Energy Investors powers up $1.35B fund

Energy Investors Funds closed its seventh fund last month with $1.35 billion in commitments, eclipsing its $1 billion target. United States Power Fund III is the firm’s largest fund to date, surpassing its $750 million, vintage 2005 predecessor. United States Power Fund II is more than 75% committed.

The Boston-based raised the fund from 43 limited partners, many returning investors, including ABP Investments, Contra Costa County Employees Retirement Association, Howard Hughes Medical Institute, John Hancock Life Insurance Co., Mayo Clinic, New York Life Investment Management and University of Toronto Endowment Fund and Pension Plan.

Energy Investors invests in independent power and electric projects and companies, with an emphasis on buying power plants and transmission systems. Managing Partner John Buehler says that despite the new fund’s larger size, the firm’s investment strategy won’t be “dramatically different” from that of previous funds. The firm came out of the gates early with the new vehicle, putting an undisclosed amount in the top-secret “Green Line” development project after the fund’s first close in mid-February.

Energy Investors focuses almost exclusively on targets in the United States, although the firm expects to make a small number of investments in Canadian projects. Energy consumption in the United States is projected to rise by 31% by 2030, according to U.S. Energy Department projections. “It’s a good time to be an energy investor,” Buehler said, though he acknowledged it’s also an unpredictable time.

With roughly half a dozen bills designed to curb global climate change kicking around the halls of the U.S. Congress, the federal government is getting closer to setting mandatory limits on carbon dioxide emissions, which in turn will dictate investment decisions, Buehler points out.

The firm’s previous investments include Northbrook Energy, a Chicago-based company that owns 14 hydroelectric power generating stations throughout the United States; Burney Forest Products, a wood-fueled power plant located near Burney, Calif., that sells all of its electrical capacity and energy to Pacific Gas and Electric Co.; and Astoria Energy, a gas-fired power plant under construction in Queens, N.Y.