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First Reserve holds $2.5bn hard cap close for second infrastructure fund

16 Jun 2014

oil well drillEnergy-focused private equity firm First Reserve has closed its second infrastructure fund on its $2.5bn hard cap after just eight months in the fundraising market.

The vehicle is more than twice the size of its 2009 predecessor, and brings its totals assets under management aimed at energy infrastructure to more than $4bn.

AltAssets revealed last October that the firm could target up to $2.5bn for the follow-up fund, more than double the previously reported amount.

First Reserve chairman and CEO William Macauley said, “First Reserve initially launched an energy infrastructure investment program to enable our team to offer broader and more strategic solutions to both our wide network of corporate partners and our investors.

“We are thrilled at how the strategy has played out, meeting our expectations of delivering long-term contracted revenues.

“The success of this most recent fundraise is a testament to our investors’ belief in our investment model and the strong execution of our infrastructure investment team.”

First Reserve’s first infra vehicle concentrated on contracted midstream resources including pipelines, storage and LNG facilities, renewable and conventional power generation, and transmission and distribution including electric and gas utilities.

The first deal made through the fund was a joint venture with solar company SunEdison to acquire utility-scale solar photovoltaic power generation facilities.

In April last year AltAssets reported that First Reserve had slashed its fundraising ambitions in the wake of the financial crisis by targeting $5bn for its latest flagship vehicle.

First Reserve has picked up a $130m commitment for its latest flagship vehicle from listed Chinese property business Hainan Zhenghe Industrial Group, the second LP which has been identified as a backer.

The Washington State Investment Board revealed last year it had pledged $400m.

First Reserve has set the bar much lower for its latest vehicle than for the $9bn predecessor it raised in 2009, which had initially eyed up to $12bn of commitments.

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