Rainmakers #11 Ken Hersh: Capitalizing on Chaos
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Aug 29, 2024 Dive into the transformative journey of a leading private equity firm in the natural gas sector. Discover innovative investment strategies that target distressed industries for better returns. Hear personal anecdotes from a founder's career and the tension-filled moments of pivotal pitches. Learn about navigating early challenges with strategic asset acquisition and the revitalization of older wells. Explore how creative financing and experienced engineers played essential roles in reshaping the oil and gas landscape during the shale revolution.
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Ken's Summer Project
- Ken Hersh cold-called Richard Rainwater for a summer job at Rainwater Inc.
- Rainwater, impressed by Ken's background, offered him a project analyzing McKinsey's natural gas report.
Simple Economics of Supply and Demand
- Low prices cause drilling to stop, spurring demand while supply decreases.
- This simple economic principle suggests prices must eventually rise.
Finding Value in Neglected Assets
- Focus on smaller, neglected assets overlooked by larger companies.
- Hire skilled managers who can optimize these assets for increased efficiency.