ArcLight Launches Fifth Energy Fund

The Boston energy buyout firm ArcLight Capital Partners LLC has held a $382.7 million close on a planned $2 billion fifth fund, a regulatory filing shows.

ArcLight, formed in 2001 by co-founders Daniel R. Revers and Robb E. Turner, focuses exlusively on the energy industry, but it invests broadly within the sector, including coal, oil and gas production, power generation, gas and electric transmission and related service businesses.

Revers was formerly managing director in the Corporate Finance Group at John Hancock Financial Services. Before joining John Hancock in 1995, Revers held various positions at the energy company Wheelabrator Technologies Inc., where he focused on the acquisition and financing of domestic and international power and energy projects. Turner founded and built the energy advisory practice at the New York-based private investment bank Berenson Minella & Co. From 1990 to 1998, Turner held senior positions at Smith Barney, Schroders, Wasserstein Perella and Kidder, and Peabody & Co.

ArcLight manages more than $6.8 billion across its four existing funds, according to the firm’s Web site. Its older funds have performed more strongly than its more recent ones, according to its limited partners. Its 2007-vintage ArcLight Energy Partners Fund IV LP had an investment multiple of 1.10x and a net IRR of 6.3 percent; the 2006-vintage ArcLight Energy Partners Fund III LP, a multiple of 1.10x and net IRR of 3.2 percent; and the 2004-vintage ArcLight Energy Partners Fund II, a multiple of 1.50x and net IRR of 16.2 percent, as of June 30, 2010, according to the California Public Employees’ Retirement System. The 2001-vintage ArcLight Energy Partners Fund I LP had a multiple of 1.79x and an IRR of 24.46 of percent as of May 2010, according to the University of Texas Investment Management Co.

On its most recent fund, ArcLight has called just more than three-fifths of CalPERS’s commitment to the $2.1 billion pool, the pension fund’s report showed. ArcLight is working with Barclays Capital Inc. to promote the new fund, according to the Jan. 21 regulatory filing.

In October, ArcLight formed a joint venture with OGE Energy Corp. of Oklahoma City, called Enogex Holdings, after ArcLight paid OGE $183 million for a 9.9 percent stake in its Enogex unit, a midstream natural gas pipeline business. OG&E is a regulated electric utility serving Oklahoma and western Arkansas.

In July, ArcLight acquired a 640-megawatt electric power plant in Sandersville, Ga., from KGen Power Corp. The deal was valued at $130 million, with GE Capital leading a $98 million financing package. The plant uses eight 80-megawatt GE gas turbines to supply power into the Southeastern power market during periods of peak demand.