Denham Capital is on track to close its sixth energy and commodities-focused fund, targeting $2.5 billion, in the first quarter, according to two people with knowledge of the situation.
Denham declined to comment. Park Hill Group is working as the placement agent for the fundraising.
The firm, which spun out of former hedge fund Sowood Capital in 2007, held a first close on the fund in late October and has collected $1.7 billion. The fund is already “over-subscribed”, according to one of the people with knowledge of the process. The next close on Fund VI is scheduled for February, which could be the final close, according to one person.
One potential Denham limited partner told Private Equity International “they have a really strong team” and “they’ve got a lot of the blue chip” LPs. Investors have been attracted to the firm’s flexibility to invest in traditional oil and gas, but also focus on power generation, alternative energy and commodities like metals and mining extraction, among other strategies – all while operating on an international basis.
“They’re not pigeon-holed into just doing oil and gas in the US,” the potential LP said.
Denham has worked during this fundraising to expand its base of LPs, giving access to potential investors that may not have had the opportunity to invest in the fund in the past. The firm raised $2 billion for its fifth fund, which closed in 2008.
The firm is run by a management team that includes Stuart Porter, founder, chairman and chief executive officer, who spent several years prior to Denham as a vice president and portfolio manager at Harvard Management Company, where he focused on public and private transactions in the energy and commodities sectors.
Other members of the management team include Carl Tricoli, founder, managing partner and co-president, who once worked as a vice president for Enron’s North American business; Scott Mackin, managing partner and co-president, former CEO and president of Waypoint Energy; Riaz Siddiqi, founder, managing partner and head of Asia, who was formerly president and CEO of Capstone Global Energy, and William Zartler, founder and managing partner, who prior to Denham founded Solaris Energy Services.