Lord Browne back to market with Riverstone energy listing

Former BP chief executive Lord Browne of Madingley is to return to the London Stock Exchange after his latest venture, private equity firm Riverstone Energy Limited (REL), today said it plans to raise up to £1.5 billion by listing a new energy vehicle.

The new company, whose shares are expected to start trading on October 29, will invest across the global energy industry, focusing on exploration and production, according to the announcement.

Lord Browne is co-head of Riverstone Holdings, the world’s largest renewable energy fund, with $3.5 billion (£2.2 billion) in equity. It specialises in energy investments, and is best-known as the main backer, with a 44% holding, of Cuadrilla, the UK’s most prominent fracking company. Its oil exploration activities in the West Sussex village of Balcombe have met with high-profile protests.

Cuadrilla was also behind a series of earth tremors in the Blackpool area in 2011. Lord Browne, who ran BP between 1995 and 2007 and left after lying in court about his relationship with a man, is a partner at Riverstone and will be a board director of REL, the listed vehicle. He is also chairman of Cuadrilla.

REL is raising £550 million through a placing with five cornerstone investors, including McNair Group, owned by Robert McNair, who also owns the Houston Texans football team. KFI, a private investment vehicle of Louis Bacon, founder of Moore Capital Management, and privately owned Hunt Oil are also investors.

The flotation, which is being co-ordinated by Goldman Sachs and JPMorgan Cazenove, is part of a trend in which private equity firms are using public markets to access fresh sources of capital from retail investors.

US buyout giant Kohlberg Kravis Roberts is in the process of setting up two mutual funds investing in various types of debt.

“Riverstone Energy Limited presents a unique opportunity for public market investors to gain exposure to the energy sector via Riverstone,” said REL chairman Sir Robert Wilson.

Lord Browne has been a partner of Riverstone since leaving BP six years ago.