Apollo Natural Resources bags $75m commitment

The buyout giant’s debut natural resources fund will target sub-$150m investments in the energy, natural resources and mining sectors and will share deals with Apollo’s $14.9bn seventh fund.

The Teachers’ Retirement System of Louisiana committed $75 million to Apollo Global Management’s debut natural resources fund at its board of trustees meeting earlier this week, according to a pension spokesperson.

Apollo Natural Resources Partners is targeting investments of less than $150 million in the natural resources, energy, mining and agriculture sectors. Deals made through the fund may also include equity from the firm’s most recent buyout fund, Apollo Investment Fund VII, which raised $14.9 billion in 2008.  The seventh fund was generating a net internal rate of return of 33.3 percent and 1.7x return multiple as of 31 March, according to the California Public Employees’ Retirement System.

The natural resources fund’s investment committee includes senior managing director Josh Harris, private equity lead partner Scott Kleinman, as well as senior partner Greg Beard and partner Sam Oh. The fund, which appears to have launched earlier this year, had raised at least $256 million as of 1 September, according to documents filed with the US Securities and Exchange Commission. A fund target is not stated on either of its SEC filings.

In addition to its commitment to Apollo, the $12.2 billion pension also agreed to co-invest in portfolio companies belonging to EnCap Investments. TRSL declined to disclose what companies were bundled in the $12.5 million co-investment, only that they constituted a subset of companies held through EnCap Energy Capital Fund VIII.

TRSL committed $50 million to EnCap’s eighth fund in January, shortly before the firm closed on $3.5 billion for growth capital investments focusing primarily on the upstream sector of the oil and gas industry in North America.

It has been an active year for energy sector fundraising, with several firms either closing or marketing mega-funds geared toward the sector. Last week, ArcLight Capital Partners and Energy Investors Funds closed on billion dollar energy funds. Other firms in the market include Denham Capital, which is targeting $2.5 billion and reportedly Riverstone Holdings, which is coming to market with a $6 billion fund, the first vehicle it would be raising without being partnered with The Carlyle Group.

At its September board meeting, TRSL committed $75 million to Blackstone Energy Partners, which is targeting between $2 billion and $3 billion for a broad mandate of energy investment strategies, including power, alternative energies and natural resources.

The retirement system also made commitments to Kohlberg Investors VII and Oak Hill Advisors’ OHA European Strategic Credit Fund at the September meeting. As of 31 August, TRSL has a 13 percent private equity allocation to on a 10 percent target.