ArcLight nears $600m for Fund V

The Boston-based energy investor has indicated in a regulatory filing that it has raised that much for its latest fund, which is targeting $2bn in total commitments.

ArcLight Capital Partners has collected nearly $600 million for its fifth energy fund, a regulatory filing by the Boston-based private equity firm shows.

The ArcLight Energy Partners Fund V has secured $596 million in commitments against a $2 billion target, according to a fundraising disclosure filed with the US Securities and Exchange Commission. The firm had indicated in a previous disclosure filed in January that it had raised $383 million for the fund, which has been in the market since 2009.

Fundraising for ArcLight’s fifth fund has been slower than the firm’s previous funds. ArcLight closed its third fund on $2.1 billion in April 2006 and, just 15 months later, collected another $2.1 billion for its fourth fund.

A market source told Infrastructure Investor that fundraising for the fifth fund may be slower because some potential investors are not pleased with what they perceive as a shift in the firm’s investment approach. ArcLight’s first two funds focused on more private equity-like higher-risk, higher-return strategies in the energy sector, according to the source, while funds III and IV focused on more infrastructure-like lower-risk, lower-return strategies.

ArcLight has switched placement agents throughout the fundraising process, taking London-based MVision off the assignment by autumn 2010. The firm disclosed in its latest filing that it is now marketing the fund with the help of Barclays Capital. A spokesperson for ArcLight did not return a request for comment.

Founded in 2001, ArcLight has invested in energy production, generation, transmission and distribution assets, including renewable energy developer Terra-Gen Power. Terra-Gen currently is working on a $360 million refinancing of its corporate debt facility, which is being arranged with the help of Goldman Sachs and Credit Suisse, according to a statement.