EnCap Investments Closes Fund XI at $7 Billion

Houston-based EnCap Investments has closed its 11th fund at $7 billion. Fund XI is focused on making investments in the upstream sector of the North American oil and gas industry. The fund was oversubscribed and hit its hard cap.

EnCap’s prior fund, EnCap Energy Capital Fund X, L.P., closed at $6.5 billion in April 2015.

“The opportunity set for investment remains compelling and dynamic, and we are pleased to have a new pool of capital from a diverse range of investors to begin taking advantage of opportunities in the marketplace,” said Doug Swanson, managing partner, in a statement on the close.

EnCap started fundraising for the vehicle last year, and held a first close in December 2016. At that time, the fund was already partially invested. For this fund, EnCap is continuing its focus on buying energy assets with a value tilt and working with management teams it already knows well when possible.

In July, EnCap Investments made a $500 million commitment to San Antonio-based Silverback Exploration II, an independent oil and gas exploration company. Silverback II was formed by the same team that successfully led its predecessor company, Silverback Exploration, which was also backed by EnCap. Silverback Exploration developed a significant position in the Delaware Basin, which it eventually sold to Centennial Resource Development Inc., for $855 million. Silverback Exploration II was created with similar development goals.

Known investors in EnCap Energy Capital Fund XI include Los Angeles City Employees Retirement System (LACERS), which committed $40 million; Texas County and District Retirement System, which committed $75 million; Public Employees Retirement Association of New Mexico; Hawaii Employees’ Retirement System; District of Columbia Retirement Board; Florida State Board of Administration; Merced County Employees Retirement Association; Oregon Investment Council; and Berkshire Taconic Community Foundation.