EIG’s new $6 bln flagship Fund XVI oversubscribed

Launching its fundraising effort in February, EIG quickly held its first closing in May and officially wrapped up the fund on Nov. 25 at its hard cap, excluding affiliate investments.

EIG CEO Blair Thomas told Buyouts the firm stands apart from other multi-billion-dollar private equity energy funds this year, such as the $7.7 billion Riverstone Global Energy and Power Fund V and the $2.5 billion Blackstone Energy Partners.

“We’re the most global of any of the specialists,” Thomas said. “We’re looking at every major market around the world. We’ve got the longest, continuous track record of any institutional player in the word with 32 years. Energy is a business where specialization counts.”

EIG’s Energy Fund XVI will likely increase its average deal size to about $400 million from $350 million. While the $4 billion Energy Fund XV had about $1.5 billion in co-investments, EIG upped the overall size of Fund XVI and reduced the share of co-investment dollars, although that option will still be available to LPs, he said.

With EIG ramping up its AUM to $16 billion including commitments to Energy Fund XVI, the firm may in the next year hire up to five investment professionals to add to its current staff of 76, Thomas said.

EIG said it drew capital commitments from 150 limited partners from 18 countries, with 40 percent of its capital coming from outside the U.S.

The firm plans to continue its focus on hybrid debt and structured equity investments in energy and energy-related infrastructure companies around the globe. The U.S. will account for roughly 50 percent of its deals.

EIG recently invested about $500 million to complete the development of the Açu Superport project, an energy infrastructure project on the coast near Brazil’s large offshore Campos, Santos and Espirito Santo basins launched by Eike Batista, the Brazilian business magnate now struggling with the bankruptcy of his shipbuilding unit OSX and oil firm OGX.

Under the deal announced in October, EIG would become the controlling group for LLX Logistica SA, an entity created by Batista. Batista fell into a cash crunch after production wells at his OGX Petroleo e Gas SA fell short of targets. Despite the setback, the fields off the coast of Brazil rank among the most significant global oil discoveries in the last 40 years, observers said.

Looking ahead, Thomas said EIG has a “robust pipeline in most every part of the world in which we operate.”

Among EIG’s LPs, Baltimore County Employee Retirement System committed $7.5 million to Energy Fund XVI earlier this year, according to a statement from the pension fund.

Formerly the Energy & Infrastructure Group at Trust Company of the West, EIG closed Fund XV in May, 2011, with $4.1 billion in commitments as its first fund outside of TCW. In 2012, Carlyle Group moved to buy TCW from Societe Generale of France in a deal that closed earlier this year.