Riverstone Energy is back in the market with its second energy debt fund, for which it is currently pursuing seven deals totalling approximately $680 million, an investor presentation to the New Hampshire Retirement System obtained by Private Debt Investor showed.
The firm, a direct lender to the energy sector and an affiliate of New York-based energy private equity firm Riverstone Holdings, is seeking $750 million for Riverstone Credit Partners II. Riverstone Energy is set to make a general partner commitment of up to $20 million to the vehicle, which has a four-year life with the option of a one-year extension.
The NHRS approved a commitment of $50 million at its November meeting. The Concord-based pension plan committed the same amount to Fund I in February 2016.
Fund II will focus on directly originated loans but can also buy up loans and bonds from banks and on the secondaries market. Investments for Fund II will have a maximum of a 60 percent loan-to-value ratio with a focus on senior secured first lien debt structured in a way that encourages the borrower to pay down the loan quickly, the documents show.
As of 30 June, Fund I yielded a gross net internal rate of return of 23 percent and a gross multiple on invested capital of 1.13x. After fees, the firm posted a 15.7 percent net IRR and a net MOIC of 1.09x.
The debut vehicle consisted of 62 percent private equity-backed borrowers, 25 percent private borrowers not backed by private equity firms and 13 percent public borrowers, as of 30 June. For the investments made out of the fund, 49 percent of the capital went toward refinancings, 41 percent for growth capital, 7 percent for liquidity and 3 percent for acquisitions.
Several of the largest infrastructure fund closes have been debt vehicles with an investment mandate that included energy, according to fundraising data from PDI sister publication Infrastructure Investor.
AMP Capital closed Infrastructure Debt Fund III on $2.5 billion, while EIG Global Energy Partners closed on $2 billion for its EIG Global Private Debt Fund in May. Large energy funds in market include the $1 billion Avenue Energy Opportunities Fund II.
Almost one-third of the capital raised by infrastructure funds through the third quarter was for debt investments, data from II showed.
Riverstone Energy invests across an array of energy sectors, including exploration and production, midstream, energy services and conventional power.
In May, Riverstone Holdings and Goldman Sachs reached an agreement in which the New York-based investment bank would purchase a 12 percent minority stake for up to $500 million, The Wall Street Journal reported.