Investors buy into Lime Rock’s second

The firm has closed its second energy-sector dedicated fund quickly and way above target as the buyside gravitates towards more specialised funds.

Specialist private equity firm Lime Rock Partners, which focuses on the energy sector, has announced the final close of its second fund at $320m.

Lime Rock Partners II was launched in late 2001 and had an original target total of $200m. The close way above this target is further evidence that specialist funds with demonstrable track records are increasingly attractive to investors looking for niche expertise that can deliver better than average returns. In particular, the energy sector is regarded as being ripe with consolidation and buy-and-build opportunities.

'We are pleased with the results of this fund raising, which indicates that there is a growing recognition that the energy sector is a part of the economy where returns are suitable for private equity investors and are achievable with the right strategy,' said John Reynolds, Managing Director of Lime Rock.

Placement agent Monument Group helped raise the new fund, which is made up of over 40 institutional investors, including leading endowments, foundations, and pension funds. Lime Rock's first fund closed at $105m in October 1998.

Lime Rock, based in Westport in Connecticut, has offices in the major energy centers of North America and Western Europe, and the new fund will target companies in the oil and gas service, transportation, and production throughout these regions. The firm was founded in 1998 and has made investments in twelve portfolio companies since then, including Roxar ASA, Deer Creek
and SmartSynch, Inc.

Only last month, Russian private bank Alfa Bank announced a partnership with Russian energy investment group Vostok Nafta Investment to launch a private equity fund targeting consolidation opportunities in the oil and natural resources sectors in Russia and neighbouring countries. The fund is targeting a final close of $200m. Warburg Pincus invested $100m in Insight Energy, an investment fund targeting power assets in the US and Europe, while 3i has agreed to commit £30m to oil and gas investments in and around the UK.