Fundraising - APRIL 8, 2014

Energy Capital holds $5b final close

by Andrea Waitrovich

Energy Capital Partners holds $5.043 billion final close for its Energy Capital Partners III, exceeding its $3.5 billion target. The final close was announced April 8.

Fund III was launched in July 2013 and raised more than $5 billion in eight months, attracting a diverse base of more than 300 limited partner investors from North America, South America, Europe, Asia and the Middle East.

The fund series invests in U.S. companies or create startup firms in the energy sector.

Fund III has begun investing its capital. It closed on its first investment, the acquisition of NESCO Holdings, a specialty equipment rental company to the electric utility industry. The seller was Platinum, which bought a controlling interest in NESCO in October 2011 from an investor group which included founder Rob Troxel.

The final close follows another oversubscribed close made by its predecessor. Energy Capital Partners II closed in 2010 with $4.34 billion, exceeding its $3.5 billion fundraising goal. Fund II’s portfolio includes an investment in EnergySolutions, a leader in nuclear commercial services, which closed in May 2013. Other assets include three natural gas–fired power generating facilities in New England, a 100-mile gas gathering pipeline system under construction in the Barnett Shale region in Texas, an electric transmission line under development in Southern California, and an operating business providing electrical infrastructure construction and maintenance services.

Energy Capital's total cumulative commitments are now in excess of $13 billion. In addition to Funds II and III, the firm’s Fund I raised $2.25 billion in 2006 and a mezzanine credit lending vehicle raised $805 million in 2013, as well as co-investment capital participating in seven individual Energy Capital investments.

Energy Capital focuses its private equity investments on control situations in the North American energy sector with a concentration in the power generation and the midstream oil and gas sectors. The firm also focuses on related energy and environmental service and equipment businesses that are directly related to these two core areas of asset focus. The mezzanine debt fund focuses on the same energy sectors in providing lending solutions for middle-market energy borrowers in support of their growth initiatives.

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