U.S. energy-focused private equity firm, Tailwater Capital, announced Tuesday it has raised $1 billion for its biggest fund to date, betting on growing demand from the midstream sector, Kallanish Energy reports.
The firm closed its Energy Fund III with a hard-cap of $900 million and raised a $100 million co-investment for a platform company in the fund. Since its launching in 2013, the firm raised more than $2.7 billion across its funds and co-investments, but the latest fund was the largest.
“Tailwater will continue to focus on acquiring and growing midstream assets as well as participating in non-operated upstream opportunities in select basins, through the firm’s E&P Opportunity funds,” it said in a statement.
The deal shows how private equity firms are looking to invest in pipeline midstream assets amid ongoing bottlenecking and under capacity, straining crude oil areas such as the Permian Basin. Tailwater, which has six platform companies, didn’t specify where it would target investments.
Edward Herring, co-founder and managing partner of Tailwater, said Energy Fund III allow the energy buyout firm to continue building leading companies in the midstream sector. “As evidenced by our deployment so far, there are unparalleled opportunities to put capital to work addressing the significant demands for midstream infrastructure,” he said.
The portfolio of the Dallas-based firm includes Align Midstream, Copperbeck Energy Partners, Cureton Midstream, Valiant Midstream, amongst others. It also has two upstream platforms – Blackbrush Oil and Gas and Pivotal Petroleum Partners.
Joseph F. Barone