Family Office for Oil Fortune Gets 200% Gain on Uranium Bet - BNN Bloomberg

2022-06-16 05:24:33 By : Ms. Sophia Woo

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(Bloomberg) -- Sean Benson spends much of his time tending to the investment firm for one of the world’s biggest fossil-fuel fortunes. In recent years, he’s also built a major bet on a source of carbon-free energy.

BNF Capital, the family office that Benson helps run for the owners of European oil and gas firm Perenco, invested $30 million to seed a fund he set up targeting allocations to publicly traded companies focused on uranium, the fuel for nuclear reactors.

The Tees River Uranium Fund has since grown to about $220 million, mostly from inflows by family offices and wealthy individuals. It gained roughly 200% through April since its 2019 inception, helped most recently by the war in Ukraine that has pushed countries already seeking to cut carbon emissions to look for alternatives to Russian gas. 

In the US, the Biden administration is said to be pushing lawmakers to support a $4.3 billion plan to buy enriched uranium directly from domestic producers to wean off Russian imports of the fuel. 

“I’ve always been bullish on nuclear power,” Benson, 43, said in a recent interview. “It feels like the world is finally willing to listen to its advantages.”

The bet gives a rare insight into the investment opportunities of family offices, the typically discrete firms for the financial affairs of the world’s ultra-wealthy. They’re increasingly playing a role in global energy markets and, along with hedge funds, helped recently boost the price of uranium as nuclear power becomes more accepted as a way to cut greenhouse-gas emissions.

“This cycle is just getting going,” said Benson, who started working with France’s Perrodo family in 2011 to help establish BNF. 

Founded by the late Hubert Perrodo in 1975 as a maritime-services company, Perenco is now run by his son, Francois. He’s also a shareholder in BNF, which has investments in assets including real estate, private equity and debt. Francois, 45, and his family own Perenco, a company worth about $13.5 billion, according to the Bloomberg Billionaires Index.

BNF also provided $30 million to seed another fund Benson set up last year that focuses on critical resources such as battery metals. It has raised about $100 million, mostly from family offices, and is still open to investors.

The two funds together have holdings in more than two-dozen companies, including US nuclear fuel technology firm Lightbridge Corp. and Perth-based miner Paladin Energy Ltd. They also bought a stake in Canada’s Azarga Uranium Corp., which was acquired in September by EnCore Energy Corp. The Tees River Critical Resources Fund returned 66% to investors last year and is little changed in 2022.

“We’re identifying and putting meaningful investment in technologies in these sectors,” said Benson about the funds, named after the river running through the town of Middlesbrough, England, where he grew up. “They are needed in any net-zero world.”

Benson personally invested in uranium-based businesses from 2005 to 2008. During that time, the metal’s price at one point rose more than 500%, partly due to energy-security fears. He began doing so again through BNF in 2017, before interest from outside investors pushed him to launch the Tees River Uranium Fund two years later. 

That came even as the use of uranium has drawn opposition from environmentalists and other groups due to the radioactive waste it produces, which stays hazardous for 100,000 years. The issue undermines the climate credentials of the technology.

While Benson isn’t focused on trying to shift the Perrodos’ fortune away from oil and gas, BNF is committed to investing in uranium-related holdings for the long term. In November, the family office participated in a £455 million-pound ($570 million) fundraising to help Rolls-Royce Holdings Plc develop small modular nuclear reactors.

The aim “is not to diversify,” Benson said. “But there’s a nice offsetting element to it.”

(Adds details of fund investments in 10th paragraph)

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