Riverstone launches London-listed vehicle

Riverstone Energy, which hopes to raise up to £1.5bn, will co-invest alongside Riverstone's private equity fund on certain deals.

Riverstone Holdings, a US-headquartered private equity group that specialises in the energy sector, has launched a new permanent capital vehicle on the London Stock Exchange. Riverstone Energy, which will raise at least £670 million and possibly as much as £1.5 billion ($2.4 billion; €1.8 billion), will co-invest alongside Riverstone's recently closed Fund V on certain deals. 

The vehicle, which expects to be admitted to the LSE at the end of October, has already raised £550 million from five cornerstone investors – including a £50 million contribution from Riverstone Holdings. Riverstone said it would “fill an important space in the London market, enabling investors to access the investment gap between the mature majors and the smaller E&P players”.

Riverstone closed its fifth global fund – its first since concluding its tie-up with The Carlyle Group – in June on $7.7 billion, well ahead of its original $6 billion target. Its remit spans the whole energy and power sector globally, and it had already put $2.3 billion of this total to work by the time the fund closed.

The new listed vehicle, Riverstone Energy, will co-invest alongside the GP on certain deals, usually on a ratio of one-third/ two-thirds. Although no sub-sectors have been specifically excluded, according to a firm spokesman, it intends to focus on investments in the exploration and production and midstream categories. It intends to put all the capital raised to work “within 24 to 36 months”, the firm said.

In the statement, Riverstone said it had raised a total of $25 billion from investors across its various vehicles to date, and invested over $14.1 billion of equity across 81 separate deals. The portfolio has generated a net IRR of 20 percent since inception, it added.

Although Riverstone is headquartered in New York, it brought in Lord Browne, the high-profile former chief executive of oil major BP, to run its European business. Its investments in the region include UK-based Cuadrilla, a shale gas exploration company (chaired by Lord Browne) that has caused some controversy in the UK.

Lord Browne will join the board of Riverstone Energy, along with Riverstone's two founders Pierre Lapeyre and David Leuschen. It will chaired by Robert Wilson, a former chairman of UK energy group BG.