Jennie Simmons and Sam Veselka, managing director at Pelican Energy Partners, cover some of the takeaways from Troutman's recently authored report on PE trends and U.S. energy.
This episode of PE Pathways features a discussion between Troutman Pepper Locke Partner Jennie Simmons and Sam Veselka, managing director at Pelican Energy Partners. Troutman recently authored a report on PE trends and U.S. energy, with contributions from Jennie and Sam. Their conversation covers some of the takeaways from the report and nuclear energy industry trends in general.
Information presented in this podcast is for informational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities.
Nothing on this podcast should be interpreted to state or imply that past performance is an indication of future performance. All investments involve risk and are not guaranteed. Pelican Energy Partners is a Registered Investment Advisor with the U.S. Securities & Exchange Commission.
PE Pathways — Going Nuclear – Private Equity Trends in US Energy
Speakers: Jennie Simmons and Sam Veselka
Recorded: August 7, 2025
Aired: October 2, 2025
Jennie Simmons:
Welcome to PE Pathways, our podcast series where experienced deal makers shared their thoughts on current private equity and M&A trends and developments. My name is Jennie Simmons. I'm a partner in the corporate private equity and energy practices of Troutman.
Recently, Troutman Pepper Locke authored a new report on PE trends and U.S. energy, and I was a contributor to this report. Today, we are going to cover some of the takeaways from the report and cover a few trends in detail. I am very happy to be joined today by my good friend, Sam Veselka. Sam is a managing director at Pelican Energy Partners based here in Houston, and also participated in the report. Sam, so happy to have you here and thank you for your time.
Sam Veselka:
Great to see you. Happy to be here.
Jennie Simmons:
Sam, why don't you give our listeners a little bit of background on yourself and then also, on Pelican Energy?
Sam Veselka:
No problem. Yeah, Sam Veselka, Managing Director at Pelican Energy Partners. I joined about seven years ago. Pelican was originally an oil field service-focused private equity group. We've raised four funds now, close to a billion under management across those four funds. The first three were specifically focused around oil field services, and we just recently raised a 450 million dollar fund focused on nuclear energy services.
Before Pelican, I had six years of operations experience at Cameron and Schlumberger. Before business school, I had three years working in a very small manufacturing business, which really allowed me to fall in love with working with small companies competing in a much bigger marketplace. Glad to be here.
Jennie Simmons:
That's great. Well, Sam, and I know you and I have known each other literally since birth, so our careers have generally followed the same trajectory. I remember working for Pelican when I was a first-year associate. It's been a long history with the firm.
Sam Veselka:
Yeah, that was actually before my time at Pelican. I’m glad we were able to cross paths again.
Jennie Simmons:
Agreed. Coming back to the report that you and I both participated in, the report identified five PE investment trends that we're currently seeing in the U.S. energy industry. They are: data center growth requires many sources, using gas to beat coal internationally, Trump boosting investor interest in the oil industry, solar and storage solar wind struggles, and then nuclear maintenance attracting niche investors, which, of course, is a particular importance to Pelican. Any one of these trends, I think, could be their own podcast. But today, I wanted to take advantage of you being here, particularly given Pelican's history and Pelican's experience in the nuclear, and talk primarily about, again, investor interest historically in the oil industry, as well as present interest, and then also, like I said, talking about nuclear.
Then, because we can't not talk about it, it is a double negative, we'll also talk about data centers, because that's a huge trend that everyone's seeing across industry specialties. We can also hit the other trends briefly. Using Pelican's experience, can you maybe tell us what you've seen over the years? I know, for example, you mentioned that Pelican was historically focused on oil field services. What changed? Why were the first three funds based on OFS and then switched to nuclear?
Sam Veselka:
Pelican was founded on the concept of being a great investor, means you have to specialize. In order to beat market returns, you need to focus on one very specific sector, dive deep, find the winners, and be able to work with them and grow them, rather than being more of a generalist. At the time, when Pelican was founded in 2010, oil field services, oil and gas was ramping up extremely aggressively, thanks to fracking in the United States. It was a ripe time for investors and for GPs like ourselves to get into that sector.
Obviously, we witnessed multiple downturns throughout that time period. 2014, we had a crash. We had another crash in 2018, and then really, the final straw that broke the camel's back was COVID in 2020. Throughout that time period, as rigs dropped and frack crews dropped, we were able to still continue to invest in the space and make money for our investors in a declining market, but it gets harder and harder every single day. I think the conclusion from COVID led us to believe that there's two core dynamics that are shifting and therefore, shifting our thought process for investing. One of which is just pure investor sentiment. General interest and investor sentiment in the space dropped significantly, and the ability to try to raise new capital to invest in the space, it was going to get harder and harder. That was number one.
Then number two is the way we put it is we're too good at our jobs. Oil field services are basically putting themselves out of business, because they continue to drive such extreme efficiencies for the operators that we're producing so much more oil and gas today with so fewer rigs and service costs than we had in the past. That is just dead flat to declining market, I mean, no matter how you slice it, if you will. We took a step back and said, okay, what are we good at? Where do we think the opportunities are going forward?
