Carlyle Recommits to Volatile Energy Sector with 2nd Credit Fund
The fund is currently invested in oil exploration operator Hilcorp
The Carlyle Group LP (Nasdaq: CG) has raised a $2.8 billion credit fund, called Carlyle Energy Mezzanine Opportunities Fund II, underlining the investment firm’s commitment to energy M&A as the sector looks to recover from volatile commodity prices.
Raising more than twice the size of the firm’s $1.4 billion inaugural energy fund in 2012, CEMOF II will invest between $50 million to $500 million in energy projects and companies. The CEMOF launched in 2010 to target energy and power sectors, including: power generation, renewable energy, oil and gas production, oilfield services, and midstream infrastructure.
Carlyle managing director Rahul Culas says the CEMOF has made 15 investments across multiple energy subsectors to date. The fund’s current investments include Hilcorp Energy Co., an oil and gas exploration operator based in Houston, Texas. Hilcorp received a $1.24 billion investment with capital from both CEMOF I and CEMOF II. Simpson Thacher & Bartlett LLP acted as legal counsel to CEMOF II and its investors.
The Carlyle Group is a global asset management firm headquartered in Washington, DC. The firm recently purchased Atotech, the specialty chemicals unit of French oil company Total SA, for $3.2 billion despite volatile oil prices. On the contrary, dealmakers are optimistic that energy M&A will rebound, according to Mergers & Acquisitions’ Mid-Market Pulse (MMP), a forward-looking sentiment indicator, published in partnership with CT.
Private equity firms have been busy when it comes to fundraising recently. In April 2016, Carlyle closed a new collateralized loan obligation (CLO) fund valued at $403 million. Carlyle’s CEMOF and CLO business are both apart of the firm’s global market strategies division. Other fundraising efforts include: Kainos Capital’s closing of a second fund to target consumer goods and food and beverage deals; Arsenal Capital Partners’ closing of a $1.3 billion private equity fund; Chicago-based NXT Capital LLC’s closing its fourth debt fund at $900 million; and Monroe Capital LLC’s closing of its second credit fund at $800 million.
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