Energy Capital's Mezzanine Opportunities Fund closes at $805 million

By Toni Weeks

San Luis Obispo, Calif., Feb. 21 - Energy Capital Partners announced that its Energy Capital Partners Mezzanine Opportunities Fund, LP secured $805 million of total commitments by its final close, exceeding the $500 million target.

"This is an important milestone in Energy Capital's history that broadens our role as a leading capital solutions provider to the energy industry by responding to a market opportunity to offer flexible funding alternatives via the mezzanine fund," senior partner Doug Kimmelman said in a press release.

The fund targets investments in debt and preferred equity across the entire energy value chain with a focus on fossil and renewable power generation, electric transmission, midstream oil and gas, energy efficiency and conservation, and environmental and energy services.

To date, the fund has made senior secured loans to Chieftain Sand and Proppant LLC and Sungevity, Inc. via agent Park Hill Group LLC.

According to the release, the fund was formed in response to the attractive debt and preferred equity opportunities seen during deal screening for the company's private equity vehicles. Energy Capital felt that some of the opportunities required flexible junior capital but fit a risk-adjusted return profile that was more appropriate for mezzanine funding than a typical equity investment.

"The enormous and accelerating capital needs of the energy industry are facing constrained capital availability from traditional sources caused by broad macroeconomic factors and the exit of European project finance banks and other lenders from the North American energy marketplace," Nazar Massouh, principal and head of the firm's mezzanine investment activities, said in the release.

"This phenomenon is particularly true for middle-market companies. Potential borrowers have shown a strong interest in our mezzanine funding solutions, and we look forward to deploying this capital in a diversified portfolio of energy investments that meet our return criteria."

The private equity firm is based in Short Hills, N.J. and has an additional office in San Diego.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.