Ask Wilmington-based financier Karl Miller what investment opportunities have the greatest potential at present, and he’ll tell you his money is on energy. Miller says industries associated with energy production are where new jobs will be found, and his latest equity fund venture, NEAH Energy (Newco Energy Acquisition Holdings LLC), is dedicated to acquiring energy assets and infrastructure being sold at discount prices and equipping them with effective management.

According to Miller, the current economic environment has caused revenue growth to stall in the natural gas, power generation and renewable energy industries, and many companies are selling their assets to pay off debts. He and his partners formed NEAH this past fall to invest in distressed or “orphan” assets, such as power plants and pipelines. They are opening the fund’s office in Wilmington, the home base of Miller and principals Scott Beattie and Scott Relan.

According to Relan, NEAH is raising several million dollars in initial bridge capital, with larger deals expected in the future. Raising capital will be an ongoing task, he said, adding that NEAH has two investments in its sights: one company has signed a memorandum with the equity fund, and another possible acquisition is under consideration.

The investment group is always looking for qualified investors, mainly large-cap private equity firms and hedge funds. The fund’s goal is to continue to generate “above-market returns in a good, solid five-year investment cycle,” Miller said.

Earlier this month, NEAH announced that it had executed a letter of intent with a leading water technology company to establish a new water treatment and processing company. The name of the water technology company was not disclosed.

According to the NEAH announcement, the proposed company would focus exclusively on helping the global oil and natural gas industry develop new revenue and profit opportunities through technology developments and market demand for industrial on-site water treatment, processing, and purification.

Miller has a 20-year career in finance and energy, spending the last 10 years in the private market. During his career, he has built, restructured and managed energy businesses for energy companies on several continents, including PG&E Corp., Electricité de France, El Paso Energy, Enron Corporation and JPMorgan Chase.

As he saw the formerly booming energy industry stall along with the rest of the economy, Miller realized there was an opportunity to make strategic investments and put people to work.

“We buy the assets, set up operating companies and staff the companies,” Miller explained recently. “We are a combination of source and operators. We provide management teams. We run our own assets and transactions.”

In addition to targeting power plants, the fund also focuses on service businesses related to energy production such as water treatment services needed for gas companies. In fact, the company is soon expected to announce a new partnership with a water technology company to provide on-site water treatment and purification for oil and gas industry.
 
“We’re developing long-term contracts with gas companies to provide water filtration service at the sites,” he said. “There are not enough treatment centers for all the new oil and gas wells.”

America will be looking at these service industries for the higher-paying jobs, Miller said.

“The energy industry will be the focal point for this election and the follow-up elections for the next four or five years. That’s where the big jobs are going to be.”

Miller is continuing to meet with local, state and national government leaders to talk about the importance of the energy industry to job creation.

But NEAH is not focused on U.S.-based companies alone. It plans to purchase assets in Europe, where a number of renewable energy products have lost their subsidies and are failing.
“The solar market is collapsing, and the numbers aren’t working out for wind turbine producers,” Miller explained.

NEAH Energy has advisors in Moscow and England, and Miller himself spent much of his career in France, where he maintains contacts in the industry.

"The management, directors and principals of NEAH have extensive domestic and international experience and relationships,” Miller said. “NEAH is ‘agnostic’ to the origin of capital contributions and investments, as long as [the investors] accept NEAH’s terms and conditions and investment horizon. Target investors are broad based, including private equity, hedge funds, family trust offices, and other high net worth individuals."

In addition to Miller, NEAH’s senior advisors include Pat Markey, recent chief operating officer of Global Coal Limited in Singapore; Jolly Hayden, vice-president of electric business development at Hunt Consolidated Inc.; Keith Blakely, an entrepreneur who founded Advanced Refractory Technologies; Robert Samuels, co-founder and managing partner of the Provident Group; Richard Harper, a senior energy manager and global consultant based in London, and Michael O'Flynn, the global head of business development for UFG Asset Management.