Denham to hold first close on $1.8bn

The Boston-based energy investor is scheduled to hold an initial close later this month, and is on track to end fundraising on its sixth investment vehicle in the first quarter.

Denham Capital is set to hold a first close on about $1.8 billion on its sixth energy-and commodities-focused fund, targeting $2.5 billion, according to a person with knowledge of the fundraising.

Boston-based Denham could not be reached for comment. Park Hill Group is working as placement agent for the fundraising.

A first close is scheduled for 25 October. The fund, which launched in July, is on track to hit its target and hold a final close in the first quarter, the person said. Denham Commodity Partners VI has been getting a good response from existing limited partners and has added some new LPs, who are attracted to the potential for non-US energy-related exposure, as well as the mining focus of the firm, the person said.

The firm has been working to expand its LP base, targeting public and corporate pensions and LPs outside the US, a market source told Private Equity International in a prior interview.

In August, the Massachusetts Pension Reserves Investment Management Board committed up to $100 million to the fund. In 2009, MassPRIM bought an LP interest in Denham’s fifth fund from Harvard for $150 million.

Denham raised $2 billion for its fifth fund, which closed in 2008. The firm targets investments in oil and gas, mining, timber and power industries, as well as carbon assets and energy-related infrastructure.

Denham was formed in 2004 as former hedge fund Sowood Capital’s in-house private equity energy unit and has found support from the likes of Harvard Management Company and Cascade Investment, Bill Gates’ private investment fund.