TCW Overview
• Established in 1971 in Los Angeles, California
• Approximately $120 billion under management or committed to management as of September 30, 2008
• Approximately 1,430 institutional and private clients
• TCW Staff of over 655 individuals, including 390 investment and administrative professionals
• The TCW Group, Inc. (TCW) is an indirect subsidiary of Société Générale, S.A., and a member of the Société Générale Asset Management (SGAM) division
• Offices:
Los Angeles
New York
Houston
London
Sydney
TCW ENERGY & INFRASTRUCTURE GROUP Alternative Investments Division
3
TCW Energy & Infrastructure Group
• Among the leading institutional providers of capital to the energy sector globally
– Singular focus on energy and energy-related infrastructure
– Broad offering of capital to industry (senior debt through equity)
– Global investment focus (invested in 30 countries on 6 continents)
– TCW’s first alternative product (1982)
• 27-year track record; the longest in the industry
– 14 prior funds
– Current assets under management of $7 billion in energy globally
– 260+ portfolio investments
– Demonstrated investment performance through multiple commodity and business cycles
• Strong and consistent performance over 27 years
• Global investment platform
– 35 investment professionals
– Operate from offices in Los Angeles, Houston, New York, London and Sydney
TCW ENERGY & INFRASTRUCTURE GROUP Alternative Investments Division
4
Target Market
• Actively investing throughout the energy value chain on a global basis
Upstream Infrastructure Midstream Gas to Liquids Transportation Gas to Electrons
Reserve-based DevelopmentProduction Payments
Forward Oil Sales
PipelineGathering Systems
Processing FacilitiesGas StorageBunkering
LNG TankersSpecialty Tankers
VLCC Vessels
Production PlatformsDrill Ships
FPSOsDrilling Rigs
LNGSynfuels
Processed Gas(methanol, fertilizer, DME)
LNG Regasification TerminalsGas Sales, Pipelines,
Gas-Fired Power Plants,Electricity T&D
Renewables
WindSolar
BiofuelsGeothermal
TCW ENERGY & INFRASTRUCTURE GROUP Alternative Investments Division
5
EIG History
• Capital Raised: $10 billion
• # Funds: Currently investing 14th fund
• Invested Capital: $9.7 billion
• # Investments: 260+ Investments
• Current Outstanding: $4 billion
• Capital Available Today: $1.2 billion
TCW’s Energy & Infrastructure Group has had a consistent presence in the energy markets over the last 27 years.
The TCW Energy & Infrastructure Group’s History of Success in all Markets
TCW ENERGY & INFRASTRUCTURE GROUP Alternative Investments Division
6
EIG Product Platform
Product Platform Active Funds
Mezzanine and Equity Fund XIV, Cogen & ECEF
Senior Debt GPF III
High Yield Senior GPF II
Special Situations TEP and Separate Accounts
Broad offering of capital to industry, offering senior debt through to equity
Breakdown of Committed Funds (as at December 2008)
Senior Debt,
$2,734.0
Mezzanine and
Equity, $6,821.0
Special
Situations,
$502.0
TCW ENERGY & INFRASTRUCTURE GROUP Alternative Investments Division
7
EIG Investment Breakdown – FYE 2008 $2.2 Billion
Upstream
O&G $841.8
Other Infra.
$15.0 Midstream
O&G $236.5
Other O&G
$40.0
Power
$489.1
Transport.
$95.0
Mining
$235.0
Other
Energy
$30.0
Investments By Sub-Sector
As at Dec 2008, In $ Millions
Investments By Ranking
As at Dec 2008, In $ Millions
Investment
Grade $186
Mezzanine
$1,584
Equity $110
High Yield
$351
8
TCW ENERGY & INFRASTRUCTURE GROUP Alternative Investments Division
Oil and Gas Risk/Return Profile
EquityEquity
Pref. EquityPref. Equity
MezzanineMezzanine
VPPVPP
Senior DebtSenior Debt
TCW Sweet Spot
Risk
Return
PDP PDNP PUD PROB/POSS Exploration Prospects
Engineering Risk Geological/Geophysical Risk
TCW’s focus is on engineering and development risk, not geological and exploration risk
9
TCW ENERGY & INFRASTRUCTURE GROUP Alternative Investments Division
Capital Markets
Relative Equity Performance
0%
50%100%
150%
200%
250%300%
350%
2004 2005 2006 2007 2008
DJIA S&P 500 DJ Energy Sector
Oil and Gas Prices
$0
$40
$80
$120
$160
2004 2005 2006 2007 2008
$0$2$4$6$8$10$12$14$16
WTI Oil HH Gas
Credit Spreads
0
24
68
10
1214
16
2004 2005 2006 2007 2008
%
BBB BB B
2008 Issuance
$0
$10
$20
$30
$40
$50
Jan-08
Feb-08
Mar-08
Apr-08
May-08
Jun-08
Jul-08
Aug-08
Sep-08
Oct-08
Nov -08
Dec-08
bln
High Yield Issuance Leveraged Loan Issuance
Source: Bloomberg, Morgan Stanley
10
TCW ENERGY & INFRASTRUCTURE GROUP Alternative Investments Division
Recent Trends
Last Few Years:
• Great time to be an issuer of capital
• Abundance of private equity, public equity, and cheap debt capital
• Widely syndicated debt issuances with generous credit terms
• New and less experienced investors/lenders
• Active M&A market with increasing asset valuations
Today:
• M&A and capital markets have dried up
• Bank re-determinations putting pressure on corporate balance sheets
– Borrowing Base reductions and overadvances coming due with little or no ability to refinance
– Unappealing prospects of obtaining amendments from broad group of lenders with limited E&P experience
• E&P companies forced to high grade projects and live within cash flow
• Resource play economics largely depend on entry/acreage costs
• Investors/Lenders presented with appealing risk/return opportunities in the high yield debt markets
TCW ENERGY & INFRASTRUCTURE GROUP Alternative Investments Division
11
Disciplined, Value-Oriented Approach to Investing
• TCW’s Current Investment Bias• Stay the course: continue to focus on quality management teams and assets
• Presented with opportunities that historically we would not have seen
• Investment Size: $100-200 million
• Patience
• Keys to EIG investment style• Hard assets with long useful life
• Bottom-up internal technical analysis
• Secured by shares or assets
• Transparency to cash flow
• Active management through covenants and board presentation
• Upside potential through equity participation
• Experienced E&P Staff• Based in Houston
• 12 professionals with 5 petroleum engineers
• Senior people each have over 25 years of E&P experience
12
TCW ENERGY & INFRASTRUCTURE GROUP Alternative Investments Division
Recent TCW Deals (Q4 2008)
• California Steam Flood
– $250 million senior secured debt facility
– Interest Rate + Variable NPI
• Resource Play Development
– $200 million senior secured debt facility
– Interest Rate + NPI
• Australian Offshore Development
– $100 million subordinated debt facility
– Interest Rate + Warrants
TCW ENERGY & INFRASTRUCTURE GROUP Alternative Investments Division
TCW Contact Information
Houston Office:333 Clay Street, Suite 4150Houston, TX 77002713-615-7400 Main713-615-7460 Fax
Kurt Talbot 713-615-7426 [email protected] Hickey 713-615-7413 [email protected] Taylor 713-615-7410 [email protected] Taylor 713-615-7423 [email protected] Tharp 713-615-7437 [email protected] Meador 713-615-7425 [email protected] Punches 713-615-7415 [email protected]