TCW Spinoff EIG Is Said to Cap Energy Fund at $6 Billion
EIG Global Energy Partners LLC, the asset manager spun off from TCW Group Inc. in January 2011, set a limit of $6 billion on its latest energy offering that would make it one of the biggest private-equity funds focused on the industry, two people with knowledge of the matter said.
The firm, based in Washington, capped the fund last month in response to requests by large investors who didn’t want it to grow beyond that size, said one of the people asking not to be named because the information isn’t public. EIG Energy Fund XVI LP, which is targeting $4.25 billion, closed last week on $4 billion and expects to complete fundraising by the end of the month, the people said.
Laurie Labuda, a spokeswoman at APCO Worldwide, declined to comment on behalf of EIG.
EIG, which makes mezzanine and private-equity investments in energy, infrastructure and natural-resource businesses globally, is attracting interest in a crowded market where managers are seeking billions of dollars to take advantage of growth opportunities. Riverstone Holdings LLC raised $7.7 billion for a new private-equity energy fund in June. First Reserve Corp. lowered the maximum amount it will seek for its latest fund to $5 billion from $6 billion, three people familiar with the matter said in May.
EIG, which is partly owned by the sovereign wealth fund China Investment Corp., expects to scale back some commitments amid excess demand for its latest vehicle, said one of the people. The fund’s predecessor raised $4.12 billion in 2011 and was generating a 22 percent internal rate of return as of March 31, according to performance data from New Mexico Educational Retirement Board.
The new fund will invest globally with an emphasis on the U.S., Canada, Western Europe and Australia, according to a fund launch letter sent to investors in February. EIG has opened two offices in the past two years, in Hong Kong and Rio de Janeiro. Last week, EIG took control of LLX Logistica SA, the logistics unit of former Brazilian billionaire Eike Batista. EIG agreed to buy as much as 1.3 billion reais ($543 million) of new shares in the company at 1.20 reais each, making it the controlling shareholder.
The firm, whose team has invested $15 billion since 1982, was formerly the energy and infrastructure unit of TCW Group. EIG is led by Blair Thomas, Kurt Talbot and Randall Wade.