Riverstone invests aggressively amid fundraise

The energy-focused firm has made its eighth investment from Fund V, which has raised more than $5bn toward a $6bn target.

Riverstone Holdings will invest up to $500 million in Sage Midstream, a newly formed company focused on natural gas liquids gathering, transportation and processing in North America.

Riverstone will partner with oil and gas services company Kaiser Midstream to create Sage, which will provide gathering, transportation and processing services in “liquids-rich” production areas. Sage is led by president Greg Bowles, former executive vice president of Lone Star NGL, a joint venture between Texas-based natural gas companies Energy Transfer Partners and Regency Energy Partners.

Riverstone declined to comment.

Sage marks Riverstone’s eighth announced investment from Fund V, which has raised more than $5 billion toward a $6 billion target. Last month, Riverstone invested in Texas-based oil and gas company Three Rivers Natural Resource Holdings II and in July the firm invested up to $500 million in Meritage Midstream Services II, a newly formed company focused on natural gas opportunities in North America.

Riverstone Global Energy and Power Fund V is the firm’s first fund since concluding its relationship with The Carlyle Group last year. The fund, which launched in November 2011, has generated strong interest from investors, sources said, citing the firm’s “constant” level of deal flow. Limited partners in Fund V include the Teachers’ Retirement System of Illinois, the Public Employees’ Retirement Association of New Mexico and the State of Wisconsin Investment Board.

Energy and oilfield services funds have attracted strong interest from limited partners in 2012. Natural Gas Partners closed its tenth fund on $3.58 billion in July and Intervale Capital has raised more than half its $350 million target for its second fund focused on oil and gas exploration and production companies.

Riverstone focuses on investments in the energy and power sectors and has also raised a fund targeting the alternative energy industry. The firm was founded in 2000 by David Leuschen and Pierre Lapeyre and has around $22 billion in assets under management.