Private Equities

[winston]

Something major is happening between private equity firms and oil companies

Just in the past 18 months…

• Private Equity firm, Blackstone Group, scooped up oil and gas assets, including vast acreage in the Permian basin, to the tune of $1.8 billion.

• Chrysoar, an oil company backed by private equity firm EIG, acquired oil and gas assets in the North Sea from Royal Dutch Shell at a cost of $3 billion.

• Warburg Pincus, the New York firm where former Treasury secretary Tim Geithner works, has its eyes set on the northern Delaware Basin, where it has deployed $500 million for oil assets.

• And Private Equity firm, Neptune Oil & Gas, bought a majority stake in a French exploration and production business for $3.9 billion.

It's clear that private equity firms, aka the "smart money", is buying up oil assets as fast as they can…

Source: Stansberry Research

[winston]

Something major is happening between private equity firms and oil companies

Just in the past 18 months…

• Private Equity firm, Blackstone Group, scooped up oil and gas assets, including vast acreage in the Permian basin, to the tune of $1.8 billion.

• Chrysoar, an oil company backed by private equity firm EIG, acquired oil and gas assets in the North Sea from Royal Dutch Shell at a cost of $3 billion.

• Warburg Pincus, the New York firm where former Treasury secretary Tim Geithner works, has its eyes set on the northern Delaware Basin, where it has deployed $500 million for oil assets.

• And Private Equity firm, Neptune Oil & Gas, bought a majority stake in a French exploration and production business for $3.9 billion.

It's clear that private equity firms, aka the "smart money", is buying up oil assets as fast as they can…

Source: Stansberry Research

[investar]

Private Equity: in the U.S. there are currently 7,141 investors with $900 billion ready to be invested in the market (dry powder)

https://insight.factset.com/a-decade-of ... ate-equity

Conclusion
Private equity continues to be one of the key themes and investment options for investors. The U.S. private equity market continues to expand and grow rapidly with close to 100,000 active investments, $900 billion in dry powder, and challenging public market volatility. Even though the number of funds opening has slowed down since the peak in 2015, the aggregated money invested in private equity remains high.

With the public markets currently experiencing unprecedented uncertainty and volatility due to COVID-19, public companies will face funding challenges. On the other hand, with so much dry powder available on the sidelines, private equity investors will be able to continue to invest into new portfolio companies as well as fuel and fund their existing portfolio of companies much more easily.

[winston]

Private Equity

This should be a boom time for private equity shops like KKR (NYSE:KKR) and Apollo Global Management (NYSE:APO).

Interest rates are at historic lows, which makes borrowing cheaper. A host of tech firms are going to turn cash flow-positive over the next ten years, with the more mature companies perfect targets for the sector.

Apollo admittedly is dealing with the fallout of its founder’s association with Jeffrey Epstein, but the firm is simply too big to be overwhelmed by a single scandal.

But there are reasons to believe that private equity may well struggle over the next ten years. Increasingly, it looks like PE returns don’t exceed those of a levered basket of small- to mid-cap stocks. The role of the sector in key industries like healthcare and energy has drawn increasing regulatory scrutiny.

More broadly, there seems to be a shift away from profit-maximizing capitalism toward more socially aware efforts such as ESG (environmental, social, and governance) investing.

As a result, major institutional clients like universities and pensions may look more closely at their PE investments. And they may not like what they see.

Source: Investor Place

[winston]

World's wealthy turn to private equity

The world's wealthiest families put more money into private equity than in traditional asset classes like fixed income and stocks in 2021, as they sought to boost investment returns, a report by Swiss bank UBS shows.

Private equity posted stellar returns last year as trillions of dollars in pandemic-related stimulus prompted a record surge in deal-making, with overall deal value in 2021 doubling from previous years, according to industry estimates.

In contrast, fixed income faced a torrid year as near zero interest rates sapped its attractiveness as a safe haven during market turmoil, while sky-high valuations in volatile equity markets deterred investors.

Investments into private equity by the world's wealthiest families increased consistently between 2019 and 2021, according to a survey for the UBS report of 221 family offices overseeing US$493 billion (HK$3.9 trillion) in assets.

Source: Reuters

https://www.thestandard.com.hk/section- ... ate-equity

[behappyalways]

Beginning Of Liquidation Wave? Tiger Global Prepares To Dump A Segment Of Its Startup Portfolio
https://www.zerohedge.com/markets/liqui ... -portfolio

[winston]

Private equity dry powder hits record US$2.49 trillion as dealmaking slows: S&P

by Sharanya Pillai and Daphne Yow

In the year to Jul 3, global PE dry powder – which refers to capital from investors that has not yet been deployed – was up 11.1 per cent.

The slowdown in deal-making was due to the uncertain global economic outlook, a greater level of regulatory scrutiny and rising transaction costs linked to high interest rates.

Source: Business Times

https://www.businesstimes.com.sg/startu ... g-slows-sp

[winston]

PE Firms Get Trapped in China After $1.5 Trillion Betting Spree

by Cathy Chan and Preeti Singh

Mounting concerns about the risks of investing in mainland China have left so-called secondary buyers demanding discounts of 30% to more than 60%. Haircuts in Europe and the US are closer to 15%.

Many firms are also looking at an alternative strategy, putting off sales by setting up so-called continuation funds to take over holdings for several more years.

The lack of easy exits — affecting the likes of Blackstone-backed PAG and Carlyle Group Inc. — has shifted the world’s second-largest economy from a vast frontier for buyouts into an uncertain landscape for long-term investing.

Demand for Chinese assets cratered in the past few years, with record outflows even from public markets, as the economy struggles to regain traction and concerns mount over the political direction under Xi Jinping.

“China is completely out of favor and global investors are going to put China on hold for now.”

Source: Bloomberg

https://finance.yahoo.com/news/pe-firms ... 00109.html

[winston]

Worldwide, PE firms are sitting on a record 28,000 unsold companies. That's worth more than $3 trillion combined.

They simply can't find buyers for their assets, which means it's going to take longer for investors to get their money back.

Source: Daily Wealth

[behappyalways]

Time To Pay Satan: Canadian Asset Manager Blocks Cash Distributions On Private Credit Funds
https://www.zerohedge.com/markets/time- ... edit-funds