Deals

Denham seeks extra runway for 2005-vintage energy fund

The energy investor has set up a continuation vehicle for the process on its $1.24bn Fund IV.

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Denham Capital Management, a private equity firm focused on the energy and power sectors, is carrying out a secondaries process on one of its mature flagship funds.

The Boston-headquartered firm, which has $6.28 billion in assets under management, is running a GP-led process on its 2005-vintage Denham Commodity Partners Fund IV, according to two sources familiar with the deal.

A vehicle named Denham Continuation Fund was registered with the Securities and Exchange Commission on 21 November. It has yet to raise any funds, according to the SEC filing.

The likely size of the deal and remaining net asset value of the fund are not clear.

Fund IV closed in 2006 on $1.24 billion, above its $1 billion target, after around four months in market, according to PEI data.

Investors in the fund include Massachusetts Pension Reserves Investment Management Board, Pennsylvania Public School Employees’ Retirement System, Tennessee Consolidated Retirement System and Carnegie Corporation of New York, PEI data show.

Denham makes investments in power generation, oil and gas, and mining businesses at all stages of the corporate lifecycle.

PE Hub first reported that Denham was running a GP-led process on Fund IV.

Pantheon and HarbourVest Partners are among the firms with experience in energy secondaries. Pantheon declined to comment on whether it was looking at the deal, while HarbourVest did not before press time.

In June HarbourVest emerged as lead backer of a GP-led process on the 2006-vintage, $1.9 billion energy fund Lime Rock Partners IV. The Boston-headquartered firm planned to launch its secondaries-focused Real Assets Fund IV in the second half of this year, according to a presentation prepared for Imperial County Employees’ Retirement System, seen by Secondaries Investor.

Pantheon makes energy investments through its flagship secondaries funds. Evan Corley, a partner with the firm’s global infrastructure and real assets team, told Secondaries Investor in June that he had seen a meaningful increase in the number of GP-led opportunities in the energy sector over the last three years, as recovering oil prices help buyer and seller price expectations to converge.

Denham declined to comment on the process.