A proposed recapitalization of the $7.8 billion First Reserve Fund XI private equity fund by Pantheon Ventures and Intermediate Capital Group has been terminated due to the low level of existing limited partners wishing to sell, said Helen Gustard, ICG spokeswoman, in an e-mail.
“ICG and Pantheon have decided together with the (First Reserve) team not to move forward with the fund restructuring transaction,” Ms. Gustard wrote.
In June, the $303.3 billion California Public Employees' Retirement System, Sacramento, objected to the proposed restructuring of the underperforming 2006 energy fund, citing “inherent conflicts of interest.”
Among other things, Real Desrochers, managing investment director-private equity at CalPERS, said the recapitalization would reset carried interest terms in First Reserve's favor for a fund in which “the original investors are not expected to receive a return on their investment.”
In response to existing investors' objections, First Reserve made some changes, including shortening the lifespan of the new fund that would result from the recapitalization and eliminated fees for existing investors.
CalPERS officials declined comment, said Joe DeAnda, in an e-mail. Dannea DeLisser, Pantheon spokeswoman, and Julie Oakes, First Reserve spokeswoman, also declined to comment.