Female-founded Emerald Bridge seeks $400m for debut energy fund

Emerald Bridge Capital, led by former Ridgemont Equity Partners executive Cay Freihofer, set a $400 million target for its debut energy infrastructure fund, sources told Buyouts.

Freihofer, with Ridgemont for more than 13 years, most recently as a partner, left in September to launch Emerald, according to her LinkedIn profile. She is already raising EBC Fund I, which has a hard-cap of $550 million, sources said. A first closing is expected to be held some time next year.

Along with the main offering, Emerald is raising a co-investment side-car vehicle targeted to bring in $100 million, sources said. The firm declined to comment.

Freihofer has worked in the North American energy industry for nearly two decades. She started in the oil and gas investment banking group of JP Morgan Securities. In 2008, she went to Banc of America Capital Investors, the predecessor to Ridgemont, joining the energy team.

At Ridgemont, Freihofer led or co-led deals across the energy spectrum, taking in conventional upstream, midstream and downstream sectors as well as renewables, several of them done by the 2017 vintage Ridgemont Equity Partners Energy Opportunity Fund. Companies backed included WhiteWater Midstream, a pipeline operator.

The Ridgemont energy fund was earning a 28.15 percent IRR as of December 2022, according to State of Wisconsin Investment Board.

Investing in oil and gas has gained momentum of late, owing to the industry’s improved fortunes since 2020. After bottoming out during the pandemic, prices rose with increasing consumer demand and tighter supply.

However, traditional energy private equity funds have not always had capital available to pursue attractive dealflow. North American fundraising mostly declined since 2014, eroding dry powder, though some traditional managers have had success pivoting to energy transition strategies.

Emerald’s playbook is rooted in Freihofer’s experience at Ridgemont, sources said. It will make control-oriented investments of $50 million-$250 million in US businesses and management teams focused on improving existing energy infrastructure, supply and value chains in a way that also supports the energy transition and reduces carbon intensity.

A key opportunity is the development of greenfield pipeline infrastructure feeding LNG export facilities, sources said, an area that taps into growing demand in Asia and Europe. Another is the aggregation of related energy real assets, such as minerals, some of them emerging from upstream consolidation.

Emerald gets underway with a pipeline of deal opportunities valued at more than $1 billion, sources said.

The Charlotte, North Carolina, firm intends to build out its investment team while raising EBC Fund I, sources said. This is expected to include bringing on a second partner at the time of a first closing.