First Reserve Corp.’s twelfth energy fund has sizzled this summer, garnering strong interest from the usual suspects.
At least eight return backers recently committed more than $1.3 billion, and roughly half of that amount came through in the first half of August in the form of six pledges totaling $690 million. The Greenwich, Conn.-based firm is targeting $12 billion for the fund, with a $16 billion hard cap.
All told, First Reserve had gathered more than $4.5 billion in commitments from 82 investors for Fund XII, as of a July 30 regulatory filing. With this kitty the firm intends to buy stakes in a global portfolio of companies in a variety of energy industry sectors, seeking investments ranging from $200 million to $1.5 billion. About half of the acquisitions will be in existing and to-be-developed energy manufacturing and services companies, but the firm also seeks to invest in energy and natural resources reserves; renewables and alternative energy; and energy-related insurance and financial investments.
First Reserve Fund XI closed with about $8 billion in July 2006. Funds VI through XI generated an overall gross IRR of 35 percent, according to a limited partner’s document.
The largest slug in the August surge came from the Pennsylvania Public School Employees’ Retirement System, which pledged up to $250 million to First Reserve Fund XII LP. This marked a big step-up from its first commitment of $200 million for First Reserve’s Fund XI. The Massachusetts Pension Reserves Investment Management Board re-upped to the tune of a $200 million commitment to First Reserve XII, its largest pledge to the firm yet. Previous slugs have ranged from $50 million for Funds VIII and X, $75 million for Fund IX and $125 million for Fund XI.
In one of its largest single private equity commitments, the Los Angeles County Employees’ Retirement Association pledged up to $100 million to First Reserve XII in mid-August. This is the third time that the LP has backed First Reserve, having committed $50 million to Fund X and $60 million to Fund XI. The Teachers’ Retirement System of Louisiana made its second pledge to the GP by committing $100 million to First Reserve XII. Also in August, the $11.4 billion Los Angeles City Employees’ Retirement System pledged up to $25 million to the fund. The LP’s past backing of First Reserve Corp. includes up to $20 million to Fund X and up to $30 million to Fund XI.
The smallest of the August slugs came from Colorado Fire & Police Pension Association, which re-upped to the tune of $15 million, after having pledged $10 million to Funds VIII, X and XI; and $5 million to IX. Earlier commitments came from San Francisco Employees’ Retirement System and Washington State Investment Board.