Daniel J. Rice III, who spent about seven years managing energy assets for BlackRock Inc., became a billionaire in January after Rice Energy Inc. sold shares in an initial public offering.
Rice Energy, the natural gas company he founded in 2007, produces about 161 million cubic feet of natural gas a day from its wells in southwestern Pennsylvania and southeastern Ohio. The 62-year-old owns about 42.7 million shares of the company directly and through two entities, Rice Partners and Rice Holdings. The company has risen 14 percent since the offering, valuing his stake at $1.02 billion, according to the Bloomberg Billionaires Index.
The former BlackRock fund manager controls a portion of the shares with two sons, Rice Energy Chief Executive Officer Daniel Rice IV, 33, and Chief Operating Officer Toby Rice, 31, according to filings with the U.S. Securities and Exchange Commission. A third son, Derek Rice, 28, is vice president of exploration and geology.
“Rice helped his sons set up this new company for drilling in the northeast,” Jim Willis, editor of trade publication Marcellus Drilling News, said by phone from his office in Binghamton, New York. “They are doing very good work and going about it the right way.”
William E. Jordan, Rice Energy’s general counsel and corporate secretary, confirmed the Rice family’s stake in a phone interview. Rice, who lives in the Boston area, has never appeared on an international wealth ranking, and didn’t respond to e-mail and phone requests seeking comment.
Undervalued Companies
The billionaire in 1990 began managing the Energy & Resources Portfolio for State Street Research & Management Co., which BlackRock acquired in 2005. He relied on energy-price forecasts to find undervalued companies, a process that delivered peer-besting returns and above-average risk, according to a June 2012 report by Morningstar Inc. analyst Rob Wherry.
In the decade ended Dec. 31, 2010, Rice beat 99.9 percent of all U.S. stock-fund managers, according to data compiled by Bloomberg. He lagged behind 99 percent of his peers in his final six months at the helm.
Rice founded the Canonsburg, Pennsylvania-based shale gas producer in 2007, when he was managing more than $1 billion for BlackRock funds and institutional clients. He retired from the world’s largest money manager five years later to avoid the appearance of a conflict of interest, according to a June 2012 statement by BlackRock spokeswoman Bobbie Collins. Rice Energy at the time had a subsidiary that had a joint venture with one of his mutual fund’s top holdings, Alpha Natural Resources Inc.
Fracking, Drilling