William (Billy) Bailey’s persistence paid off when the finance major graduated from the University of Alabama into the rocky job market of 2009—but it took time. Seeking a position in the area of investment management, he interviewed with T. Boone Pickens’ BP Capital LLC in Dallas, which operates energy commodity and equity funds in addition to managing Pickens’ private-equity investments. He met with Pickens, the legendary founder of Mesa Petroleum, and BP’s 10-member investment team, but there were no positions available at the time.
But Bailey stayed in touch with the team members and with Pickens, attending the latter’s speaking engagements and reintroducing himself at every opportunity. At the reopening of Dallas’ downtown YMCA, named for Pickens, Bailey reiterated his interest in a job. Pickens told him to come in the next Monday to talk. Once again, there were no jobs open, but in December 2009 he began a three-month internship with the firm that eventually led to a full-time position.
“It’s been an incredible experience having the opportunity to learn from the brightest in the industry,” Bailey says.
Today Bailey works in an energy analyst role, doing research for the different funds and focusing on the Marcellus shale minerals position BP Capital holds in the Appalachian Basin.
While his family didn’t have ties to oil and gas, Bailey grew up in Dallas appreciating the industry’s impact and he committed to a career in energy early on. “The jobs are within energy,” he says. “Today there is an incredible opportunity for young people to get into the field.”
In a recent interview, Bailey discussed his work at BP Capital and industry trends.
Investor What makes BP Capital unique?
Bailey Mr. Pickens is always open to meeting with young men and women. Age is just a number to him. He runs the office like a basketball team, and he is the first in and the last to leave.
Investor What surprised you about working with him?
Bailey His passion for success. I’m willing to bet you will not find another 84-year-old who works harder than Mr. Pickens. His drive for winning is contagious whether it is in business, sports or politics. It’s incredible when you dial in on his many accomplishments, which range from striving for American energy independence to over $1 billion in philanthropic contributions.
Investor What are you most involved with on the job?
Bailey I spend about 80% of my time on the public market investments and about 20% on the private side. On the commodity fund I’m constantly tracking geopolitical risks and trends that play a vital role in shaping prices. I am on the road frequently, gathering information about potential or existing positions we might hold within the equity fund. We have a great business model where we leverage our knowledge garnered from the private side to help formulate fundamental positions on the public-equity side. On the private side I spend most of my time helping to manage the Appalachian Basin minerals package.
Investor When do you look for a turnaround for natural gas?
Bailey Our fund is one of the more bullish on long-term natural gas of any. We see natural gas as an incredible opportunity for America. With the Pick-ens Plan, the target is to replace the 4 million barrels of oil per day the U.S. imports from OPEC countries. We need more demand, and a large piece could come from transportation.
The private sector is building out the U.S. natural gas fueling infrastructure at a rapid pace. Even if natural gas prices were to rise, natural gas would still be much cheaper on a comparative basis than diesel. It would take a huge rise in price to be equivalent.
Investor How have your funds’ investment strategies changed in response to commodity prices in the past year?
Bailey Similar to the past two years, investor sentiment turned negative in May due to the ongoing European crisis. From a commodity perspective I think that natural gas will trade down into the summer but will finish the year closer to $3 than it will $2. This scenario will create an opportunity to buy some extremely cheap natural gas equities.
On oil I think the sell-off was temporary; when you look at the global picture the fundamentals are still tight. Saudi Arabia needs $100 Brent; it is spending hundreds of billions of dollars to satisfy the Shiites in the eastern provinces.
You want to own the companies that have the premier position within their respected basin, like Pioneer Natural Resources in the Permian Basin.
Investor Is the firm considering raising more money?
Bailey Members of the investment team are looking into raising a private-equity fund. The firm’s deal flow is better than anyone else in the marketplace, we think, and that’s what we’d like to leverage.
Investor What are your longer-term goals?
Bailey Obviously I love working at BP Capital. Further out, I have aspirations to own or run a fund or own an E&P company. The E&P side of the energy business is the most appealing to me, because there is so much potential in the U.S. and internationally.
—Susan Klann
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