A downstream private equity firm is a type of investment firm that focuses on providing capital to companies within the oil and gas industry. These firms typically offer financial solutions for their clients’ growth needs. The term is most often used in reference to the oil and gas industry, where downstream generally refers to refineries, marketing and distribution of refined products, and petrochemicals.
With the shale revolution in full swing, upstream has become a more commonly used term as producers focus on extracting hydrocarbons from tight rock formations such as shale and sandstone. However, downstream remains an integral part of the oil and gas business as it accounts for two-thirds of all jobs in the sector. And while refining margins have come under pressure due to increased global competition and overcapacity, downstream still offers attractive investment opportunities.
Why Downstream Companies Work with Private Equity Firms
As one of the leading downstream private equity firms, Trace Capital has the experience and expertise to help your company grow. We provide our clients with tailored financial solutions that meet their specific needs. The downstream energy industry has several reasons why it works with private equity firms:
- Access To Capital – A Downstream private equity firm has much capital to invest in companies, which can be helpful for companies that need funding for growth or expansion.
- Business Growth Expertise – A downstream capital growth firm has experience in helping businesses grow and expand, which can benefit downstream companies that want to increase their market share or enter new markets.
- Long-Term Focus – An investment firm downstream is often willing to be patient investors, which can be helpful for companies that are not generating immediate profits or facing complex challenges.
When it comes to downstream private equity, Houston-based firm Trace Capital is one of the leading firms in the space. The firm has a long and successful track record of providing capital to companies within the downstream sector of the oil and gas industry. The downstream energy industry in Houston is a significant economic engine, employing more than 100,000 people and generating more than $27 billion in economic activity each year. The downstream sector is made up of four main parts: refining, marketing, pipelines, and petrochemical production.
Refining is the process of converting crude oil into usable products like gasoline and diesel fuel. Houston refineries produce nearly 4 million barrels of petroleum products each day, making it the largest refining center in North America. Marketing involves transporting and selling refined products to consumers and businesses. The Houston area is home to one of the largest marketing hubs in the country. More than 2,000 companies are involved in regional marketing operations, and they generate more than $10 billion in annual sales.
Pipelines transport oil and liquid products from refineries to markets across the country. There are more than 5,000 miles of pipelines in the Houston area, making it one of the most pipeline-dense regions in the world. The pipelines play a vital role in getting products to market quickly and efficiently. Petrochemical production refers to the manufacturing of chemicals from hydrocarbons. The Houston area is home to more than 50 petrochemical plants, which account for nearly 60% of U.S. petrochemical production capacity. These plants produce a wide range of products, including plastics, fertilizers, and pharmaceuticals.
How Trace Capital Stands Apart as a Downstream Growth Capital Firm
Trace Capital Management is a downstream private equity Houston firm focused on value and growth investments across the global energy landscape. Besides downstream, Trace has also invested in upstream, midstream, power, industrial companies, and more.
Trace’s investment philosophy is built around a few core tenets:
- We invest for the long term – Our average investment holding period is four to seven years, which gives us the time horizon necessary to generate compelling returns.
- We focus on value – We seek to invest in companies that we believe are undervalued by the market and have the potential to generate significant upside.
- We take an active approach – We work closely with our portfolio companies to help them achieve their strategic and financial objectives.
- Investment firm downstream – We have a global presence, allowing us to take advantage of opportunities wherever they arise.
- We invest across the energy landscape – We believe that the energy sector is undergoing a significant transformation and are positioned to take advantage of the resulting opportunities.
With over $ 1.4 billion in assets under management, Trace Capital is one of Houston’s largest downstream private equity firms.
Contact Trace Capital To Learn More
Companies in the energy sector are increasingly looking for a reliable downstream capital growth firm to help them achieve their financial objectives. Trace Capital is committed to working with companies across the energy landscape to help them overcome challenges and capitalize on opportunities. If you are a downstream company looking for capital to grow your business, Trace Capital should be at the top of your list. We have the experience, expertise, and means to help you achieve your goals.
700 Louisiana St, Ste 3700
Houston, TX 77002
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