Dell’s MSD Capital Raises $780 Million for Energy Hedge Fund

Dell Inc. CEO Michael Dell
Michael Dell, chairman and chief executive officer of Dell Inc. Photographer: Andrew Harrer/Bloomberg

MSD Capital LP, the money-management firm that oversees Michael Dell’s fortune, raised almost $780 million for a hedge fund that will invest in energy companies, according to a regulatory filing.

MSD Energy Partners LP, based in New York, received the backing from 25 investors, according to a Form D filed today with the U.S. Securities and Exchange Commission. The fund will be run by Brian Frank, a former employee at Cumberland Associates, a New York-based hedge fund that invests in oil and gas stocks.

Dell, founder and chairman of Dell Inc., the Round Rock, Texas, company that ranks as the world’s third-largest personal-computer maker, formed MSD Capital in 1998 to manage his family’s investments. The firm, which has more than $12 billion in assets under management, makes private-equity and real estate investments as well as taking stakes in publicly traded companies.

MSD took in capital from outside investors for the first time last year, when the firm sought backing for a fund that invests in distressed and undervalued European securities. MSD European Opportunity Fund LP and its offshore affiliate have raised about $506 million, according to separate filings with the SEC in January and February.

MSD Capital began acquiring shares of Blueknight Energy Partners LP during the third quarter of 2008 and now holds a 16.5 percent stake in the Tulsa, Oklahoma, provider of crude oil gathering, transportation and storage services, according to regulatory filings.

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