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KKR builds $2-billion war chest for North American energy

American financier and billionaire Henry Kravis of KKR.

Ryan Taplin/CP

KKR Inc., the investment firm led by Henry Kravis and George Roberts, has amassed a $2-billion (U.S.) fund targeting unconventional oil and gas resources in North America.

The New York-based firm said its KKR Energy Income and Growth Fund I attracted a wide array of global investors, including pension funds, sovereign wealth funds, insurance companies and individuals. It will concentrate on joint-venture drilling, acquiring assets and seeking out other "opportunistic" investments, it said.

So far it has deployed $350-million in eight separate investments.

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"Pursuing asset-level and structured investments, we intend to deploy creative and flexible structures that seek to best meet the needs of our partners while delivering benefits associated with real-asset ownership," Marc Lipschultz, KKR's global head of energy & infrastructure, said in a statement.

Last month, the firm opened an office in Calgary to find Canadian energy investments. It is scouting for opportunities in all facets of the business, from production to infrastructure to oil-field services, Brandon Freiman, the head of the new office, said in January.

KKR said it has put $4.9-billion into oil and gas over the past five years, including buyouts, equity purchases, joint ventures and other investments. It made its first foray into unconventional energy in 2010 through a partnership with Hilcorp Energy in the Eagle Ford shale of Texas.

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About the Author

Jeffrey Jones is a veteran journalist specializing in energy, finance and environment for The Globe and Mail’s Report on Business, based in Calgary. Before joining The Globe and Mail in 2013, he was a senior reporter for Reuters, writing news, features and analysis on energy deals, pipelines, politics and general  topics. More

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