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EnCap crushes target, pulls in $6.5 bln for energy fund

  • Hits hard cap of $6.5 bln
  • Fund X targeted $5 bln
  • Arkansas Teacher Retirement commits $30 mln

The firm announced April 8 that it held a final close on its hard cap and that the fund was ”significantly oversubscribed.” The target was $5 billion. 

“We are very fortunate to have received such strong support from our existing investor base, especially during a period of significant volatility in our industry,” Doug Swanson, one of the firm’s managing partners, said in a press release.

Energy-related private equity funds have attracted interest from limited partners amid steep declines in oil and gas prices. In February, Blackstone Group closed its oversubscribed energy fund on $4.5 billion. In addition, Warburg Pincus Energy Fund held a $4 billion final close in October.

The Arkansas Teacher Retirement System committed up to $30 million to EnCap Energy Capital Fund X at its April 6 meeting, Executive Director George Hopkins told Buyouts.

Fund X has also received commitments from the Oregon Investment CouncilTeachers’ Retirement System of Louisiana and State of Wisconsin Investment Board, among others. Dow Jones previously reported the vehicle was expected to hold a final close late in the first quarter or early in the second quarter.

EnCap will invest Fund X in established oil and gas assets, according to Arkansas documents. EnCap is targeting net returns in excess of 20 percent.

Arkansas Teacher Retirement System invested in EnCap’s eighth and ninth fund “and the performance of each has been outstanding,” according to pension documents.

EnCap Energy Capital Fund VIII netted a 12.77 percent IRR as of March 31, 2014, according to the California State Teachers’ Retirement System. Fund IX, a $5 billion 2013 vintage fund that is still in its J-Curve, produced a negative 6.2 percent IRR as of the same date, CalSTRS reported.

EnCap was founded in 1988 by Managing Partners David B. Miller, Gary R. Petersen, D. Martin Phillips and Robert L. Zorich. Since then it has added three more managing partners: Swanson, Jason M. DeLorenzo, E. Murphy Markham IV, according to the press release.

Photo of Serena Williams at the U.S. Open tennis tournament in New York, September 8, 2015, courtesy of Leonard Zhukovsky / Shutterstock.com