Pine Brook targets $2bn for second fund

After generating a 14.35% IRR on its $1.43bn debut fund, Howard Newman-led Pine Brook is back on the market with a $2bn vehicle.

Pine Brook has launched its second Capital Partners fund with a $2 billion target, according to documents filed Wednesday with the US Securities and Exchange Commission. 

Firm president and chief executive officer Howard Newman is the only person listed as a general partner on the SEC documents, though the firm’s other managing directors are also key men on the vehicle, according to one market source. Credit Suisse Securities is a placement agent on the fund.  

Pine Brook declined to comment on this story. 

Pine Brook generated a 3x return on its first portfolio company exit in 2010, setting a strong precedent for its 2009 debut fund’s continued performance. As of 31 December, that $1.43 billion vehicle was generating a 1.22x multiple and 14.35 percent internal rate of return, according to Teachers’ Retirement System of the City of New York agenda documents.

The new fund has already generated interest from limited partners. In July, Pine Brook Capital Partners II received a $50 million commitment from the Kansas Public Employees Retirement System, KPERS spokeswoman Kristen Basso told Private Equity International. 

Pine Brook’s investment strategy for the new vehicle is similar to that of its predecessor; focusing heavily on the energy and financial services sectors with specific interest in oil and natural gas, exploration and production, oilfield services, transportation and storage infrastructure, power generation and transmission companies. 

The firm rarely deploys debt in its investments, relying instead on a strategy that invests equity in companies the firm has helped build from the ground up. 

“We wanted to build an investing practice which was unleveraged, focused on creating organisations of scale from scratch, and we wanted to do it in an organisation where that form of investing would be central rather than peripheral,” Newman told Private Equity International for a 2010 Privately Speaking.