EnCap shrugs off fundraising gloom

The energy investor has raised its largest fund ever at $3.5bn after around nine months of fundraising. The fund was strongly backed by US public pensions.

EnCap Investments has closed its largest fund ever with $3.5 billion in commitments, the firm confirmed this week.

As reported earlier this month by PEI, the firm had received commitments from a slew of US public pensions, including the New Mexico Educational Retirement System, the Texas County & District Retirement System and the Minnesota State Board of Investments.

The firm had been in the market for around nine months and ultimately had to limit the amount LPs could commit because the fund was over-subscribed.

“We were very fortunate in a tough fundraising environment to be so substantially oversubscribed, and we couldn’t have done it without the strong support of our long-standing investor base,” said David Miller, one of the firm’s four managing partners, in a statement.

EnCap, which is based in Houston and Dallas, Texas, has built up a solid track record over the years and has returned almost $4 billion to investors since 2008.

Houston-based managing partner Marty Phillips said it was “gratifying” that the firm added a “cadre of new and highly-sophisticated institutional partners, both domestic and international” to its investor base.

Fund VIII has already deployed $700 million across six different investments and provides growth capital to management teams focusing primarily on the upstream sector of the oil and gas industry in North America.

In March 2010, EnCap closed its EnCap Energy Infrastructure Fund on $792 million, which backs management teams with growth capital in the midstream sector of the oil and gas business.

The firm raised its first fund in the late 1980s and its latest vehicle follows a $2.5 billion fund closed in December 2007.