The Energy Mezzanine team invests primarily in mezzanine debt in energy and power projects and companies in the U.S. and Canada. The team offers distinct competitive advantages as a result of its sector and product focus, coupled with the investment team’s relationships, industry expertise, knowledge of specialized credit structures and privileged access to investment opportunities due to an extensive deal-sourcing network. The group is co-headed by David Albert and Rahul Culas.
The team’s core strategy is to pursue privately negotiated debt investments in North America energy and power projects and companies. The team augments its core strategy by seeking investments in dislocated secondary debt markets. The group’s debt investments can take on many forms including senior secured debt, second lien debt, senior subordinated debt, senior holding company debt, convertible debt and preferred stock.
Consistent with The Carlyle Group's value-based investment philosophy, the Energy Mezzanine team has a credit-based investment process with a focus on capital preservation and downside protection. In order to achieve this objective, the team targets investments with the following characteristics: (i) collateralization by hard assets, (ii) appropriate range of leverage profiles (iii) current cash yield, (iv) proven technology, (v) mitigated financial, commodity, and construction risks (if applicable).
Key elements of Energy Mezzanine’s investment approach are as follows:
- Source significant investment opportunities through the team’s extensive industry relationships and deal sourcing network
- Target investment opportunities in the energy and power sectors that meet the credit investment criteria (identified above)
- Invest with proven equity sponsors and incentivized management teams
- Structure investments with security, structural protections, current cash pay and upside potential