Pelican Energy beats target to close second fund on $210m

Pelican Energy’s latest offering was oversubscribed, signaling strong LP appetite for a fund investing in energy services and equipment companies even as oil prices plummeted below $30 a barrel earlier this year.

Houston-based private equity firm Pelican Energy Partners has closed its second fund on $210 million after four months of marketing, the firm said.

Pelican Energy Partners II, which launched earlier this year with a $150 million target and an initial hard cap of $200 million, was oversubscribed, founder and managing partner Mike Scott told Private Equity International. By late May the fund had its first close on $181 million, and the hard cap was increased to $225 million to accommodate investor demand. The fund will focus on buyout and growth investments in energy services and equipment companies based in North America.

“We stopped marketing at the time of the first close, and with the folks already in process at that time, ended up at $210 million in a final close on the first day of July,” Scott said.

Pelican Energy has been raising its latest fund at a bearish time for oil prices: Brent crude plunged to $27, a 12-year low, in the first quarter of this year, and traded at around $47 on Tuesday, according to Reuters data. That’s in contrast to 2012, “near the peak of the last cycle” as Scott puts it, when Pelican Energy was raising its first fund, and Brent crude averaged $111.67, according to data from the US Energy Information Administration. Pelican Energy’s first fund raised $120 million, and like the second fund it also surpassed its target, which was $100 million.

Pelican Energy hired Champlain Advisors as the placement agent for its latest fund. The firm typically targets US- or Canada-based companies with earnings before interest, tax, depreciation, and amortisation of between $1 and $10 million.

The second fund has 47 investors, a 15 July filing with the US Securities and Exchange Commission indicates. LPs include public pensions, endowments, consultants, and high net worth individuals, the firm said. San Francisco Employees’ Retirement System committed $50 million to the fund, according to PEI data.

Pelican’s current portfolio includes oil well services provider Rapid Rod Service, which is headquartered in Texas and Alberta, Texas-based gas lift equipment provider Patriot Artificial Lift and Texas-based Elite Multiphase Solutions, which makes high viscosity pumps for oil and gas production, according to the firm’s website.