First Reserve explores fund restructuring options

The process is in the early stages and Lazard is expected to sent out non-disclosure agreements this week.

First Reserve, the largest energy-focused global private equity firm, has begun a process to offer liquidity to investors in its 2006-vintage fund and provide new capital for its 2008-vintage vehicle, Secondaries Investor reports

The Greenwich, Connecticut-based firm has hired Lazard to offer limited partners in its $7.8 billion First Reserve Fund XI the option of cashing out or rolling over into an extended fund, according to three sources familiar with the deal.

The aim of the process is to give Fund XI more time to find exits for its assets amid an extended recovery in the energy sector, Secondaries Investor understands.

The process is in the early stages and Lazard is expected to send out non-disclosure agreements this week.

PE Hub first wrote about the restructuring.

LPs in Fund XI will have similar terms if they choose to roll over into the extended five-year vehicle, according to one of the sources.

The fund had a negative 8.4 percent internal rate of return (IRR) and a 0.7 x return multiple as of 30 September, according to a performance document from the Oregon Public Employees Retirement Fund, which committed $300 million

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