HitecVision closes $800m energy fund

The Norwegian firm, led by Ole Ertvaag, completed fundraising in three months, capitalising on the interest in the booming oil and gas sector to more than double its fund size.

HitecVision has closed its fifth fund on $800 million (€527 million) exceeding its $600 million target, according to the firm’s spokeswoman.

The fund, led by chief executive Ole Ertvaag, was oversubscribed three months after fundraising was launched in November.

The firm’s Nkr690 million ($132.8 million; €87.3 million) third fund from 2002 has made an eight times return on realised investments with an internal rate of return of 279 percent on these investments. The entire fund’s realised and unrealised investments are estimated at a 236 percent internal rate of return.

Ole Ertvaag:
8x from 
third fund
realisations

The largest investor in its latest fund is Norwegian fund of funds Argentum which made a $77.5 million commitment, the biggest investment it has ever made.

Other investors include US bank Goldman Sachs, US fund of funds Adams Street Partners, European fund of funds Access Capital Partners, Danish pension fund ATP Private Equity Partners and Swiss fund of funds Partners Group.

The firm held its first close in December on $500 million but had to scale back what was allotted to investors in the close because of the demand.

More than 50 percent of committed capital came from investors outside of Norway.

The firm‘s team and associated entities invested $40 million in the fund. The spokeswoman said: “We have traditionally invested more ourselves than the general two percent and it is viewed positively by investors that we put a significant amount in ourselves.”

The firm closed its last fund in July 2006 on $300 million and it was fully invested by September 2007 with remaining capital kept aside for add-on investments.

The last year has seen numerous private equity firms’ fundraising in the oil and gas sector.

Riverstone Holdings, which recruited former BP chief executive Lord Browne of Madingley last year, is targeting a total of $10 billion for its latest vehicles. This included a $6 billion global energy and power fund and a $4 billion renewables fund.

Other firms with energy funds in the market include ABN Amro, Natural Gas Partners, Swicorp, EnCap Investments and Tenaska.

MVision Private Equity Advisers was global placement agent and Bugge, Arentz-Hansen & Rasmussen was legal counsel to the fund.