First Reserve Veteran Raises $1.4 billion For Energy Fund

Firm: White Deer Management LLC

Fund: White Deer Energy LP II

Target: $1 billion (excluding GP contribution)

Hard Cap: $1.275 billion (excluding GP contribution)

The Houston and New York-based private-equity firm raised nearly $1.3 billion from a wide range of investors, including corporations, union pension plans, insurance firms, wealthy individuals, school endowments and big charitable institutions, said Thomas Edelman, a principal owner and managing partner of White Deer.

Edelman and Ben A. Guill, president of energy-focused private equity firm First Reserve Corp. from 1998 to 2007, also invested more than $100 million of their own money plus another $12 million from partners and member of their advisory board  to bring the pool to nearly $1.4 billion.

About 40 percent of the fund is earmarked for exploration and production firms, another 40 percent for oil service companies and 20 percent for local energy infrastructure such as natural gas gathering lines for terminals and storage natural gas fields, Edelman said.

Standard fees of 2 percent for management and 20 percent of profits after an 8 percent rate of return threshold apply to White Deer Fund II, he said.

“We generally acquire between 51 percent and 85 percent of the companies we invest in,” Edelman said. “We are seeking companies that we think have terrific growth prospects and where our combination of capital and expertise can help them expand more profitably and rapidly. We’re trying to be partners by working with management.”

Overall, the domestic energy sector offers promising returns for investors for the next 20 years, Edelman said.

“The U.S. is our principal focus with a vast universe of 15,000 independent oil companies,” Edelman said. “It’s a gigantic universe of possibilities.”

The latest fund comes after the firm closed its White Deer Energy LP in 2010 with more than $800 million in investments. That fund is now about 95 percent invested and committed.

Edelman’s resume includes founding or co-founding Snyder Oil Corp., which is now part of Devon Energy Corp., Range Resources, and Patina Oil and Gas, a unit of Noble Energy Inc.