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Private Equity's Great Escape - by David Dayen and Maureen Tkacik
For 14 years, the Abu Dhabi Investment Council (ADIC) remained silent about John Raymond’s woefully underperforming Houston private equity firm Energy & Minerals Group (EMG). The $330 billion sovereign wealth fund’s leadership made no public pronouncements when Raymond, son of the iconic Exxon chief executive who masterminded the merger with Mobil, agreed to invest some $3 billion in the new venture of extravagant fracking mogul Aubrey McClendon, who’d just been forced out of the company he’d founded for looting corporate coffers, including siphoning $12 million for a personal collection of rare maps. They raised no alarm bells when McClendon and his new company American Energy Partners were sued a few years later for stealing trade secrets, or when the next year he was indicted for orchestrating a vast bid-rigging conspiracy, or when following his spectacular death the day after the indictment by driving 75 miles per hour into an overpass wall, EMG’s investments were themselves set ablaze. And they said nothing as EMG hired top-shelf bankruptcy lawyers to put other chunks of McClendon’s fracking empire—White Star Petroleum, Sable Permian Resources—into Chapter 11, wiping out so much investor cash Raymond lost most of his fees with it.
But last October 23, Raymond’s firm sent ADIC and other members of an investor advisory board a cursory “announcement” that would break the proverbial camel’s back. The good news was that EMG had found a buyer for Ascent Resources Group, the natural gas supplier formed from the wreckage of McClendon’s fracking empire. The bad news was that the buyer was … EMG. Specifically, the firm had set up a “continuation fund,” an increasingly common tactic to transfer portfolio companies into new vehicles and restart the clock on what is traditionally a short-term investment. EMG offered to buy Ascent from itself for $5.5 billion; existing investors could either cash out or roll their money into the new fund.
The advisory board had to approve the deal before it was presented to all investors. EMG called a board vote for October 30, just five business days after the announcement, and for reasons unspecified claimed it could not be delayed. When members asked what the urgency was about, or why EMG could not simply put Ascent up for sale, they were met with a Thatcherian response: “There was no feasible alternative path to liquidity.” Ascent had no viable buyers, and an initial public offering was deemed “inactionable.” This was reinforced in a follow-up presentation by a third-party adviser known as a “fairness opinion,” and a FAQ delivered just hours before the vote. The company was underperforming compared to its peers, EMG claimed, justifying an exit price that would have hit investors with a loss.
Yet the pessimism didn’t make sense, given that EMG was proposing to invest more of its own capital into Ascent. And why was EMG warning advisory board members not to discuss the situation with one another? “We are the only ones that truly have the facts and all relevant and accurate information,” one email from EMG to board members read.
At the October 30 virtual meeting, EMG gave the advisory board just 20 minutes for questions and then called a vote. Only three of the 43 members agreed to approve the continuation fund, with ADIC and the rest demanding more time to consider the facts. One board member requested an internal discussion without EMG in the Zoom room; EMG incredulously said that would be “technologically impossible,” because it couldn’t transfer the meeting host to someone else.
But last October 23, Raymond’s firm sent ADIC and other members of an investor advisory board a cursory “announcement” that would break the proverbial camel’s back. The good news was that EMG had found a buyer for Ascent Resources Group, the natural gas supplier formed from the wreckage of McClendon’s fracking empire. The bad news was that the buyer was … EMG. Specifically, the firm had set up a “continuation fund,” an increasingly common tactic to transfer portfolio companies into new vehicles and restart the clock on what is traditionally a short-term investment. EMG offered to buy Ascent from itself for $5.5 billion; existing investors could either cash out or roll their money into the new fund.
The advisory board had to approve the deal before it was presented to all investors. EMG called a board vote for October 30, just five business days after the announcement, and for reasons unspecified claimed it could not be delayed. When members asked what the urgency was about, or why EMG could not simply put Ascent up for sale, they were met with a Thatcherian response: “There was no feasible alternative path to liquidity.” Ascent had no viable buyers, and an initial public offering was deemed “inactionable.” This was reinforced in a follow-up presentation by a third-party adviser known as a “fairness opinion,” and a FAQ delivered just hours before the vote. The company was underperforming compared to its peers, EMG claimed, justifying an exit price that would have hit investors with a loss.
Yet the pessimism didn’t make sense, given that EMG was proposing to invest more of its own capital into Ascent. And why was EMG warning advisory board members not to discuss the situation with one another? “We are the only ones that truly have the facts and all relevant and accurate information,” one email from EMG to board members read.
At the October 30 virtual meeting, EMG gave the advisory board just 20 minutes for questions and then called a vote. Only three of the 43 members agreed to approve the continuation fund, with ADIC and the rest demanding more time to consider the facts. One board member requested an internal discussion without EMG in the Zoom room; EMG incredulously said that would be “technologically impossible,” because it couldn’t transfer the meeting host to someone else.
https://prospect.org/2026/03/31/apr-2026-magazine-private-equitys-great-escape-continuation-funds-rollup-retirement-abu-dhabi-investment-council-energy-mineral-group/]
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