Firm: EnCap Investments LP
Fund: EnCap Energy Capital Fund IX
Target: $4.25 billion
EnCap Investments LP is about to close its ninth oil and gas fund, David B. Miller, a managing partner of the firm, said at the Buyouts Texas conference in Dallas earlier this month.
Miller mentioned the fundraising during a panel discussion on trends in the oil and gas industry, and participants were generally bullish on the outlook. The day before the panel, the International Energy Agency reported that United States oil production could surpass that of Saudi Arabia by 2020.
Miller would not discuss the fundraising in detail, in part because of an ongoing ban against general marketing of private funds exempt from the Securities and Exchange Commission’s registration requirement, but he did say after the panel that the new fund, likely to be called EnCap Energy Capital Fund IX, would be “bigger than the last one” and was 30 days away from a first close.
Sources, meanwhile told sister Web site peHUB that Fund IX has a $4.25 billion target and a $5 billion hard cap. Fund IX is so hot that EnCap has received $8 billion of interest, one limited partner said. “It’s oil and gas and everyone wants in on that.” Added a placement agent: “Money is just pouring in over the transom.”
EnCap, which has offices in Houston and Dallas, raised $3.5 billion for its last fund in early 2011. That vehicle is generating an IRR since inception of 79.05 percent, according to March 31 data from the California State Teachers’ Retirement System.
Founded in 1988, EnCap has raised 15 institutional oil and gas investment funds totaling $13 billion, according to its Web site. The firm has found a special niche backing serial entrepreneurs in the oil patch, Miller said at the conference.
Over the course of its last three funds, half of the firm’s capital has gone to management teams it has backed in the past, Miller said. In one case, he said, the firm has done six deals with one management team.
The firm plans to continue to invest aggressively in the energy industry, he said. “We’re trying to put $1 billion to work annually.”