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ARC Financial near $1 bln first close of Fund VIII

ARC Financial Corp, the Calgary-based investor in Canadian oil and gas projects, is approaching a first close on about $1 billion for its eighth buyout fund, according to a source familiar with the firm.

Headed by Co-CEOs Kevin Brown and Lauchlan Currie, ARC Financial waded into the fundraising market about 10 weeks ago for ARC Energy Fund 8. The 2012 predecessor fund drew in about $1 billion.

Limited partners have been drawn to Fund 8 partly because of the firm’s track record, as well as the opportunity to participate in lower-priced deals stemming from a sharp drop in crude oil prices in recent months, the source said.

If ARC Energy Fund 8 reaches its $1.5 billion cap, it’ll be the firm’s first private equity pool to break the $1 billion barrier. ARC launched its first fund in 1997 with about $155 million in commitments.

All told, it has raised about $3.7 billion in commitments for its private equity funds, not including any pledges to ARC Energy Fund 8. LPs in past funds include universities, foundations and endowments.

Atlantic-Pacific Capital is the placement agent for ARC Energy Fund 8.

Founded in 1989, ARC typically targets investments of about $25 million to $100 million each for terms of three to eight years, with a focus on the upstream oil and gas sector, which includes fossil fuel exploration, development and production. Investments include emerging resource plays and oilfield services.

While the firm’s leadership has been unchanged for many years, it did add Chris Seasons to its team as a senior advisor, according to a February 26 statement. An engineer by trade, Seasons retired last June as president of Devon Canada, a unit of Devon Energy. He’ll work on new deal origination and operational matters, and will sit on company boards as a representative of ARC Energy Funds, the firm said.

Update: ARC’s most recent transaction was completed in January. The firm provided initial financing to Rifle Shot Oil Corp, a Calgary company focused on acquiring and developing conventional oil reservoirs.

In October 2014, ARC also led an investment in Calgary’s Deltastream Energy, which targets medium and heavy oil asset opportunities in Alberta and Saskatchewan.

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