This little known private-equity firm booked a 79-fold return
Subscribe to enjoy similar stories. Patience paid off in a big way for Lime Rock Management. The private-equity firm recently sold the shares it received as part of the August sale of its majority stake in oil-and-gas producer CrownRock, notching what is perhaps one of the buyout industry’s biggest scores.
Energy-focused Lime Rock grossed 79 times the $96.5 million it had invested in Midland, Texas-based CrownRock since forming the oil patch operator some 17 years ago, according to fund investors and people familiar with the matter. The return includes dividends representing roughly 15 times Lime Rock’s outlay that were paid from CrownRock’s cash flow over the life of its investment, the people said. “It’s the highest return I’ve ever seen, certainly in the natural-resources space but also in private equity—a 79-times gross return, cash on cash, during the entire holding period," private markets investor Greg Jansen said.
He spent more than two decades with asset manager Commonfund Capital, now called CF Private Equity, ultimately leading investments across strategies such as natural resources, private equity and venture capital before retiring in 2016. Lime Rock held its CrownRock investment far longer than the typical five- to eight-year period common among private-equity firms. As a result, the company’s development correlates with the evolution of the shale industry itself, benefiting from improvements in oil-extraction technologies early on and energy buyers’ increased focus on cash flow-generating oil fields at a later stage.
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