Rhode Island gets on board EnCap’s latest fund

The state’s investment commission approved committing $20m to EnCap’s Fund IX, which is targeting $4.25bn and already has the support of several public systems in the US.

Rhode Island’s state pension system recently committed $20 million to EnCap Energy Capital Fund IX, which is targeting $4.25 billion, according to minutes from the state investment committee’s October meeting.

EnCap has been enjoying a lightning fundraise as its eighth fund, closed just last year, has been generating a 53 percent internal rate of return, according to a report from Hamilton Lane prepared for the Los Angeles City Employees’ Retirement System. LACERS is an LP in EnCap’s Fund VIII.

The New Mexico State Investment Council earlier this month approved a commitment of $75 million to the vehicle.
Charles Bauer, co-head of investor relations and fundraising with EnCap, said none of the firm’s funds have ever lost money, and only one fund did not achieve its targeted rate of return, according to minutes from the Rhode Island State Investment Commission meeting.

The firm had invested in about 200 companies and turned $4.4 billion into $11.8 billion for a cumulative 62 percent gross internal rate of return and a 2.7x multiple, the minutes said. 

Rhode Island has about $211.8 million in unfunded commitments on $1.1 billion of total commitments. The system, which is overseen by state treasurer Gina Raimondo, has a target of 9 percent to private equity and an actual allocation of 8.3 percent.

Last year, the State Investment Commission, which overseas investments of about $7.3 billion in overall assets across various state funds, including the Rhode Island Employees’ Retirement System, approved the hiring of Cliffwater as its private equity consultant. Cliffwater replaced Pacific Corporate Group Asset Management.