Alan Kestenbaum, one of the founders of Bedrock Industries Group LLC, is setting aside US$400M of his personal wealth to establish a fund focused on coal and other industrial assets.
Kestenbaum, who has a long history of deal-making including helping Bedrock purchase the once distressed steel-maker Stelco, is reviving a fund to invest in industrials, mining, and commodities. The targets of this fund are predominantly coal operations which have become less popular during the green energy transition.
Kestenbaum stated, “This is a skill and expertise we have in reaching out to the market, identifying assets, and operating them.” He is resurrecting the Bedrock Industries name for his latest venture, using it for the Miami-based holding company that will handle the deals. This name was part of a collaboration with private equity firm Lindsay Goldberg LLC from 2015 until 2021 when Kestenbaum bought out his partner.
At 62, Kestenbaum is investing his own money for Bedrock Industries Group LLC to chase other deals like Stelco. He mentioned that the firm will be searching for assets in China, Latin America, the Middle East, and India, where growth rates are more than double those of North America, depending on the product.
“We’ll go into coal and other underserved markets,” he said, adding that targets include a broad range of “geographically unconstrained” products including aluminium, copper, alloys, as well as thermal coal and its metallurgical counterpart used in steelmaking.
Coal is still used to generate just over a third of global electricity, even though it is the most carbon-intensive fossil fuel. While coal is being gradually replaced in most countries for power generation, it will continue to play a crucial role in iron and steel production until newer technologies are available.
Global coal demand remained high in 2022 amid the global energy crisis, rising by 4% year-on year to 8.42Bt. Despite this, the IEA expects coal demand to fall in almost all advanced economies. The biggest drops in consumption will occur in the European Union and the US, where record annual declines of around 20% are expected.
Other advanced economies, such as Korea, Canada, Australia, and Japan, are set to see lower rates of decline. Nevertheless, the growth in China (around 5%) and India (over 8%), as well as Indonesia, Vietnam, and the Philippines – which together represent more than 70% of global coal demand – will offset these decreases on a global scale.
Gaurav Mehta, a former banker with UBS Group AG and Deutsche Bank AG, will assume the role of managing director at Bedrock Industries. Kestenbaum also stated that he will provide support with investments and guidance.
