Kimmeridge Energy Management Co., an energy alternative asset manager, closed a $1 billion fund for the acquisition and development of unconventional assets in North America.
The company said its new fund is 25% larger than the last fund it raised in 2019. Funds of this size have become extremely rare in the last five years, and private equity firms have recently told Hart Energy it takes more effort and work hours to raise energy funds than in recent years. Experts believe private equity firms will not raise all the capital energy companies need.
Kimmeridge said its new Fund VI is supported by institutional investors including endowments, foundations, public pensions, family offices and sovereign wealth funds.
“We welcome both our returning and new limited partners, and thank them for their continued support,” Ben Dell, Kimmeridge founder and managing partner, said. “With a focus on assets at the front end of the cost curve, direct operatorship and a flexible investment approach, Kimmeridge strives to consistently deliver strong results across commodity cycles and generate outsized performance for our investors.”
The release said the fund will invest in “top-producing basins in North America.” Fund VI will be employed with Kimmeridge’s track record of deploying 70% of its capital within the first two years of the funds close with the intent of quick capital return, Kimmeridge said in a release. More details were not made available.
“While we are gratified to have played an important role in spurring a new E&P business model focused on profitability, shareholder alignment and environmentally conscious production, many [oil and gas] assets continue to trade at depressed valuations and lack relevance among skeptical investors,” Dell said in the release. “This dynamic presents Kimmeridge with compelling investment opportunities to consolidate smaller, disaggregated assets at attractive entry points. We have developed expertise in this strategy, including the successful formation of Civitas, Colorado's first carbon neutral energy producer.”
Kimmeridge was founded in 2012 and has more than $5 billion of limited partner commitments across 10 funds. It has offices in New York City and Denver, Colorado.
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