Energy Capital Partners seeks $6bn for Fund IV

The vehicle has a $150m commitment from the Minnesota State Board of Investment and held a first close last week.

Energy Capital Partners is targeting $6 billion for its fourth fund, according to Security and Exchange Commission filings and investor documents.

Energy Capital Partners IV expects to make 10-20 commitments of $250 million-$750 million each, according to documents released by the Minnesota State Board of Investment. The vehicle will primarily invest in North America but may look at opportunistic investments in Europe, particularly the UK.

The fund has a hard-cap of $6.5 billion, Infrastructure Investor has learnt, and will target a net internal rate of return of 15-20 percent. The fund launched in autumn 2017 and held a first close on an undisclosed amount last week. Fundraising is expected to be completed around the beginning of the summer.

ECP declined to comment on the fund raise.

ECP, founded in 2005 and headquartered in New Jersey, is targeting nearly $1 billion above its previous fundraise, which closed in April 2014 on $5.05 billion. That fund exceeded its $3.5 billion target and has generated a net IRR of 9 percent, according to MSBI documents. Its predecessor, which closed in 2010, raised $4.34 billion and saw a 15 percent net IRR. The firm has raised more than $16 billion in total capital.

ECP’s newest fund will continue its predecessors’ investment strategy, targeting assets in the power generation, renewables, midstream oil and gas, and environmental infrastructure sectors, along with related services. ECP will commit at least $100 million of its own capital to the fund.

In August, ECP acquired Calpine Corporation, a US-listed power generation company, in a $5.6 billion deal. Financial close on that transaction is expected this quarter with part of the investment coming from ECP IV.

Last month, MSBI committed $150 million to the vehicle. The board previously committed $100 million to ECP II and $200 million to ECP III.