LS Power closes $6bn private equity fund, earmarks $1.7bn for Constellation

LS Power closed a $6 billion private equity fund earlier this month, 50% above the $4 billion target it started with and more than twice the size of its previous fund, Utility Dive reported Oct. 20.

About $1.7 billion of the total is dedicated to the company's planned purchase of about 5 GW from Constellation Energy.

"The demand growth we're experiencing today is real," chief operating officer Darpan Kapadia said. "The supply side is going to take time to catch up, and the markets are screaming that."

LS Power has traded through this cycle before. Founded in 1990, it built roughly 5 GW of gas-fired power plants and sold them to Cogentrix and NRG Energy by 2001, Kapadia said. After a series of power plant bankruptcies in the early 2000s, it launched its private equity arm and rebuilt the portfolio by buying distressed assets. The privately held company has raised more than $19 billion in private equity since, he said.

Kapadia sorts the opportunity set into three groups: conventional generation, renewables and distributed resources. Conventional generation means gas-fired combined cycle and peaking projects. Renewables covers solar, wind, run-of-river hydro, pumped storage hydro, battery storage and renewable fuels. Distributed resources includes energy efficiency, demand response and microgrids.

LS Power runs a private equity business, a generation development business and a transmission development business, which Kapadia casts as the ability to "buy or build any power infrastructure-related project across the United States."

On Oct. 9, PJM approved 2.1 GW across Engie storage projects and an LS Power gas uprate, according to Utility Dive, with the projects expected online by mid-2029. The expedited track that cleared them lapses at the end of 2027.