Tailwater Capital closes its third energy fund for $1 billion

Dallas-based private equity fund Tailwater Capital announced today that the firm closed its third energy-based fund, the Tailwater Energy Fund III LP, at its hard-cap of $900 million. An additional $100 million was raised as a co-investment for a platform company in the fund, bringing total commitment to $1.0 billion.

With the close of its Energy Fund III, Tailwater has now raised more than $2.7 billion across its funds and co-investments.

Tailwater is led by founding partners Jason Downie and Edward Herring, who have worked together for nearly two decades and executed more than 100 transactions in the energy sector representing over $18.8 billion of transaction value. 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, according to its press release.

To date, Tailwater has committed a substantial amount of Energy Fund III across six platform companies and has a pipeline of new teams and add-on opportunities.

The firm specializes in middle-market energy opportunities. Tailwater focuses on aligning with experienced management teams from the outset to create value for both its portfolio and its limited partners.

Tailwater’s portfolio contains a number of companies including Goodnight Midstream and PetroWaste Environmental which handle water disposal and non-hazardous waste disposal associated with E&P operations, respectively, as well as companies such as Silvercreek Midstream which offer crude oil gathering, storage, and terminalling services.

Edward Herring, Co-Founder and Managing Partner of Tailwater, added, “I am extremely proud of the team we’ve built and believe that our deep transaction experience is a great complement to our portfolio companies’ operating expertise. Energy Fund III allows us to continue to enhance our record of creatively navigating complex transactions and 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.”

Fund III will have the same investment strategy as its $650 million predecessor which targeted mid-market companies with a deal size between $25 million and $350 million.

Tailwater Capital will also be presenting in Denver August 20, 2018 ,as part of a midstream panel at EnerCom’s The Oil & Gas Conference. A live webcast of the event will be available here.

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