Pine Brook closes Fund II above target

The energy and financial services-focused firm raised $2.43bn on a $2bn target.

Pine Brook has closed its Pine Brook Capital Partners II on $2.43 billion, surpassing its $2 billion target according to a statement.

Fund II launched and 2012 and received about half of its commitments from existing investors. New limited partners in Fund II include US public pensions and endowments as well as investors from Europe, China and Southeast Asia. The New Mexico Educational Retirement Board committed $50 million to the fund.

“We like investing alongside [co-founder] Howard Newman,” Steven Neel, deputy chief investment officer at New Mexico Educational, previously told Private Equity International.  “The way they deploy capital creates very low leverage. It’s almost like a venture model.”

Credit Suisse acted as a placement agent for Fund II, according to the statement. Pine Brook’s debut fund closed on $1.4 billion in April 2009.

Fund II has already invested $300 million in five companies. Pine Brook acquired a 35 percent stake in oil and gas company Elevation Resources for $29 million and a 7 percent stake in insurance company Global Atlantic Financial Group for $100 million, PEI reported. Four of fund II’s portfolio companies have limited partner co-investments.

“Many of our LPs would like to co-invest alongside us,” Joseph Gantz, Pine Brook chief operating officer and managing director told PEI. “It allows us to control more of the investment and keep the economics inside the Pine Brook family.”

Pine Brook targets investments in the energy and financial services sectors. The firm typically makes investments with equity, rather than debt.

“There is no shortage of macro factors driving investment opportunities in both of our targeted sectors, including regulatory changes, demographic shifts and financial repression in the financial services industry, and the unconventional revolution in oil and gas,” William Spiegel, Pine Brook co-founder and head of the financial services investment team, said in the statement. 

In 2013, Pine Brook took two companies public—mortgage insurance company Essent Group and specialty property and casualty reinsurance business Third Point. The firm views initial public offerings as a source of financing rather than an exit, Spiegel previously told PEI, adding that he expects more IPOs of financial services companies in 2014 compared to 2013.

“It’s the start of an exit plan for a private equity firm but it generally isn’t an exit unless you’ve sold 100 percent of your shares,” he said.

New York-based Pine Brook was founded by Michael McMahon, Gantz, Newman and Spiegel in 2006.