Energy Capital misses Fund IV target

The New Jersey-based firm missed its target by $1.7bn but reported billions of dollars in co-investment opportunities for a North America-focused strategy.

Energy Capital Partners has held the final close on its fourth infrastructure fund after raising $3.3 billion, according to a statement released by the New Jersey-based firm.

The fundraising total is short of the firm’s original $6 billion target for Energy Capital Partners IV, which entered the market in December 2017. However, Energy Capital said it had also collected $3.5 billion in co-investment commitments over the same period.

Regulatory filings with the US Securities and Exchange Commission show Energy Capital lowered ECP IV’s target to $5 billion last October. At the same time, nearly two years into the fundraise, the firm reported $2.69 billion in commitments.

A spokeswoman for Energy Capital did not respond to a request for comment.

According to the statement, ECP IV is a North America-focused investment vehicle targeting core infrastructure in sectors including natural gas power generation, renewable energy and storage, and midstream and environmental infrastructure assets.

According to documents published by the Minnesota State Board of Investment, ECP IV is targeting net internal returns between 15 and 20 percent. Before the fund’s target was lowered, Energy Capital said it expected to make 10 to 20 investments of between $250 million and $750 million each, according to the LP documents.

Investors in the fund include the Teachers’ Retirement System of Texas, which committed $150 million in 2018.

So far, Energy Capital has deployed $1.4 billion of ECP IV’s equity, including in the firm’s $5.6 billion cash transaction to take private North American power company Calpine Corporation in 2017. The fund has also invested in energy storage developer Convergent Energy + Power, battery recycling company Gopher Resources and Next Wave Energy Partners, a natural gas processor.

Energy Capital was founded in 2005 by Doug Kimmelman, a Goldman Sachs veteran who spent more than two decades at the investment bank focused on the energy, power and utility sectors. According to Energy Capital’s statement, the firm has committed more than $20 billion from funds and co-investments. ECP IV’s predecessor closed in April 2014 on $5.05 billion.