Pelican's unique in our operations background and experience. We have very few investment bankers on the operating team. If you look at our executive team, everybody's worked in an operations role managing a P&L, CEO, CFO, something of that like. We believe that we bring a different skill set to investing and worked very, very well with original founders and entrepreneurs to help them grow their businesses. When we looked at the energy landscape, we looked at everything. Hydrogen, battery, wind, solar, nuclear, just gas, and all sorts of different opportunities. What we found is oil and gas, obviously, as the investor cement issue, and then wind, solar, battery, hydrogen, were all venture capital plays, not pure private equity plays.
When we came across nuclear, there's a very mature market with longstanding companies that just haven't grown or been invested in in a very long time. We see that trend shifting. So, we decided to focus on nuclear energy services.
Jennie Simmons:
It's so interesting. When y'all were doing the evaluation of the different energy industries, how much time did you spend evaluating each particular focus? Like you mentioned, hydrogen and solar and wind.
Sam Veselka:
Yeah. We spent, basically, an entire year during COVID. 2020 was focused on just the portfolio company management, helping the companies go through the downturn and recover. We were purely focused on that. 2021 is when we dove into, okay, what is Pelican in the future? We spent the entire year, we split up the team to take each one of those individual tasks. They would put together a report as to what they like or dislike about the sector and what the opportunity is and then come back and present to the team when they had something put together to put in front of everybody.
We did those throughout the year, different people, different timeframes. It wasn't until 2022 that we really started to understand the scale and scope of the nuclear energy services space, and that there was a real opportunity for us to put money to work in that area and that it fit with our core competencies.
Jennie Simmons:
That makes sense. You mentioned the investor appetite changing. With the new fund that y'all raised, specifically with nuclear, do you have a different investor base than you did in the prior funds, which we're getting more OFS focused?
Sam Veselka:
Yes, we do, but that's more of a nature of those investors still have their money and fund two and fund three for us. We had to go look for new investors, just because of the capital cycle of not having return the money from fund two. More than half of the investors are new investors for the nuclear fund, but they're not new types of investors. Very similar style and structure of asset managers, university endowments, pension funds, municipal funds, all the same normal folks, almost all here in the U.S. that like the opportunity that we put in front of them.
Nuclear is a very unique situation. There's not an easy way to invest in it. You have utilities, which if you're investing in utilities, you're not investing in nuclear strictly, right? You're just investing in utility and their growth trajectory is pretty stable and flat. You've got uranium, which is actually a pretty small component of the actual cost of nuclear, and then you have tons of venture capital opportunities with all the advanced technologies.
What we brought to market that was so unique was a way to play the general nuclear growth story, but with a traditional two and 20, target 25% return investment path that isn't betting on us building a bunch of new nuclear reactors. The core thesis is there's 94 reactors. It was assumed they were all going to get turned off once they turn 60, or 80-years-old. It's 20% of total electricity for the United States, 50% of non-carbon electricity for the United States. We physically cannot turn them off, or the lights will go out. The thought process is aging infrastructure that has to stay on, you're going to have increased operations and maintenance spend on those assets.
Jennie Simmons:
Sam, the services companies that y'all are focused on in terms of building your platform, are these mostly mom-and-pop nuclear services companies? Or, what are you seeing in terms of the service companies that you're going after?
Sam Veselka:
Yeah, that's exactly right. Most of these companies were founded 30 to 40 years ago, when the original reactors were built and even further back some. Then you had a lack of investment interest in the sector for, again, 30 years. Most of these companies were stable, steady, generating profit, generating cash flow, but not really growing, and nobody was investing in the space to professionalize, grow, consolidate the group at all. What we're looking at is a highly fragmented service sector and industry that needs investment to professionalize and is ripe for a roll-up strategy, which when we actually talk to some of the nuclear power plants, because we went and actually visited a few in Texas to just understand what we're investing in and what we're diving into. It was funny, they were begging us to do the strategy, because they're dependent on these mom-and-pop businesses showing up on time and getting something done. These are plants around 24 hours a day, seven days a week. The opportunity costs when they shut down, or something gets delayed is so extreme that they said, “Look, we'd be happy to pay more for the service if you can guarantee the quality.”
Jennie Simmons:
Interesting. I do want to come back to the five trends that we talked about, at the beginning of this session. What do you see as the big drivers of energy demand growth? I mean, is it data centers? Is it something else?
Sam Veselka:
We did not underwrite data centers as the core rationale for the growth and demand for electricity. There's a clear consensus across the industry that demand is going up, irrelevant to data centers being built. It's a great upside. It's a great benefit. I do think they're going to get built and that they're going to need power. But you just see the digitization of our entire lives, the electrification of every single thing that we're doing. This, again, is not dependent on a bunch of electric vehicles necessarily coming to market. That helps and that's a piece of it, but you can't even get in your house without some kind of electronic these days. We've just digitized everything that we do. That's what's driving the demand growth locally and globally.
