Exclusive: LS Power IV hits quick $1.5bn first close

LS Power Equity Advisors held a first close on $1.5 billion in December for its fourth fund investing in energy infrastructure, Infrastructure Investor has learnt.

The firm has collected three-quarters of its $2 billion target since it hit the market in September and will likely reach its $2.5 billion hard-cap by the end of March.

LS Power had not replied to a request for comment by the time of publication.

The firm has an 18-year track record as a developer and operator of power generation, transmission and energy infrastructure projects in North America. In 2005, it launched LS Power Equity Advisors as its private equity arm, which is led by Joseph Esteves and David Nanus.

According to documents made public by the Teachers’ Retirement System of Louisiana, a $19.3 billion pension fund which has committed $50 million to the fundraising, LS Power Equity Partners IV will invest between $200 million and $500 million per deal with an expected hold period of four to five years.

LS Power’s fundraising for its first infrastructure vehicle began in 2005 and collected $1.2 billion. The firm raised $3.09 billion in 2007 for the second incarnation and $2.06 billion in 2014 for the third. The three funds are returning a net IRR of 12.9 percent, 11.7 percent and 13 percent respectively, according to the pension documents.

The company’s assets are located across the US, with many of its power plants in New England and the Midwest. Its most recent acquisitions include power generation assets in Pennsylvania, New York, Rhode Island and Maine.