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Sentient Group mines $1.3bn from LPs for fourth natural resources fund

17 May 2012

The Sentient Group has closed its fourth natural resources-focused buyout fund on $1.3bn, trouncing the $816m it raised in its last vehicle in 2009.

Existing LPs made up 63 per cent of total commitments to the buyout fund, while partner Nicholas Mead said the firm has started to make new inroads into the Asian LP market.

He said, “We had very strong investor demand for Fund IV.

“We held the initial close last year at US$920m which was larger than the size for Fund III.

“We were able to do this due to the great support from existing LPs.”

Those existing LPs, which included sovereign wealth funds, endowments and funds of funds, made up 63 per cent of total commitments to the new fund.

Sentient focuses on developing natural resource including metals, minerals and energy across the globe, and has invested on every continent except Antarctica.

The firm said it runs a ‘follow-on’ investment strategy over several years and different funds due to the long-term nature of the resources business.

Chairman Peter Cassidy said, “Full value in our sector is captured by turning deposits in the ground into operational mines.

“How long that takes is dependent on many factors, and not every investment can reach that point within the traditional period of a ten-year closed-end fund of traditional private equity.”

Mead said the firm had a ready-made deal flow for each new fund as a result of the strategy.

He said, “Fund IV has already invested a quarter of its commitments in 18 investments in its first year of operation.

“Our J-curve is rather shallow as a consequence.”

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