Globally, you have a developing world wanting to catch up to the already developed world. We think that will continue to drive power demand in underdeveloped nations and continents, as well that's a part of this driver. That's where we see the increase to demand. The other piece is demand growth has not been growing for 20 years in the United States. Therefore, we have not been investing in additional supply during that entire time period. As you're very well aware, it is not quick, easy or cheap to build a new nuclear reactor, or even a gas power plant, or any supply for electricity.
Today, what's interesting is the number one competition is just putting gas-powered power plants back online. You now have a major hiccup in terms of the availability of large-scale turbines that are delivered by basically, two companies, GE and Siemens. It's easy to say, well, why don't we just turn on natural gas? We're big believers in natural gas. That is a core component to the supply going forward, much cleaner solution than coal, and is readily available in great supply here in the United States. But they've got the same issue. They can't get a hold of turbines, and the price of them are going extremely, are going up aggressively. That's starting to compete with the pricing of new nuclear as well.
Jennie Simmons:
Given that, if you had your crystal ball in front of you, what areas would you see other growth potential opportunities in the future, in the next five years, 10 years? Is it really going to be more nuclear, or is it going to be gas?
Sam Veselka:
We're pretty confident that the wind and solar component has met its height. It will be a part of the solution. It's not something that needs to go away. We see the core growth around LNG driving demand for gas and driving demand for increasing the supply, matching what has readily available production here in the States. We hope the focus there will finally start to ween us off of coal. We want to see that to go away entirely, and then you have new nuclear. I think that's going to be a mix.
There's a lot of SMR companies, small module reactors and micro reactor technologies that are out there. We quantify something like 125 different names trying to do it. You maybe need two or five, but not 125. You're going to see a lot of money invested that doesn't really go anywhere in that sector, but we do think those are going to come to market and commercialize at some point, whether that's five or 10 years. We do believe that you're going to start to see an increase in natural gas power plants going forward, and that being a real driver of power supply.
The next piece of it is in how you deliver it to your customers. The other issue is our aging infrastructure and the transmission and distribution lines associated with getting supply to demand is going to be another core component for growth and investment going forward.
Jennie Simmons:
You mentioned new nuclear. I know there are 94 reactors currently in the United States. Do you envision new reactors being built?
Sam Veselka:
Yes. We actually think it's an interesting battle going on right now. It was assumed you're never going to build a large-scale nuclear reactor again. They're too expensive. They're too slow to put to market. It's going to be the small module reactors, or micro reactors. We don't actually believe that to be the case. The large scale, Westinghouse design, GE designed nuclear reactors that have been proven to run for 40, 60, 80 years are going to have a place in the new build cycle in the future. It's proven technology, proven to be safe. A regulatory environment is developed and structured and set up and ready to go.
Right now, what you're seeing is plants that were decommissioned getting recommissioned and turned back on. That's the cheapest way to add power into the system. The next phase, we believe, is going to be a few large-scale nuclear reactors. When we started this fundraise, there were 92 reactors. Now there's 94, because they did finish the two at Vogtle. There hadn't been one for 20 years, or something along those lines up until those two were built. We think that’s the large scale. Then I think the next piece down the road is the small module reactors finding a way to get through the NRC and the DOE to get approved and built. A lot of those will be built behind the grid and connected directly into a data center, or some type of power demand that's not just basic commercial plugging into the grid, because those will get funded. Some of the first of a kind.
It's challenging to find investors to build a billion-dollar first-of-a-kind small module reactor. If you can sign a purchase agreement, or a PPA with Google, or Meta, or whomever to power their data centers directly and give them 30 years of guaranteed payments, those are going to be the first ones that are built. Then when they drive the cost down through efficiencies of manufacturing, that's when you can potentially start to see SMRs in the commercial market. Jennie, is that five or 50 years from now? I have no idea.
Jennie Simmons:
Well, hopefully, during our lifetime.
Sam Veselka:
Hopefully, during our lifetime. Yes.
Jennie Simmons:
Well, Sam, this has been such an interesting conversation. I always enjoy when you and I talk about trends, either on a podcast, or on the golf course, equally enjoyable. Really, I want to be respectful of your time. Really appreciate you joining us today and giving our audience some of your insights.
Thank you also to our audience for listening today. Please, keep your eyes open for future episodes of PE Pathways, where we bring experienced dealmakers on to share their thoughts on current private equity and M&A trends and developments, just like we did today with Sam Veselka and Pelican Energy Partners.
You can find the latest episodes wherever you get your podcasts. You can also find a link to the energy report that we've referenced with this podcast once we post the episode. Sam, thank you again. Really enjoyed it.
Sam Veselka:
Thank you, Jennie. Appreciate you having me. Good to see you.
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