LBO Wire – Ridgewood Energy Hits $1.1B for Second Fund

By Michael Wursthorn | Houston,  LBO Wire

Ridgewood Energy, a firm led by a former BP PLC executive, surpassed expectations for its second fund, closing it at $1.1 billion, said a person close to the effort.

The fund, Ridgewood Energy Oil & Gas Fund II LP, beat a $750 million target and an initial hard cap of $1 billion, said the person. The final close came in December after a $450 million first close in April, the person said.

Ridgewood declined to comment on the fund at this time.

Ridgewood plans to use the fund to invest in drilling and developing oil projects in the Gulf of Mexico. It already has 16 properties producing oil, and another five under development throughout the Gulf region, according to the firm’s website.

The firm isn’t just popular with limited partners, which helped push the fund well above target. Large energy investor Riverstone Holdings has a partnership with Ridgewood to help fund a series of deepwater exploration projects. The latest agreement was made in March and was an extension of a 2010 commitment. Altogether, Riverstone has pledged more than $550 million to joint ventures with Ridgewood.

An investor that agreed to back Ridgewood last year pointed to the Riverstone partnership as one reason it felt secure with its investment in Fund II.

For Ridgewood, the new fund greatly increases the firm’s assets under management. Prior to Fund II, Ridgewood was managing a $70.4 million fund, Ridgewood Energy Gulf of Mexico Oil and Gas Fund LP, which was raised during the financial crisis and closed below a $750 million target.

That first fund was performing well, one of the people said. That, coupled with limited partners eager for energy exposure, helped Ridgewood on the fundraising trail.

Ridgewood’s investment team is led by President Kenny Lang, who previously worked at BP for 24 years and was a senior vice president of the company’s Gulf of Mexico business before joining the firm in 2009.

Ridgewood, with offices in Houston and Montvale, N.J., is one of a number of energy investors to close on more than $1 billion for new funds recently, joining Energy & Minerals Group, Kayne Anderson Capital Advisors, White Deer Energy and Yorktown Partners. Ridgewood itself agreed to commit about 2% of the fund’s committed capital, said the person.

Eaton Partners helped place Ridgewood’s latest fund.

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