EIF powers to $1.7bn for fourth fund

The energy and power firm has closed its fourth US power fund, picking up commitments from pensions, insurance companies, endowments, family offices and foundations.

Energy Investors Funds has closed EIF United States Power Fund IV on more than $1.7 billion, its largest fund to date, the firm said in a statement.

The fund received commitments from a variety of domestic and international partners, having raised around $1 billion as of last autumn. Limited partners include public and corporate pensions, insurance companies, endowments, family offices and foundations, according to a statement. Atlantic-Pacific Capital worked as the global placement agent and advisor for the fund.

EIF did not respond to a request for comment.

Limited partners have been attracted to the fund’s “significant current yield component”, a source told Private Equity International in a prior interview. The current yield helps investors build a hedge against inflation, the source said.

EIF

The fund, the firm’s eighth overall, will continue EIF’s strategy of investing in US power and energy assets, as well as the development of new projects including natural gas, coal and renewable energy facilities, according to the statement.

EIF typically invests in power plants that have power purchase agreements with utilities to generate power at a fixed price. After securing a fixed contract, the power plant will be compensated whether it produces power or not, the source said.

The firm has already invested approximately $350 million of the fund, including a stake in EIF Renewable Energy Holdings, which pursues landfill gas-to-energy opportunities, according to the firm’s website.

EIF’s fourth power fund was one of several billion dollar energy funds on the market this year. Others include Denham Capital, which is targeting $2.5 billion; ArcLight Energy Partners, targeting $2 billion and reportedly Riverstone Holdings is coming to market with a $6 billion fund, the first vehicle it would be raising without being partnered with The Carlyle Group.

EIF’s previous fund, US Power Fund III, closed on $1.35 billion in 2007. As of 31 March, the third power fund was generating a 0.99x return multiple and -0.6 percent internal rate of return, according to New York City Police Pension Fund documents.

The firm was founded in 1987 and has raised more than $4 billion across eight funds since inception.