Kenneth A. Hersh
| Kenneth A. Hersh | |
|---|---|
 | |
| Born | 1963 in Dallas, Texas, U.S. |
| Nationality | American |
| Alma mater |
Princeton University (BA in Politics) Stanford Business School (MBA) |
| Occupation | CEO & Co-Founder of NGP Energy Capital Management |
| Known for | Managed $13 billion. The company also has more than 260 investments.[1] |
| Spouse(s) | Julie Hersh |
Kenneth A. Hersh (born 1963, Dallas, Texas) is an American financier who specializes in the energy industry. Hersh is Chief Executive Officer of NGP Energy Capital Management, based in Irving, Texas. He is credited with pioneering the use of the now widespread “owner-manager” investment model in the natural resources sector.[2]
Early Life and Education
Hersh was born and grew up in Dallas, Texas, the son of a podiatrist and an economics professor.[3] He attended the St. Mark's School of Texas for both his primary and secondary education, graduating in 1981.[4] During his high school years, he served as the editor for the school paper, the leader of the debate team, and the president of the Wind Energy Club.[3] Upon graduation, Ken Hersh attended Princeton University, where he studied politics and graduated magna cum laude.[5] Hersh began his career following graduation. Hersh later obtained an MBA from Stanford University, where he graduated as an Arjay Miller Scholar.
Career
Ken Hersh joined Morgan Stanley’s investment banking division in 1985.[5]
Over the next few years, Hersh became aware of the innovative fund management approaches of Richard Rainwater, who would eventually become his mentor.[3]
Hersh wrote Rainwater an unsolicited letter in 1987, asking for a job and explaining his ideas on fund management. Rainwater was sufficiently impressed with Hersh that he offered him a position as a fund manager for Natural Gas Partners, the company that he was in the process of founding.[3] In 1988, Hersh joined Rainwater as the co-founder of Natural Gas Partners (NGP). Hersh has been with the firm ever since.[3]
At NGP, Hersh oversees strategic and investment activities for more than $9.5 billion in committed capital under the NGP umbrella.[3] These investment areas include Natural Gas Partners, NGP Energy Technology Partners, and NGP Global Agribusiness Partners.[6]
Hersh manages all investment activities at NGP Energy Capital Management and directs the firm’s strategic initiatives. During his time with NGP Energy Capital Management, he has overseen more than 260 investments in natural resource companies across North America.[7] In addition to directing some of the most prominent merger transactions and recapitalizations in the natural resources sector, Hersh has structured and negotiated transactions with a combined deal value of over $40 billion.[8] By achieving a 25-year gross IRR of 32% and a net IRR of 22%, Hersh has positioned Natural Gas Partners as one of the top investment firms in the United States.[1]
One of Ken Hersh’s most notable investments was Energy Transfer Partners, which netted NGP a nearly 3,000% return on investment over the course of five years. Hersh is also renowned for his ability to produce "30 percent average annual returns in an industry notorious for booms and busts."[3]
Investment Model
Ken Hersh has championed the owner-manager model of energy investment since joining NGP in 1988.[2] Utilizing principles developed by Richard Rainwater, Hersh creates platform companies focused on acquisitions that are each run by an independent CEO. Each CEO builds a portfolio of acquisitions that was being mismanaged or overlooked by the former owners. The platform company then assists each property to achieve its full potential.[2] Hersh believes in backing entrepreneurs who control high-producing entities, which allows NGP to enhance the organization’s offerings by reducing operating overhead and improving production levels.[9]
In the 1980s, this hands-off approach to investing was rare in the energy sector and looked upon with suspicion.[2] The success of Hersh and the other partners at NGP, however, helped to make this approach the norm.[2] These achievements have led to speaking engagements for Hersh at prestigious events, including the World Economic Forum, where he is a member [10] and has discussed finance and sustainable growth in Davos.[11]
Hersh views the establishment of the “startup buy and build” model of private equity as one of the most significant developments in the independent energy sector over the past two decades. During his time with NGP Energy Capital Management, he spent considerable time educating industry executives and investors about the potential benefits. This innovative structure was established as a viable approach to private equity. Hersh believes the “startup buy and build” approach has become an industry standard in PE.[12]
Looking forward, Hersh sees the restoration of a positive relationship between Washington and the U.S. energy industry as a key step to economic development.
Hersh also regularly presents at conferences on private equity, energy, and corporate finance and has been featured on CNBC as an expert on natural gas and energy investment.[13]
Philanthropy and Affiliations
Global Adaptation Institute, Chairman of the Board
St. Mark’s School of Texas, Board of Trustees, donated $5 million for the construction of the Robert K. Hoffman ‘65 Center.
National Association for Urban Debate Leagues (NAUDL), Board Member
Harvard Kennedy School, Dean’s Council
Stanford University Graduate School of Business, Advisory Council
International Business Council G20 CEO Task Force on Commodities
Princeton University Bendheim Center for Finance, Advisory Council
Dallas Citizens Council, Member
Family
Ken’s wife Julie is a successful author whose work focuses on mental health issues. Ken and Julie have two children and live in Dallas, North Texas.[14]
References
- 1 2 "NGP Energy Capital Management". World Economic Forum. Retrieved 11 December 2014.
- 1 2 3 4 5 Rob Robertson, "Kenneth Hersh: Faith in natural gas unshaken", The Fort Worth Business Press, January 21, 2011. Accessed October 22, 2011.
- 1 2 3 4 5 6 7 Elizabeth Souder, "Dallas-area energy investor Ken Hersh burns bright", The Dallas Morning News, October 19, 2010. Accessed October 22, 2011.
- ↑ St. Mark’s School of Texas, "$5,000,000 Gift Honors Hoffman", "St. Mark’s School of Texas," December 10, 2006. Accessed April 23, 2012.
- 1 2 Bloomberg News, "Executive Profile: Kenneth A. Hersh", Bloomberg News, Accessed April 12, 2012.
- ↑ "NGP Energy Capital Management - Investment Platforms". NGP Energy Capital Management. Retrieved 21 January 2015.
- ↑ "Kenneth Hersh". NGP Energy Capital Partners. Retrieved 11 December 2014.
- ↑ "Advisory Board Biographies". Princeton University. Retrieved 11 December 2014.
- ↑ Phyllis Berman, "Gas-Fired", Forbes, November 13, 2000. Accessed November 13, 2011.
- ↑ World Economic Forum, , World Economic Forum, Accessed October 27, 2011
- ↑ Davos Annual Meeting 2010: Financing Low-Carbon Growth (video). Davos, Switzerland: World Economic Forum. 2012. Retrieved November 13, 2012.
- ↑ "Twenty years of PE: NGP’s Hersh on the "Resource Curse"". Wall Street Journal. Retrieved 21 January 2015.
- ↑ NGP CEO: We are in a gas bubble (video). CNBC. 2012. Retrieved November 13, 2012.
- ↑ "Kenneth Hersh", Stanford Graduate School of Business, January 21, 2011. Accessed October 26, 2011.