CD Capital, a London-based natural resources investor, has closed its second fund on its hard cap of $255 million.
The vehicle, which had raised its cap following what the firm described as “strong investor demand”, had an original target of $235 million. Its LP base includes a diverse range of institutional investors: 50 percent are endowments, 30 percent are foundations and 20 percent are family offices and funds of funds.
The fund is more than twice the size of its predecessor, a 2006 vintage that closed on $100 million. “We are delighted to have received such strong support from investors,” Carmel Daniele, founder and CEO of CD Capital, said in a statement.
The firm was founded in 2006, at a time when booming commodity prices were driving strong investor appetite in emerging markets endowed with vast natural resources. While the pendulum seems to have swung away from commodities since then – a number of industry insiders told Private Equity International that declining prices could even lead to a sustained phase of consolidation in the industry – CD Capital remains optimistic about the sector’s outlook.
“Many opportunities now exist to invest at attractive entry prices into world-class natural resources assets that will benefit from the long-term global demand growth and limited supply in the natural resource sector,” Daniele said.
CD Capital focuses on growth equity financing in the mining and energy business, by buying into companies that are in the early stages of defining their natural resources potential and find it difficult to raise funds through conventional channels. Although it doesn’t have an explicit commodity and geographic specialisation, the firm claims to have a particular interest in Latin America, a region it sees as under-explored and less subject to geopolitical risk.
It is understood that previous investments by the firm have included several ventures led by Gordon Toll, a mining executive who rose to prominence during his tenure as chairman of iron ore producer Fortescue.
CD Capital was not available to comment at press time.
The firm’s fundraise comes at a time when a number of large buyout firms are moving in the energy territory. The Carlyle Group announced plans to form its first-ever energy team at the beginning of the month, amid expectations that it will raise a $1.5 billion energy-dedicated vehicle in the near future. The Blackstone Group also raised $2.5 billion for its first fund dedicated to the sector last year, whilst Kohlberg Kravis Roberts is reportedly seeking $1.5 billion in commitments for a similar vehicle.