Encap Sets $2B Goal for 2nd Energy Transition Fund

EnCap Investments, an oil and gas industry veteran that began experimenting with renewables before the pandemic, raised $993 million, nearly half of its $2 billion target, for its second energy transition fund, according to a commitment report by the Arkansas Teacher Retirement System.

EnCap could set a hard cap of $2.5 billion for the fund, with a final close expected in the fourth quarter. The fund will make up to 12 investments of $50 million to $400 million, according to the pension fund’s documents.

As LP demand and return characteristics for energy transition initiatives expanded, the business, which has mostly invested in oil and gas projects since its inception in 1988, formed a dedicated renewables team in 2019 comprised of Jim Hughes, Tim Rebhorn, Shawn Cumberland, and Kellie Melcalf.

Houston-based EnCap raised $1.2 billion two years ago to close its first energy transition fund, which targeted wind, solar, and energy storage companies.

The firm is also looking to raise $4 billion for its Energy Capital Fund XII, which will focus on upstream investments, mineral rights, and royalties from oil and gas projects.

EnCap Investments has been a significant provider of venture financing to the independent sector of the US energy industry since 1988. The firm has raised 24 institutional funds totaling more than $40 billion.