Energy Investors Funds, a private equity fund manager that invests in the energy and electric power sector, has closed its seventh institutional fund, the United States Power Fund III, wit
Energy Investors Funds, a private equity fund manager that invests in the energy and electric power sector, has closed its seventh institutional fund, the United States Power Fund III, with USD1.35bn in commitments, exceeding the USD1bn target for the fund.
Investors in US Power Fund III include ABP Investments, Contra Costa County Employees Retirement Association, Howard Hughes Medical Institute, John Hancock Life Insurance Company, Mayo Clinic, New York Life Investment Management, and University of Toronto Endowment Fund and Pension Plan.
In total, the fund has attracted 43 investors drawn from corporate and public pension funds, funds of funds, endowments and foundations, insurance companies, banks and financial institutions and family offices in the US, Canada, Europe and Australia.
‘We had a tremendous response from the investor community for US Power Fund III,’ says John Buehler, managing partner of Energy Investors Funds. ‘The power market in the US is still extremely vibrant and investors responded to our experienced team and 20-year track record as an innovative private equity investor in this sector.’
US Power Fund III, Energy Investors’ largest fund to date, will continue the firm’s strategy of acquiring US power and energy generation and transmission assets with long-term off-take contracts. It has already made an investment in the Green Line development project.
The fund seeks to maximise returns to, and achieve liquidity for, its investors through regular cash distributions and proceeds from the sale of assets. The firm relies primarily on its own sourcing for deals, rather than participating in auctions.
‘Our investment philosophy is as relevant today as any time in our history, due to the rising energy costs and increased demand for electricity, which calls for the construction of efficient, low-emission power assets,’ says Herb Magid, another managing partner.
‘We will continue to invest across the spectrum of power assets, including assets that are in the development stage as well as facilities that are under construction or already in operation to create a portfolio of geographically and technologically diversified assets.’
Terry Darby, another managing partner, adds: ‘Our deal pipeline remains strong and is growing due to the increased need for utilities and development companies to seek outside financial partners like EIF to help build assets.
‘As the country’s power infrastructure ages, and recent energy policy changes nationwide call for the development of cleaner power plants, we should continue to see robust opportunities to put capital to work for our investors.’
Energy Investors Funds was founded in 1987 as the first private equity fund manager dedicated exclusively to the independent power and electric utility industry. It seeks to create geographically and technologically diversified portfolios of electric power-related assets that provide superior risk-adjusted equity returns with current cash flow and capital appreciation.
Energy Investors, which has offices in Boston, New York, and San Francisco, seeks to mitigate commodity risk in fuel and electricity by focusing primarily on acquiring power assets with long-term off-take contracts. The firm has raised more than USD3.3bn in capital, and currently manages six private equity funds that have made more than 90 diversified investments with a combined underlying asset value exceeding USD5bn.
