Denham hits market with new structure

  • Denham raising oil and gas fund targeting $2 bln
  • Firm eyes $1 bln for power fund
  • Plans to launch mining fund in Q1

Denham Capital is making some big changes: It has split its business into three distinct areas of focus — oil/gas, mining and power — and is raising three separate funds around the strategies, according to three people with knowledge of the firm.

In the past, Denham, whose principal owner is Stuart Porter, invested from one universal fund. The rationale for splitting the business into three areas of focus is not clear.

“Each team is made up of sector specialists with deep expertise in their specific areas and is led by an investment committee,” Denham said in its Form ADV updated in September. “Denham believes this singular focus [of each sector team] creates alignment of our deal teams with our investors.”

Denham is launching the funds on a staggered basis: the oil/gas fund launched over the summer targeting $2 billion with a $2.5 billion hard cap. That fund raised at least $700 million, according to one of the sources, an LP with knowledge of the fundraising.

The power-focused fund, which is targeting $1 billion, also is officially in the market, though it’s not clear exactly when the power fund launched. Finally, the mining fund, targeting $750 million, is set to launch in the first quarter, according to a person with knowledge of the fund.

The oil/gas team is led by Managing Partner and Co-President Carl Tricoli, along with Partner Jordan Marye and Managing Director James Cunningham. The mining team is headed by Tricoli as well as Managing Directors Bert Koth and Victor Muñoz, who leads the firm’s São Paulo office.

Power is led by Scott Mackin, managing partner and co-president, along with Managing Directors Muñoz and Justin DeAngelis.

Denham raised $3 billion for Denham Commodity Partners Fund VI in 2012, beating its $2.5 billion target. Fund VI produced a 1.2x multiple and a 9.64 percent IRR as of June 30, 2015, according to the Washington State Investment Board, an investor in the fund.

Denham closed Fund V on $2 billion in 2008, but performance data was unavailable for that fund.

Denham became an independent firm in 2007 after spinning off from Sowood Capital Management, which split its hedge fund and private equity businesses into separate, independent entities.

Action Item: See Denham’s Form ADV here:

Photo: A gold miner scoops mud while digging an open pit at the Chudja mine in the Kilomoto concession near the village of Kobu in north-eastern Congo, February 23, 2009. REUTERS/Finbarr O’Reilly