EIV Capital secured more than $640 million toward an overall target of up to $750 million for its fourth flagship midstream energy fund and a sidecar pool, according to a Form D fundraising document.
The Houston private equity firm set a target of $525 million and a hard cap of $600 million for EIV Capital Fund IV, a source told Buyouts. The sidecar pool, which will invest alongside the flagship to give investors more exposure to midstream assets, is offering $150 million.
It is not clear in the Form D document how the amounts raised were apportioned between the vehicles. If Fund IV reaches the $600 million hard cap, it will be 33 percent larger than its predecessor, which closed in 2017 at a hard cap of $450 million.
EIV collected initial commitments for Fund IV in December, the Form D document showed, and has so far signed on 64 limited partners.
Disclosed Fund IV LPs include New York State Teachers’ Retirement System, which is committing $75 million to the flagship and $30 million to the sidecar; and Texas County and District Retirement System, which is committing $75 million to the flagship and $25 million to the sidecar.
EIV invests in lower mid-market companies in North America’s midstream and downstream energy sectors, according to the firm’s website. It mostly focuses on opportunities in processing, transporting, storing or converting oil, natural gas and refined products, with EBITDA of $5 million to $40 million and values of $20 million to $200 million.
EIV writes checks of $20 million to $80 million per deal for companies requiring growth equity, acquisitions of stand-alone businesses, carve-outs from larger organizations and recaps.
Global energy PE fundraising was at a low ebb in 2019. In all, 28 vehicles collected $25 billion, roughly half of the $49 billion secured by 35 funds in 2018, according to PEI Research data. In fact, the pace of activity last year was the slowest in more than a decade.
In this challenging environment, EIV is perhaps benefiting from its midstream specialization. As reported by Buyouts this month, midstream funds appear to be faring better relative to other oil-and-gas fund types due to strong economic demand for infrastructure and the fact that LPs have previously committed little capital to the strategy.
EIV is led by Managing Partner Patti Melcher, who co-founded the firm in 2009, and Partners Jenny Gottschalk, David Finan and Greg Davis. Anthony Annunziato, also a co-founder, serves on the investment committee.
EIV did not respond to a request for comment prior to publication of this story.
Action Item: Check out EIV Capital’s ADV filings here.