Riverstone Holdings will invest up to $500 million in Meritage Midstream Services II, a newly-formed company focused on natural gas gathering, transportation and processing in North America.
Meritage II is led by chief executive officer Steven Huckaby and president Nick Thomas, two oil and gas executives who formed Meritage II’s precursor company, Meritage I, in 2009. Meritage II will provide gathering, transportation and processing services in natural gas producing areas with insufficient infrastructure to handle significant increases in production.
Meritage marks the firm’s sixth investment from Fund V, which has raised $3 billion toward a $6 billion target, according to Private Equity International's data service. In February, the New Mexico Public Employees Retirement Association committed $30 million to Fund V.
Riverstone V is the firm’s first fund since concluding its relationship with The Carlyle Group last year. The fund, which launched in November 2011, has generated strong interest from investors, sources said, citing the firm’s “constant” level of deal flow.
Riverstone focuses on investments in the energy and power sectors and has also raised a fund targeting the alternative energy industry. The firm was founded in 2000 by David Leuschen and Pierrre Lapeyre and has around $17 billion in assets under management.