Tailwater Capital on fundraising tear since splitting off from HM Capital

Firm: Tailwater Capital LLC

Fund: Tailwater Energy Fund II LP

Target: $400 mln

Hard cap: $650 mln

Amount raised: $650 mln

Placement Agent: Capstone Partners LP

Led by Edward Herring and Jason Downie, who have worked together for 16 years, Tailwater Capital launched Fund II in early 2014 and held its final close last month at its hard cap, according to a statement from the firm.

Tailwater Enegy Fund II is already about 10 percent invested with three platforms: TexStar Midstream Logistics, Align Midstream and PetroWaste Environmental LP, according to a spokeswoman for the firm.

The firm continues to evaluate additional projects behind each company along with new platform opportunities, focusing on the midstream sector, which includes pipelines, processing plants, and other distribution infrastructure in the oil and gas industry.

“The Tailwater team continues to grow, and we are excited to be making new investments at a time in which midstream infrastructure is in such acute need,” Downie said in a statement.

Tailwater Capital said it has now raised a total of $1.3 billion since 2013 for three funds, including Tailwater Energy Fund II, Tailwater E&P Opportunity Fund and Tailwater Energy Fund I.

Tailwater Capital arose from the wind-down of HM Capital, the successor to Hicks, Muse, Tate & Furst, in 2013, with the energy team from HM Capital launching their own private equity shop. Meanwhile, Kainos Capital LLC was formed from the remnants of HM Capital’s consumer team.

Landmark Partners played a role in the early days of Tailwater Capital by financing the secondary purchase of portfolio companies from HM Capital’s portfolio. Tailwater Capital launched with three companies: TexStar Midstream Services, SunTerra Well Services and BlackBrush Oil & Gas.

In August 2014, Tailwater Capital teamed up with two other private equity firms on a deal for Southcross Holdings, which combined entities of Southcross Energy Partners and TexStar Midstream in the Eagle Ford shale region of South Texas. EIG Global Energy Partners, Charlesbank Capital Partners and Tailwater Capital each indirectly own about one-third of Southcross Holdings.

In June of last year, Ares Management LP announced the purchase of BlackBrush Oil & Gas from EIG Management Co and Tailwater Capital for an undisclosed sum.