AI Capital launches energy fund

The Japanese fund of funds will tap domestic institutional investors for the $300m vehicle, which will invest in North American energy-focused funds.

Alternative Investment Capital, a Japanese fund of funds, has launched an energy-focused fund to invest in North America’s energy sector, according to a company statement. The fund will be the first to raise capital from Japanese LPs to invest specifically in the sector, the firm said. 

Torrey Cove Capital Partners will work as an investment advisor to the firm. 

The Energy Opportunity Fund is targeting $300 million or more, but has already secured commitments from Mitsubishi Corporation, Japan Bank for International Cooperation and Shinkin Central Bank before its first closing, although the amount each firm committed was not disclosed. 

The firm is estimating a final close in September 2014, according to the statement. 

Technological innovation in North America has spurred expansion in the development and production of new natural resources and energy such as shale gas and shale oil. Demand for investment in new natural resources and energy field is expected to continue increasing in the years ahead.

AIC statement

“Technological innovation in North America has spurred expansion in the development and production of new natural resources and energy such as shale gas and shale oil. Demand for investment in new natural resources and energy field is expected to continue increasing in the years ahead,” the firm said in the statement.

Other Asian investors have also been taking advantage of the energy sector opportunities in North America.

Singaporean sovereign wealth fund, Temasek, sold its stake in Houston-based Cheniere Energy in August, having invested $468 million in the business alongside Hong Kong-based private equity firm RRJ Capital in 2012, media reports said earlier. 

Fellow Singaporean SWF the Government of Singapore Investment Corporation and the China Investment Corporation also invested in Cheniere in 2012, each injecting $500 million of capital in the business. 

The Cheniere deal marked the fourth joint investment that Temasek and RRJ made together since RRJ’s inception in February 2011. 

The two firms invested together in NASDAQ-listed Clean Energy Fuels and Texas-based oil exploratory company Frac Tech Services in 2011. In April 2012, they again teamed up to invest around $600 million in Kunlun Energy, PetroChina’s downstream natural gas unit, Private Equity International reported earlier. 

Alternative Investment Capital, Japan's first fund of funds, was established in October 2002 as a joint venture between Mitsubishi Corporation and Daido Life Insurance Company. As of 2013, the firm has approximately $6.5 billion in assets under management, according to PEI's Research & Analytics division.