Blackstone eyes first close for Energy Partners II

  • Blackstone is targeting $4 billion for new pool
  • Fund considered likely to be oversubscribed
  • Blackstone offering 1.5 pct management fee

Blackstone’s previous Energy Partners fund closed on $2.5 billion in 2012 and already had drawn $1.5 billion for eight investments as of June 30, according to the San Francisco documents. The fund has performed well, generating a 1.6x investment multiple and netting a 52 percent internal rate of return as of the same date.

Blackstone is offering investors favorable terms for Energy Partners II, according to the San Francisco Employees’ Retirement System, charging a 1.5 percent management fee on committed capital through the investment period and a 1 percent fee of net invested capital thereafter. The fund also has an 8 percent preferred return for investors.

The fund’s key men include David Foley, who leads the firm’s dedicated energy team, as well as Angelo Acconcia, Sean Klimczak, Joe Baratta, Hamilton James, Prakash Melwani, Vikrant Sawhney and Stephen Schwarzman.

Blackstone has set a $4 billion target for Energy Partners II, which will be used to make 16 to 24 investments in the energy and natural resources sectors. The firm typically will invest $200 million to $500 million of equity in each of the fund’s deals. The fund also will invest in deals alongside the firm’s active flagship fund, Blackstone Capital Partners VI.

Blackstone has earmarked approximately 50 percent to 60 percent of Energy Partners II’s investment capital for international deals. The firm will invest the remainder in businesses operating in the United States.

Blackstone established its dedicated energy team in 2011. As of June 30, energy deals completed through the first Energy Partners fund or the firm’s diversified vehicles have generated a 2.1x multiple and a 38 percent net IRR, according to the San Francisco documents.