LS Power targets $2 bln for power-generating assets

  • New fund will acquire six to eight power assets
  • Three predecessor funds notched top-quartile returns
  • Firm acquired four power-generation facilities in PA in December

LS Power Equity Advisors is targeting $2 billion for a new fund that will invest in U.S. energy-infrastructure assets, a Hamilton Lane report prepared for Teachers’ Retirement System of Louisiana shows.

The $19.6 billion retirement system’s board approved a commitment of up to $50 million to LS Power Equity Partners IV at its Jan. 4-5 meeting, Deputy CIO Maurice Coleman told Buyouts in an email.

LS Power Equity Advisors, the infrastructure-investment arm of power-generation company LS Power, specializes in acquiring power-generating assets across several subsectors, including renewables and natural-gas projects. Fund IV’s portfolio will likely include six to eight investments with the firm investing $200 million to $500 million of equity per deal.

In December, the firm announced the acquisition of four power-generation facilities throughout Pennsylvania. LS Power has also sold three of its power-generation facilities over the past year.

Hamilton Lane marked all three of LS Power Equity Advisors’ previous funds as top-quartile vehicles. Fund III, which raised almost $2.1 billion in 2014, was netting a 13 percent IRR and 1.2x multiple as of Sept. 30. The firm’s $3.1 billion 2007 vintage was netting an 11.7 percent IRR and 1.5x multiple as of the same date.

The firm is led by Mike Segal, James Bartlett, Paul Segal and Darpan Kapadia, with Joseph Esteves and David Nanus acting as co-heads of the firm’s fund investment strategy. LS Power has offices in New York, New Jersey, Missouri, Texas and California.

The firm did not respond to a request for comment.

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Smoke billows from the chimneys of Belchatow Power Station, Europe’s biggest coal-fired power plant, in this May 7, 2009, file photo. REUTERS/Peter Andrews