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Energy Capital closes $2.25bn debut fund

The Short Hills, New Jersey-based private equity firm run by three ex-Goldman pros has already made its first investment – last month’s $1.34bn power generation deal.

Energy Capital Partners has closed its debut fund, Energy Capital Partners I, at $2.25 billion (€1.7 billion), the designated cap for the fund, Energy Capital said in a statement. The firm’s established target for the fund was $1.5 billion.

The money raised for the fund comes from approximately 150 limited partners, including public and corporate pension funds, college and university endowments, foundations, banks and insurance programs, portfolio managers, family offices and individuals, the statement said. Approximately 25 percent of the commitments are from off-shore investors.

Energy Capital made its first investment with the fund on November 1. In that investment, the firm purchased Northeast Generating Company and the Mount Tom generating station form Northeast Utiltities, a provider of electricity to Connecticut, New Hampshire and western Massachusetts, for $1.34 billion.

Doug Kimmelman: Energy Capital closes debut fund

Based in Short Hills, New Jersey, Energy Capital invests in North American energy infrastructure, including power generation, renewables, electric transmission and midstream gas sectors, the statement said. Doug Kimmelman, Scott Helm and Thomas Lane, all formerly of the global investment bank Goldman Sachs, founded the firm in May of 2005. Kimmelman founded Goldman Sachs’ power investment group and Helm co-founded Goldman Sachs’ Orion Power Holdings. Lane was a senior Goldman Sachs mergers and acquisitions advisor. 

The energy sector has found success in the private equity world, as evidenced by the large closings of other recent energy-specific funds. Greenwich, Connecticut-based energy investment firm First Reserve Corporation closed its eleventh fund, called First Reserve Fund XI, at $7.8 billion, in August. Another recent energy fund was the $1.2 million debut acquisition fund raised by Aspect Energies and Quantum Energy Partners in August.

The Energy Capital fund is also among the largest debut funds ever raised. New York-based Centerbridge Capital Partners closed its debut fund on $3 billion in September. Centerbridge is led by Mark Gallogly, the former head of The Blackstone Group’s private equity programme, and by Jeffrey Aronson, a former distressed securities expert from hedge fund Angelo Gordon.

Similar success was seen in the $2.2 billion debut fund of Menlo Park, California-based Silver Lake Partners in 1999. That fund was raised in a matter of weeks.