Energy Investors Funds Closes Fifth Fund At $250 Million

Energy Investors Funds (“EIF” or “the Group”), an established private equity fund manager specializing in the energy and electric power sector, is pleased to announce the final closing of the United States Power Fund, L.P. (the “US Power Fund”, “USPF”, “Fund”) with total capital commitments of $250 million. The Fund, which principally targets investments in generation, transmission, and energy service assets in the U.S., has already committed over $168 million (as of 4/30/04).

The US Power Fund attracted commitments from new and repeat investors, including endowments and foundations, public and private pension plans, fund-of-funds, family offices, banks, insurance companies, and utilities. John E. Buehler, Jr., Managing Partner, says, “This was our most successful fundraise to date, with a high level of interest from the institutional investment community.”

Energy Investors Funds was founded in 1987 as the first investment manager to raise, close, invest, recapitalize, and liquidate the assets of a power fund, and is the only private equity power fund manager with an established track record of long-term success. The Group has mobilized over $1 billion in capital, and currently manages five private equity funds from its offices in Boston, New York, and San Francisco. These funds have made over 65 diversified investments, with a combined underlying asset value exceeding $5 billion.
The overall investment strategy for the USPF emphasizes and builds upon the Group’s core expertise and experience in a market that continues to develop from a regulated to a deregulated environment. “One of the principal advantages of being a fund manager that has focused on, and specialized only in, energy/power sector investing for 16 years is that our investment strategy has evolved to meet the needs of the changing energy marketplace; it has been informed and enhanced by the performance of assets in our prior portfolios during both the holding and liquidation phases,” says Herb Magid, Managing Partner.

The US Power Fund seeks to maximize returns to, and achieve liquidity for, its investors through regular cash distributions and the proceeds from the sale of assets. The USPF targets investments in generation and transmission assets that have long-term offtake contracts. Given this strategy, we project an average annual cash-on-cash distribution to our LP’s of 10%-15%, with an overall net IRR of 20-25% based on asset liquidations. “Power asset investments provide an attractive diversification and risk/return opportunity to institutional investor portfolios in volatile markets without sacrificing higher returns,” says Mr. Buehler.

EIF has demonstrated its exit strategy in liquidating many of its U.S. investments from prior funds. The purchasers of these investment interests have included financial institutions, private equity funds, utilities, strategic industry players, and independent power companies. “The USPF’s exit strategy is based on the premise that, given the cyclical nature of the industry, those utilities and private power companies that are currently selling assets will be buyers of those same assets in the future – most likely, during the projected liquidation period for the Fund,” says Terry Darby, Managing Partner.



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