When Jim Bernhard stepped down as CEO of The Shaw Group in the wake of the company’s 2013 acquisition by CB&I for slightly more than $3 billion, many wondered what he was going to do. Some speculated he might dabble in politics. Others predicted he would delve into real estate.
Bernhard had something bigger in mind.
As Business Report details in its new cover story, Bernhard and a handful of his senior executives from Shaw had formed Bernhard Capital Partners—a private equity firm that promised to invest in companies that operate in the energy services industry—within just two months of packing up the executive suite in what was then Shaw Tower.
The plans for BCP were still vague back then. Bernhard and his partners were all under a two-year non-compete agreement with CB&I, so they had to lay low for a while. Jeff Jenkins, a founding partner of BCP and the firm’s second in command, says the partners knew the types of investments they wanted to pursue but hadn’t mapped out anything specific.
“All we knew was that we were going to work together and were going to set up an investment firm,” he says. “We didn’t know what it was going to be.”
But they did know their investments would be thematic—focused on the midstream and downstream sectors of the energy industry. BCP would build and buy companies that would profit and grow because of the abundance of cheap natural gas.
Over the next few months, those plans would begin to gel. In October 2014, the firm’s principals took to the road to begin fundraising. By the time the non-compete with CB&I had expired in early 2015, BCP was ready for business, announcing the creation of Epic Piping, a state-of-the art pipe fabrication company that would develop, among other things, a 268,000-square-foot facility on 70 acres in Livingston Parish. Over the next several months, announcements of more new companies would follow.
Earlier this spring, BCP successfully closed its initial equity fund, having raised more than $750 million in capital commitments from institutional investors around the world. In just 18 months, it has created four rapidly growing portfolio companies that, together, employ more than 15,000 workers throughout the U.S., Canada and Middle East.
It is impressive by any standards but especially for a first-time fund. Already, the companies owned in whole or in part by BCP have 40% as many employees as The Shaw Group did when Bernhard left, and the firm has only spent about a quarter of the capital committed from institutional investors. There is plenty more to invest, and BCP-owned companies are making
acquisitions at the rate of about one per month on average.
The growth comes at a time of extreme uncertainty in the oil market. During BCP’s 18-month fundraising period, oil fell to its lowest level in more than a decade. The market has shifted dramatically since Bernhard and his colleagues started sketching out their plans for BCP.
But Bernhard is undaunted. BCP’s investment theme is based around the abundance of cheap natural gas. As long as that doesn’t go anywhere, BCP’s future is unlimited.
Read the full cover story, which includes infographics about Bernhard Capital Partners’ portfolio companies and how the firm compares to other energy-focused funds. Send your comments to editors@businessreport.com
